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 Report 
 
 of First Convention 
 
 Winnipeg, January 13-14-15 
 
 1920 
 
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 RURAL CREDITS SOCIETIES 
 
 Legislative Buildings, Winnipeg 
 
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ALBERT R. MANN 
 LIBRARY 
 
 New York State Colleges 
 
 OF 
 
 Agriculture and Home Economics 
 
 Cornell University 
 
Cornell University Library 
 HG2051.C2R94 
 
 Report of first convention, Winnipeg, Ja 
 
 3 1924 014 533 297 
 
Cornell University 
 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924014533297 
 
Rural Credits 
 Societies 
 
 °''"VCE0FM^'»^■^° 
 
 Report 
 
 of First Convention 
 
 Winnipeg, January 13-14-15 
 
 1920 
 
 RURAL CREDITS SOCIETIES 
 
 Legislative Buildings, Winnipeg 
 
Chairman's Opening Address 
 
 The Vakie of Rural Credits Societies to Immigration 
 
 H. F. M. Ross 
 Financial Editor Manitoba Free Press 
 
 The convention was opened by George W. Prout, 
 M.L.A., Kildonan and St. Andrews. Mr. Prout 
 said: "Tlie Rural Credits Movement in Manitoba, 
 as it is to-day, is due to the efforts, genius, initiative 
 and public spirit of a large number of men in this 
 province. In its early inception this movement 
 needed friends. All new ideas need friends. And 
 among the friends of the Rural Credits movement 
 in this province, there was no better friend than 
 the gentleman I am going to introduce to you and 
 ask to take the chair this afternoon. It is Mr. 
 Hope Ross, the financial editor of the Manitoba 
 Free Press. When I first presented to him a draft 
 of the Manitoba Rural Credits Act, he immediately 
 caught on, and from that day to this, his influence, 
 and the influence of that great metropolitan news- 
 paper, the Manitoba Free Press, has been exerted 
 entirely on the side of this great movement. With- 
 out any further words, I have the pleasure of asking 
 Mr. Ross to take the chair." 
 
 H. F. M. Ross: "My friend, Mr. Prout, member 
 of the Legislature for Kildonan and St. Andrews, 
 has told you accurately how I became somewhat 
 identified with this very important movement. It 
 is a little more than three years ago since Mr. Prout 
 called at my office and set forth the proposed Act, 
 an Act which he hoped to introduce into the Legis- 
 lature. I would like very much to tell you, though 
 I don't intend to take up so much of your time, 
 why it was that at that juncture the Act appealed 
 to me with so much force as it did. I told Mr. 
 Prout then, and I have often told him since, that 
 there was nothing he could ask me to do on the 
 side of this movement, which I think of ve.'y 
 great importance, which I would not be ready and 
 willing to do. 
 
 "In introducing the speakers, there is one thing 
 I would like to say: I read yesterday in the Free 
 Press an interview with a very dear friend of mine, 
 Mr. Bruce Walker, who for a great many years has 
 been in charge of immigration in the service of 
 the Federal Government. In this interview Mr. 
 Walker, in his optimistic way, spoke of United 
 States people, who in the month of December had 
 come across the border into Canada, and referred 
 to the immigration for the year into Canada. I 
 wish to submit some immigration figures, a very 
 few, and in round numbers, not absolutely accurate, 
 which are of an interesting charcter. In the begin- 
 ning of 1900 we had in this province a population 
 of a quarter of a million people. In the first sixteen 
 years of this century, there were brought into this 
 province about half a million people, actually 
 somewhat less. These were not visitors. They 
 were people who came into the province with the 
 idea of settling on the land and making their per- 
 manent residence in Manitoba. If in the first 
 
 sixteen years of this century about half a million 
 came here, the population should have been about 
 750,000 in the year 1916. However, in the year 
 1916 the quinquennial census was taken, and this 
 quinquenniel census showed that there were just 
 550,000 people in the province. That is to say, 
 there were 200,000 people less than there should 
 have been, taking into account the population in 
 1900 and the immigrants who had come during 
 the following sixteen years. The explanation which 
 has sometimes been given of this discrepancy is 
 that the immigration figures are unreliable and 
 incorrect. Now, I knew a little about immigration 
 into this province in the sixteen years in question. 
 I had been through all that period on the editorial 
 staff of the Free Press, and one of the things I had 
 to do every day for the Free Press was to write 
 immigration news. My opinion now is, that the 
 immigration figures given by the immigration 
 authorities, are in all probability as reliable as 
 the census figures, and it is probably true that about 
 500,000 people came into this province during these 
 sixteen years, with the intention of settling in it. 
 
 "Where did the 200,000 missing people go to? 
 It is quite unnecessary for me to say anything 
 about that question, because a very prominent 
 gentleman expressed an opinion regarding it not 
 very long ago. I refer to Sir George Bury. He 
 was interested because he brought these people 
 into this country; he was the manager of the rail- 
 way that brought the majority of them in, and he 
 was dependent upon them to produce the freight, 
 which would pay the dividends on the stock of the 
 company of which he was vice-president. The 
 statement he made was that this country was 
 failing in connection with immigration, that we 
 heard a great deal about bringing immigrants into 
 this country, but too little about efforts to keep 
 them in the country once they had been brought 
 into it. 
 
 "If any one can suggest any means through which 
 the Government can more cheaply and efficiently 
 deal with this situation than through the Rural 
 Credits movement, then I don't know what that 
 means is. I am deeply interested in the Rural 
 Credits movement. I see in it the hope that the 
 Rural Credits Societies will be able to give the 
 assistance needed by a good many people who come 
 to this country, with the minimum of loss and the 
 maximum of gain to the country's resources and 
 the country generally. 
 
 "There are a great many phases of this question, 
 which, owing to the fact that I have written about 
 it and thought about it for the last few years, I 
 should like to refer to. However, I think that a 
 very few words from me are sufficient. I would 
 like to strike the key-note of these meetings, to 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 indicate what it is that Mr. Prout and we all desire 
 to do here. I had the pleasure of attending and 
 speaking briefly at a somewhat similar meeting to 
 this last year in the Legislative building. It was 
 a smaller meeting, but one exactly on the same 
 hnes. There were a number of excellent addresses. 
 There was one address that appealed very much to 
 me. It was an address given by Mr. Weir. He 
 spoke for a couple of hours, and took up one by one 
 a number of points which the directors and secre- 
 taries had to deal with in the ordinary routine of 
 their business, and discussed them with great 
 fullness. He conducted a school of instruction, and 
 
 did it very well. I think that what we want to do 
 at these meetings is to conduct a school. Person- 
 ally I know only a Uttle about banking, and a great 
 deal less about farming, but there are speakers on 
 the progiam who are experts on banking and farm- 
 ing, and to-morrow and the next day we wish to 
 carry out this idea of conducting a school of instruc- 
 tion, which may give some guidance to directors and 
 secretaries in the mangement of these Rural Credits 
 Societies in the future. I have now pleasure in 
 introducing to you, to deliver the address of wel- 
 come, the Hon. Edward Brown, the Provincial 
 Treasurer." 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 The Government and Rural Credits 
 
 Address of Welcome — Purpose of Convention — Justice of Fixed Interest Rate 
 
 — Government Support Movement 
 
 Hon. Edward Brown 
 Provincial Treasurer for Manitoba 
 
 "I would like to compliment the chairman upon 
 the very fine point he has made with reference to 
 the application of this Act in this province. It is 
 a point -which we are ail apt to overlook, and that 
 is that ic is quite possible for the Government, 
 for the peopie — for, after ail, the Government is 
 only the agent of the peopie — to pass legislation 
 that will make the province so attractive to the 
 man outside that he wiil say: 'I would like to live 
 in that province.' That is a point that we Very 
 often overlook, and really, to be candid, it is a 
 pbiht that I had overlooked with respect to this 
 Act, that is, its influence on the outside world in 
 attracting men, who otherwise might not think of 
 coming. 
 
 "The task imposed on me is a very simple and 
 congenial one, to extend io you, en Ijehalf of the 
 Government of the province, for whom I am 
 speaking on this occasion, a very hearty welcome 
 indeed to the delegates respresenting the Rural 
 Credits Societies in this province, and also the 
 distinguished gentlemen who have come here at 
 your request, as guests of the Government, and at 
 great inconvenience to themselves, in order that 
 they might give us ihe advantage of their exper- 
 ience. , We are very grateful to them. Now, it is 
 a matfef of gratification to me that the committee 
 of management have been able to secure such com- 
 fnodieius fooms for the meetings in this fine hotel. 
 I hope you will enjoy the meetings. You will 
 ■fiotice that this evening we have a gathering of a 
 s^dal nature at the new Parliament buildings, to 
 which you are all invited as the guests of the 
 Government, in order that you might not only see 
 these buildings, but that you might have some 
 social intercourse with the friends in this city of 
 the Rural Credits Societies. We have in the 
 course of the last few years made periodical excur- 
 sions into the country. We have taken different 
 prominent business men who are not only inter- 
 ested in the development of the province, but who 
 wish to sympathize with every important movement 
 for the development of the province. These excur- 
 sions have been greatly enjoyed. These men have 
 greatly enjoyed meeting with the farmers, and 
 they want the opportunity to-night of meeting you 
 again in order that they may make some contri- 
 bution to your happiness. You are our guests in 
 the city. Later on, to-morrow evening, there will 
 be a banquet. Mayor C. F. Gray has been unable 
 to attend, but he has asked me to say that he would 
 like to confer the freedom of the city upon you while 
 you are in the city. Of course, as you know, this is 
 a 'dry' city, but I hope that will not be too great a 
 handicap as far as your enjoyment is concerned. 
 If you drop into some of the theatres and make 
 some contribution to the general entertainment, I 
 will have no objection as the Provincial Treasurer. 
 
 You are the guests of the Government, and the 
 Mayor has conferred upon you the freedom of 
 the city. 
 
 PURPOSE OF CONVENTION 
 
 "I wish to deal first with the convention itself. 
 It has been called by the authority of the Govern- 
 ment. As a matter of fact, we shall ask the Legis- 
 lature at this session to pass an appropriation to 
 defray the expenses of this convention. That 
 means, it must be in the public interest, otherwise 
 we would not be warranted in spending the money. 
 Why is it that the Government of the province has 
 seen fit to authorize the calling of this convention 
 and to defray the expenses? What was in the 
 minds of the Government? If we had no other 
 purpose than simply to gather together in one hall 
 the men charged with the responsibility of carrying 
 on these societies, and who have done their work 
 so well, simply to assure them that we appreciate 
 their work, I say that if we had no other purpose 
 in mind than that, it would have been worth while. 
 But we had other purposes in mind. You know 
 that though this movement is only two years old, 
 we have some 38 societies. What we aim at, 
 however, is to have a society in every organized 
 municipality. I think there are 110 organized 
 municipaUties in the province, so that there is a 
 great work still to be done before every farmer in 
 this province gets the benefit he is entitled to get 
 under this Act; so that one of the big thoughts in 
 the minds of the Government was pubhcity. We 
 desire pubhcity for this movement. 
 
 "I want to say here that we are extremely grate- 
 ful to the daily papers of this city. Mr. Prout has 
 made specific reference to the services of the Free 
 Press. Of course, the Free Press, as you are 
 aware, has done much, but the other papers have 
 rendered great service, too. To the other daily 
 papers I wish to express my appreciation of the 
 fact that they have seen fit to devote so much space 
 and pubhcity to this movement, without remuner- 
 ation. I wish to refer also to the farm journals, 
 which have uniformly devoted space towards 
 advertising this movement. We felt that if we 
 could get this convention together, and that if it 
 was a great success, it would be a great impetus to 
 this movement, and would help in the onward 
 march of the Rural Credits Societies, so that the 
 time would soon come when every municipality in 
 the province would have a Rural Credits Society, 
 and when thousands of farmers, who are not to-day 
 enjoying the benefits of the Act, would oe able to 
 take advantage of it. 
 
 "A further thought in our minds was this: We 
 wanted, for your benefit and for our own benefit, to 
 make this convention a great educational factor. 
 One has only got to look at the program to realize 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 what that means. You have ideas to impart arising 
 out of your practical experience in deaUng with 
 this Act. Distinguished men have come here from 
 long distances to give us the benefit of their training 
 and experience. That will be a very valuable 
 contribution. There are a great many phases of 
 this work. We want to get the benefit of all of 
 them, and I am satisfied that from an educational 
 standpoint the action of the Government in calling 
 this convention will be fully warranted. 
 
 SMALL BANKS NOT SOUND POLICY 
 
 "Now, with respect to the Act itself. Why was 
 there a Rural Credits Act passed in the province? 
 Why did we go out of our way, as the first province 
 in Canada, to pass a measure of this kind? Well, 
 like all sound legislation, this Act was inspired by 
 a need that existed. That statement might be 
 called into question by men who have an interest 
 in taking the opposite side. But I say this, that 
 if we wanted evidence of this fact, we have it in the 
 growth, the rapid growth, and popularity of 
 this movement in the province to day. If it was 
 not needed it would not have been taken advantage 
 of. Why, you may ask, with the fine banking 
 system we have in Canada, was it necessary to 
 organize Rural Credits Societies for the purpose of 
 lending money to farmers? I won't take a back 
 seat to any man in Canada in my admiration for 
 the banking system in Canada. It is probably the 
 finest in the world. But the underlying principle 
 of the Bank Act, when it was framed and enacted, 
 and when Canada was a very small country com- 
 pared with what it is to-day, was not only to serve 
 the commercial interests of Canada, but also to 
 meet all circumstances and to preserve liquid all 
 the great resources of this country — I mean our 
 cash resources. Under no circumstances were the 
 banks to lend money where it would be tied up. 
 That money must be preserved in liquid form. 
 That was fine so far as our commercial interests 
 were concerned. If a merchant wanted a loan for 
 three months and he wanted to pay it back in three 
 months, that concerned the purposes of the Act. 
 But where does the farmer come in? Three months 
 is no use to the farmer. More than that, when a 
 business man gets a line of credit from the bank, 
 he has collateral to furnish to the bank, and the 
 loan is made on the basis of that collateral. The 
 farmer is in a different position, however, and is 
 thereby prohibited from taking full advantage of 
 the banking system in this country. While I 
 admire the underlying principle of the Bank Act, 
 and while it has worked out in a very successful 
 way so far as the commercial life of Canada is 
 concerned, it never was conceived for the purpose 
 of serving farmers or agricultural districts. That 
 is the reason why we say that the Bank Act 
 must be supplemented by some other forms. 
 
 "Now, I know there has been a movement in 
 two other Western provinces in favor of establish- 
 ing unit banks. I have no use for that suggestion 
 at all. It only increases the expense of manage- 
 ment. It does not cheapen money. It makes 
 money dearer, because it sets up in one unit a bank 
 that has no connection with the other banks. It 
 has the same expense as any other bank, Lut it 
 cannot circulate the currency of the other banks, 
 their paper, and cannot make money itself through 
 circulation, and the rates it would have to charge 
 the farmers would be higher than the rates which 
 
 the banks are now in the habit of charging. So I 
 have no sympathy whatever with the suggestion 
 of unit banks. We have an organization which 
 can link up with the banks, and when we have 
 that we can get the use of the cash re-sources of the 
 country, of the Dominion, for the benefit of the 
 farmers. And this Act was designed to co-operate 
 with and to secure the co-operation of the banks. 
 I am glad to say that we have had that co-operation. 
 I want to make that clear to-day. In-so-far as the 
 banks are concerned, the broadest view of the Act 
 obtains. The banks have come to recognize that 
 while the rate is lower than they would charge in 
 the ordinary way, the risk has been largely ehm- 
 inated, and that to lend to a group of farmers 
 quite a substantial sum of money, where the risk 
 is eliminated, is more desirable than to lend to 
 individual farmers at a higher rate, where there is 
 a modicum of risk. Our relations with the banks 
 have been of a satisfactory character so far. 
 
 BENEFITS OF THE ACT 
 
 "The benefits arising out of this Act are two-fold. 
 There is the direct benefit and the indirect benefit. 
 There is the direct benefit to the farmer who is 
 now a member of any Rural Credits Society, and 
 that is perhaps the greatest measure of benefit, 
 because this Act — and I want to say that this is 
 what I regard as the backbone of the Act — sets up 
 a rate in what has been spoken of as an arbitrary 
 way. The Government steps into the breach and 
 stands between the farmers and the banks, and 
 says the rate shall be so and so; the banks shall 
 charge so and so. Now, the man who is now a 
 member of the Rural Credits Society in any dis- 
 trict, gets the benefit of this fixed rate, and I say 
 that is the largest measure of benefit. Then, there 
 is the farmer who is in good standing, who can 
 borrow any sum from the bank at any time, but 
 cannot borrow enough money to enable him very 
 well and quickly to develop his resources. This 
 Act enables that man to borrow larger sums, and 
 that enables him to accomplish in one year what 
 in ordinary circumstances he could not accomplish 
 in that time, bringing to a head all the more quickly 
 the development of the farm. That is a tremen- 
 dous advantage. Every farmer will understand 
 that. More than that, for certain purposes he can 
 borrow money for two or three years. He can 
 borrow for new breaking and for the purchase of 
 cattle, where he does not get a return on the expen- 
 diture in one year. There is another class of man 
 to whom the Act means the difference between 
 success and non-success — the small, struggling 
 farmer who has no capital at the bank, the man 
 who has just made a beginning, and who may 
 have to leave the farm at times in order to make a 
 little "catch," so that he may carry on. That is 
 the kind of man to whom the Act means every- 
 thing, because the society realizes the kind of col- 
 lateral he has and can give him a loan, whereas 
 the banks would not consider his case at all. One 
 of the good points is the security. The man pledges 
 everything he has got to the society. For that 
 reason the society gives him the money he needs. 
 
 PRESENT FIXED RATE JUST 
 
 "Regarding the rate, money conditions change 
 and go up and down. It has been said, that it 
 f annot be defended that the Governijient should 
 set up arbitrarily the rate. I am not quite willing 
 
KuRAi. CREDllS SOCIETIES OF MANITOBA 
 
 to admit that. When conditions change quickly, 
 and when the rates go up and down, I claim that 
 in seeking to encourage and develop an industry 
 that is fundamental to this country, we are war- 
 ranted in doing things that are unusual. I say 
 further that the rate set up in this Act is a reason- 
 able rate under the conditions. I know conditions 
 in Canada. I know the rates that the business 
 men get. I know that large business corporations, 
 even during the period of the war, were able to 
 maintain a rate of 6 per cent, with the banks. We 
 say this to the banks: We will bring a group of 
 farmers to you. We will tell them that the risk 
 is eliminated, and we will say, 'We want you to 
 give these farmers the same rate as you gave to 
 the large business houses.' I say this, that if these 
 great business houses to which the banks are lending 
 money depend for their success upon the farmers, 
 surely it is common sense to lend relief to the farmers. 
 I have said it before and I want to say it again. I 
 don't adrrit that I have persuaded the tanks to 
 go thus far with me, but I have made the state- 
 ment before, and I make it again, with the knowl- 
 edge that living in this country for thirty years of 
 business activity provides, that if the banks of 
 Canada loaned to the farmers of Canada the 
 money belonging to the people of Canada at cost, 
 without any thought of gain, it would pay them to 
 do it. For this reason, the banks do not make 
 their money out of the farmers. They make their 
 money out of the great business undertakings that 
 this country possesses, where there is a huge turn- 
 over. But these great undertakings depend upon 
 the farmers for their success, and it is to the manu- 
 facturer's interest that the success of the farmers 
 be promoted, as it is they who make it possible for 
 the banks to lend these great business institutions 
 money. Why should not we start at the basis 
 by encouraging the farmer, by giving him a rate 
 that is just as good as any business man can get? 
 This rate is the backbone of this Act, because the 
 Government and the municipalities step in and 
 say: 'We wi'l stand between the banks and the 
 farmers as far as the rate is concerned,' and it is 
 according to the reflection of that that we find the 
 greatest benefit arising from the application of 
 this Act. It is irue that the banks have said to 
 us that the rate is not sufficient and that they 
 ought to have a httle more. They have said that 
 we ought to amend the Act by removing this arbit- 
 rary ruling. I have sa'd that before we would 
 amend the Act in this way: we would repeal the 
 Act altogether because its usefulness would be 
 gone. I now say to the bankers, however, that if, 
 as you say, money rates are higher than they were, 
 I would suggest that you confer with the directors 
 of the Rural Credits Societies, who are reasonable 
 men. If you go to them and confer with them, 
 and convince them that what you are suggesting, 
 that is, a 6'/2 per cent, rate, is reasonable and that, 
 after all, the great benefit is not in the rate itself, 
 but in the other advantages which the Act confers; 
 if you convince them and they come to the 
 Legislature, I will undertake to consider the matter. 
 The bankers think that a reasonable proposition, 
 and I hope that you will confer with them, and 
 that you will reach a joint conclusion, whatever 
 that may be. 
 
 "At the last session of the Legislature we made 
 an amendment to this Act, though very reluc- 
 tantly. .We only did it for the purpose of giving 
 reassurance and as a precautionary measure. We 
 
 amended the Act by taking the authority to lend 
 direct to societies where necessary. I sincerely 
 hope that it will never be necessary to put that 
 amendment into force. It would be a very unfor- 
 tunate thing, for, while the Government could do 
 it, and borrow money for the purpose of lending it at 
 at a cheaper rate than the banks, it would be a loss 
 to the Government. But that is not the main 
 objection. We have organized banks in Canada 
 for serving the people of Canada, and we want to 
 co-operate with them only. We want the bank 
 to fulfil its functions and to serve the people of 
 Canada and of this province. I am satisfied that 
 our relationship with the banks will continue as a 
 satisfactory relationship, and that eventually the 
 banks will come round to the point when they 
 realize that this measure is all right, and that 
 even from their standpoint it is working out for 
 their good. 
 
 SOCIETIES ALLAY DISCONTENT 
 
 "I have been discussing the rate feature. We 
 have had results from this Act already. The one 
 that I shall refer to first of all now is not of a mone- 
 tary nature. The finest thing accomplished by 
 this Act is the removal of the discontent from the 
 mind of the farmers in regard to their relationship 
 with the banks. The farmers at one time felt 
 that they were not getting a square deal, that their 
 relationship was not of a sufficiently reliable char- 
 acter as to bring satisfaction to their minds. The 
 farmer might get money one year, and another 
 year money might be very tight, and he might not 
 get any. The farmer in Manitoba to-day, however, 
 knows that he has a society where the atmosphere 
 is congenial, where he feels at home, and where he 
 knows that just as sure as the sun shines and the 
 seasons come round, he can rely upon his line of 
 credit for the following season. You know how 
 valuable that is, in-so-far as his peace of mind is 
 concerned, and, after all, that is a great thing. We 
 have removed the discontent. I say to any bank- 
 ers who may be here, that nothing could be more 
 important so far as tP.e banks are concerned than 
 that. The Act has created a better relationship be- 
 tween the farmers and the banks themselves; I 
 hope the day will come when the relationship 
 between the banks and the farmers of this pro- 
 vince will be such that we will not be looking for 
 unit banks or any other kind of banks, but will 
 recognize the great efficiency of the banking system 
 of Canada in its present form. Other splendid 
 results are the great amount of new breaking and 
 new building that has been possible because of the 
 credits granted; and the increased comforts that 
 the farmer has been able to enjoy because of the 
 operation of this Act, and these are great things. 
 
 GOVERNMENT SOLIDLY BEHIND SOCIETIES 
 
 "There are three thoughts that I would Uke to 
 leave with you to-day. The first of these is this: 
 Every farmer should interest himsslf in the suc- 
 cess of this movement. We have had farmers' 
 movements in this country that were not successful. 
 When you start out with an experiment of this 
 kind, how important it is that it should be successful. 
 Now, the success of this Act depends upon the 
 promptness and the regularity of the payment of 
 these loans. We are passing through fairly pros- 
 perous times, when loans can be paid. But in 
 my experience, and for 20 years I have associated 
 myself every day with farmers in arranging credits, 
 
8 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 in trying to work out with them the problems they 
 had to deal with — and nb man need tell me any- 
 thing about the hardship til6h have endured or 
 the hardships of farm life — I have seen prosperous 
 times succeeded by hard times. While to-day the 
 farmers are prosperous and they are making money, 
 these conditions will not always obtain. We will 
 get back again to the day of close margins. I 
 appeal to every farmer to stand by the society, to 
 be loyal to it and to see that loans are promptly 
 paid. There will be exceptions, and these will 
 receive special consideration, but, after all, so 
 much depends upon your readiness to see this 
 through. Do your part. Everything depends 
 upon the promptness of the payment of the loans. 
 So far as we have gone you have proven to the 
 administration that farmers can sit on Boards of 
 Directors and pass successfully on lines of credit, 
 and more successfully than a fereat inany of the 
 managers of banks placed in rural parts of the 
 country — and I say that with due respect to them 
 — where, perhaps, a young man with little business 
 experience is there, who does not understand, 
 perhaps, the farmer's mental attitude. In the 
 case of the directors of a society giving a loan to a 
 farmer, they know all about him, know his pros- 
 pects and know whether or not he is the kind of 
 man who will make a success of farming. As time 
 goes on we will convene further with the farmers 
 of the province, who everywhere will be able to 
 pass successfully on lines of credit. I want to say 
 to you again for your reassurance, that you need 
 have no doubt in your mind in-so-far as the future 
 support of the Government is concerned. I have 
 said that to day the attitude of the banks is satis- 
 factory. We do not know whether that will con- 
 tinue or not, but whether the banks blow hot or 
 cold, the Government of this province stands 
 absolutely behind you. I am warranted in saying 
 that, because we want to remove forever from the 
 minds of the farmers any doubt as to whether they 
 will get a line of credit for the next year's opera- 
 tions. 
 
 ACT WILL DEVELOP COMMUNITY LIFE 
 
 "The other point I want to leave with you is 
 this: From the standpoint of community life, this 
 Act presents a great opportunity to farmers. I 
 know something about the isolation of your life, 
 and that your circumstances are such that you are 
 apt to develop a narrow viewpoint. That is inevit- 
 able. Here is an opportunity for developing a 
 wider spirit. Here you can work for your neighbor, 
 work to help the farmer who is not so well off, where 
 farmers can come together for the purpose of advis- 
 ing and serving men, with the object of assisting 
 in the development of the district. That is of 
 immense importance. We ought to get more out 
 of life than what we get by our own effort. There 
 is an instinct in every man that finds satisfaction 
 in working for his country and for his fellow men. 
 You have that spirit in this Act, and it is bound to 
 develop a better spirit among the farmers. I 
 exhort you to take full advantage of this Act. If 
 you do, your work will be of great advantage to 
 this country. 
 
 "One thing that we have discovered — and it 
 should not have been discovered, because we knew 
 it all the time — is this, that in the rural parts of 
 the province we have men not only of education, 
 but broad-minded, enterprising citizens, who are 
 willing to take their place and to do their part in- 
 
 so-far as public life is concerned. I say that 
 should not have come about as a discovery, but 
 we have been deeply impressed with the fact that 
 we have so many of that class. They are men who 
 do not need to borrow themselves, but who sit on 
 Boards of Directors for the purpose of advising, so 
 that neighbors who are not so well off as they are 
 may get the benefit of their work. 
 
 "Without being invidious, I would Uke to men- 
 tion some of the men who have rendered signal 
 service: 
 
 "F. W. Hooker, St. Andrews, first president and 
 a first-class executive; D. H. Payne, of Freedale, 
 secretary of the Lawrence society; J. K. Muir, of 
 the Dominion Bank, Teuton, who is a great execu- 
 tive in-so-far as Rural Credits are concerned, and 
 who has three societies, with total loans of almost 
 $100,000.00 — ^Teuton, Armstrong and Narcisse socie- 
 ties; A. Mclntyre, Union Bank, Roblin, who pays 
 great attention to the society's business and takes 
 great interest in the same — total credits, $150,000; 
 John Arnott, president of the RobUn Rural Council, 
 who is an apostle of Rural Credits in the central - 
 western portion of the province, and who is a great 
 executive; Roy PhiUips, Fannystelle, who is a great 
 enthusiast and assisted in other organizations; W. 
 E. Crawford, Elkhom, who is the careful and pains- 
 taking secretary of a large society; John Sharpe, 
 Eriksdale, secretary, who assisted in building up 
 country between the lakes, and who is a capable 
 official; and J. E. Eastabrook, Swan River, who 
 organized the Swan River society there when every 
 one said it could not be done, who is as efficient as 
 he is enthusiastic. 
 
 "I merely mention these names as the names of 
 men who are outstanding, and who have rendered 
 great service in this movement. 
 
 "In closing, let me appeal for co-operation. The 
 Government and the municipalities have stepped 
 into the breach in this matter, and we have the 
 farmers linked up. By working as we ought we 
 can make a success of this jointly. We cannot 
 make a success of it without co-operation. Co- 
 operation to-day is the watchword of these societies. 
 While a million dollars was lent last year, we are 
 looking forward to the time when several million 
 dollars will be lent for this purpose, and when the 
 good work will be extended. Let me say again 
 on behalf of the Government how pleased I am 
 that circumstances have arisen that enable us to 
 show you a little hospitahty when in the city, and 
 to express the hope that you will enjoy yourselves, 
 and that you will return home thoroughly satisfied 
 with the results of your coming together." 
 
 Mr. Ross: "Mr. Brown mentioned the fact that 
 the backbone of this Act was the fixed rate. I was 
 in Edmonton a short time ago, and asked one of 
 the officials of the Government about the progress 
 being made in connection with the movement in 
 Alberta. There are ten societies chartered in 
 Alberta, but it looks to me that the work is para- 
 lyzed there, because the rate is not fixed, and I 
 was told that there was a good deal of friction and 
 trouble there with the banks in reference to the 
 rate, so much so that progress could not be made. 
 I agree with Mr. Brown that the backbone of the 
 Act is the fixed rate, and that it must be fixed 
 before any progress can be made. It would be 
 impossible for any society to fight out with the 
 banks the question of rate, which undoubtedly must 
 be fixed by the Government. He also said the 
 Government was squarely behind the movement. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 I wish to make a remark or two on that. When 
 this Act was introduced in the first place, it was 
 not a Government measure. It was a private 
 measure. It was not accepted completely. It was 
 a new movement, and while some members of the 
 Government might have appreciated it, they did 
 not take much interest in it. It was very largely 
 because of the persistent efforts of Mr. Prout that, 
 step by step, the tHng was pushed a little farther 
 forward. I wish to say with reference to the 
 Provincial Treasurer, Mr. Brown, that he has been 
 a friend of the Act from the beginning. When the 
 Act was presented to Mr. Brown, he did not do 
 what some members of some Governments do; that 
 is, say they will consider the matter carefully and 
 then fail to act. From the moment that a decision 
 had to be made Mr. Brown promptly made the 
 decision, and I think there is a great deal of credit 
 due to him for the prompt decisions he made from 
 time to time in connection with this Act. I wish 
 to state further that gradually the members of the 
 Government have come to appreciate the meaning 
 of this movement, and I think that now the Gov- 
 ernment is fully converted to the Rural Credits 
 movement and is entirely behind the farmers." 
 
 Mr. Brown: "I just wish to say that this Act was 
 introduced in the House by a private member, the 
 member for Kildonan and St. Andrews, for the 
 reason that we were introducing at the same time 
 the Manitoba Loans Act. We felt that to take up 
 both measures at once might be making progress 
 unduly, and finally it was agreed to try out the 
 
 Rural Credits Act in one society. Because the 
 Act involved the expenditure of money, it was 
 necessary for the Government to endorse it. The 
 responsibility fell upon me. 
 
 "What I omitted to say, and what I should 
 have said, and my address to-day would not be 
 complete unless I made this reference, is this: 
 I don't think there is a case in the history of Canada 
 where a man has rendered such service, purely out 
 of love for the work, as the member for Kildonan 
 and St. Andrews. Mr. Prout is a member of the 
 Legislature and cannot receive any emolument 
 from the Government. He cannot take on any 
 office in connection with which there is any remun- 
 eration. But in spite of that fact, he has devoted 
 almost all his time to the administration of the Act, 
 without remuneration of any kind. The Govern- 
 ment has tried to persuade him to accept the 
 position of Superintendeat of Rural Credits, but 
 he refused, and, of course, lie could not accept 
 without retiring from or resigning his position as 
 a member of the House. But he has continued to 
 do this work out of his interest in the movement, 
 having no other reward in sight at all. I want to 
 say on behalf of the Government that it appre- 
 ciates very greatly the contribution he has made, 
 and the whole-hearted manner in which he has 
 worked for the sucess of this movement." 
 
 Mr. Ross: "You all know who is the father of 
 this movement, and, therefore, I need not say 
 anything further in introducing Mr. Prout." 
 
 § 
 
iO 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 What Rural Credits Societies Mean to the Farmer: 
 to the Banker: to the Community 
 
 George W. Prout, M.L.A. 
 
 Surrounding the city of Winnipeg and in a radiu? 
 of slightly over fifty miles, there are 22 munici- 
 palities. I have looked over the statistics covering 
 these local Governments, and find there are over 
 3,200,000 acres in these municipalities. Using the 
 latest information provided on the subject, I find 
 that 750,000 acres of land are under cultivation, 
 showing, if these figures are accurate, and they are 
 approximately so, just two and a half million acres 
 of land within two hours of this city; land which 
 is known to be excellent, never yet touched so far 
 as cultivation goes by the human hand. If you 
 will look at a railroad map you will notice that the 
 district is excellently served by the railroads. I 
 think it is safe to say that railroad construction, 
 in-so-far as this area is concerned, is completed, 
 unless there is development in traction lines. The 
 natural advantages of this area are many, and not 
 the least among these advantages is the great 
 metropolitan city of Winnipeg, a capital with its 
 every inducement to those who till the soil. It is 
 the great manufacturing and business centre of 
 Western Canada. It is a great banking centre, 
 and yet, right under our noses, there is a kingdom 
 never yet touched by man. This fertile territory 
 is not imorganized territory. It has its roads, its 
 school boards, its local councils, but is undeveloped, 
 and has been since Manitoba became a province 
 fifty years ago. 
 
 To me these figures are eloquent testimony and 
 proof convincing of the need of some new system 
 or new idea to assist us to reduce this area to terms 
 of production of the necessaries of life. 
 
 Why, if we would only draw on our imagination 
 and reduce it to actual possibilities, we would 
 settle on this very land over 10,000 farmers, who, in 
 terms of wheat, could produce in any one year 
 over fifty million bushels. Just what that would 
 mean to Manitoba generally, to the farmers them- 
 selves, and to the business men, they would have 
 to imagine. 
 
 Now, there is a reason why these lands adjoining 
 the city of Winnipsg are undeveloped. The reason, 
 in my humble opinion, is due to the fact that we 
 have neglected to mobilize in the service of the 
 people, and of increased production, the genius, 
 ability, local pride, local knowledge and common 
 sense of the people of the districts affected in the 
 working out and solving of the problems incidental 
 to their own areas. 
 
 What farmer with any sense wishes a neighbor 
 five miles away when he could have one a half a 
 mile away? Is there a farmer who wants a school 
 closer to his farm? Does he need a telephone? 
 Does he need a community hall? Then he needs 
 neighbors to share the expense, to bear part of the 
 overload. 
 
 In the working out of each one of these com- 
 munity problems I wish to show that the key 
 which unlocks the door to development must be 
 opjrated by the man on the spot. This is the great 
 underlying reason why the Winnipeg district is 
 
 undeveloped. Some say it is the speculators 
 Others say it is the bankers. I say that the develop- 
 ment of the Winnipeg area and the Manitoba field 
 is not retarded altogether either by the speculatcrs 
 or the banks. It has been retarded because the 
 residents of municipalities have not appreciated the 
 great truth "that action takes place only when 
 individuals unite for common purposes, put their 
 heads and their knowledge together, and work out 
 their own problems for themselves." 
 
 True, the business man, the banker, the clergy- 
 man, can assist, but action must come from the 
 people themselves, and when that united action 
 comes, there is no force or want of force which can 
 impede progress along safe and sane lines. 
 
 You have noticed that I have not used all the 
 uncultivated area in Manitoba as my illustration. 
 Figures shown in that connection would be enor- 
 mous. I am using the front, back and side doors 
 of Winnipeg. As a people we trifle with huge 
 figures. We speak of our marvelous area, possi- 
 bilities and potentialities. Then we go home and 
 carry on in the same old way. If we set our minds 
 on the development of the Winnipeg district only, 
 it would just mean an addition to our annual 
 wealth of one hundred million dollars. Multiply 
 these figures by the other undeveloped portions of 
 Manitoba, and realize the huge and constructive 
 work ahead of us all to-day. 
 
 In the upbuilding of this virgin territory, and of 
 the other parts of Manitoba, there is a real con- 
 structive agency at work. It is the Boards of 
 Directors of Manitoba Rural Credits Societies. 
 To them is entrusted by the Rural Credits legisla- 
 tion the right and direction of these societies, and 
 of the granting of credit, and the intensive develop- 
 ment of their individual districts. 
 
 WHAT SOCIETIES ARE ACTUALLY DOING 
 
 Now, just what has the Manitoba Rural Credits 
 Act accomplished? Has its only business been 
 that of lending farmers credit and collecting it? 
 Just what is the average society doing? Is its 
 influence in any way of value to the community? 
 Let us see, and let us deal with facts only. By 
 way of illustration I will take as samples two 
 societies in this province. I wish to go to Freedale 
 in the Rural Municipality of Lawrence. You will 
 observe that you need to drive for forty miles in a 
 sleigh to get there. I wish to observe in justice 
 to a banker, that he could not possibly handle this 
 business except at a great risk and at great cost. 
 This means that prior to the advent of the Rural 
 Credits Society, no one in the district received 
 banking accommodation. This past season this 
 society had 79 borrowers who were granted credits 
 of $22,360.00. You will note that these loans 
 averaged about $280.00; of these loans 25 per cent, 
 was for new breaking; over 25 per cent, for live 
 stock. These loans just enabled these families to 
 stay on the land and improve it faster than they ever 
 did before. It prevented many heads of families 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 11 
 
 from resorting to the practice of working out in the 
 winter in order to get cash to carry on the next 
 sunimer. This society cannot talce care of all the 
 business, so another society has been chartered. 
 
 Take the case of another society, the Teulon 
 Rural Credits Society, which started business in 
 the spring of 1919. It granted credits of $73,200.00, 
 of which $36,800.00 was used for new breaking, 
 and $8500.00 for live-stock purchases. The Teulon 
 district is close to the city of Winnipeg. It is 
 wonderful land. With the credits used there this 
 year by actual count there were 4000 acres of land 
 broken up with the society's credit. Figure that 
 out in terms of increased wealth for the district, 
 and there must be at least 75,000 bushels of 
 wheat grown off these new acres next crop season. 
 I could give you any number of instances of devel- 
 opment which has taken place, but I am not going 
 to take the thunder of the Boards of Directors who 
 are here and who will themselves tell the story of 
 what Rural Credits has meant to their community, 
 and to some of them individually. 
 
 Earlier in my talk I pointed to the work of these 
 Boards, and I now wish to pay some attention to 
 this living part of the Rural Credits Act. I made 
 the statement that if you wish the best from a people 
 you must mobilize them. In the settlement of 
 these problems of credit, great credit must be given 
 to the services rendered by the Boards of Directors. 
 
 This Act became operative in 1917 in which year 
 the St. Andrews Rural Credits Society started and 
 granted credits of $17,000.00. The next year ten 
 societies operated, with credits of $215,000.00, and 
 this year 38 societies operated, with credits exceed- 
 ing $1,000,000.00. Analyzing this latter, we find 
 that over $240,000.00 was for new breaking, or 
 25,000 acres new land turned to the sun; live stock, 
 over $170,000.00; crop loans, over $270,000.00, and 
 so on, and this accomplished with a small per- 
 centage of the municipalities under the Act. 
 
 We are able to show some remarkable growth in 
 certain sections of the province. Take the Muni- 
 cipality of Shell River. There the Robhn society 
 operated in 1918, with credits of $50,000.00. In 
 1919 a new society was formed, the Silverwood 
 society, and it and the Robhn society granted 
 credits this year of $125,000.00. Now there are 
 two more societies adjoining these, the Hillsburg 
 society, with credits of $40,000.00, and the Maka- 
 roff society, not yet operating; so from one society 
 in 1919. with credits of 50,000.00, there have 
 grown three new societies, with credits this year 
 totalling over $150,000.00. The development in 
 the Municipalities of Shell River and Hillsburg has 
 been just amazing. It is an object lesson of the 
 driving force of the people themselves. 
 
 Now, just what assistance are these societies to 
 the banks? Take the societies in the Robhn area 
 as illustrations. There is the active and successful 
 Reeve, who is President of the Roblin society, and 
 seven of the keenest, livest and most successful 
 farmers in the community. Doing what? Grant- 
 ing credits; handing out advice, and laying down 
 the Rural Credits law to delinquents. Why, out 
 of $75,000.00 credits there is not an overdue note. 
 Why? Because it is a disgrace to be hauled over 
 the coals by your own neighbors. "Bill Jones 
 doesn't know enough to meet his note when due." 
 "He is ignorant." I could go on and tell you of 
 the personal strength of these Boards, but that 
 would be repeating. It is sufficient, however, for 
 
 me to tell you that the driving force for Rural 
 Credits in Shell River Municipality to-day are 
 Boards composed of 25 practical farmers, each in 
 personal contact with most of the borrowers in his 
 area. Why, the banker out there at Roblin, a good 
 man, too, doesn't any longer wear a haunted look. 
 He knows that these directors are watching their 
 risks, and he is able to sit back and think a little 
 of some of his other numerous problems. The 
 Rural Credits Societies — these community organ- 
 izations — are responsible institutions. It's the 
 community credit, and the fly-by-night boi rower 
 has small chance for consideration. 
 
 The Rural Credits Societies have succeeded in 
 arresting a lot of the criticism which has been 
 hurled at the banks — some of it just, and a very 
 large portion unjust. If a farmer wishes a line of 
 credit and is not satisfied with the way the banker 
 is handling him, he can go to hie Rural Credits 
 Society and ask for a decision from his own peers. 
 And why should this not be so? Are not the moneys 
 used by the chartered banks community moneys? 
 Boards of societies realize the banker's position, his 
 lack of personal knowledge of some of his borrowers, 
 they supply that missing link, and with the bank's 
 funds they distribute for the purposes of produc- 
 tion, and safely for the banker, a certain portion of 
 his loans. 
 
 I have been asked, and am expected to state, 
 what in my opinion is the future of Rural Credits 
 in Manitoba and Western Canada. To-day we 
 have in Manitoba sixty societies, with an author- 
 ized capital of $1,200,000.00. These societies this 
 year will loan for productive purposes a total of 
 $3,000,000.00. 
 
 In the Province of Alberta, which has adopted 
 the Act, seven societies have been chartered, and 
 some of them are loaning. I am told that the 
 neighboring province of Saskatchewan will follow 
 suit; when that event takes place you may look for 
 the following development: Three hundred societies 
 in Manitoba, and an equal number in Saskatchewan 
 and Alberta, and as a direct result of the activities 
 of these community organizations a tremendous 
 increase in the agricultural production of these 
 Western Provinces. 
 
 From correct observations we wish to make the 
 positive statement that, without the increase of 
 one single farmer in this province, it is possible to 
 very largely increase production, that the hindrance 
 so far has been want of adequate credit and adequate 
 planning in connection therewith. 
 
 Recently I received a letter from the Secretary 
 of Agriculture for the United States, and the Min- 
 ister of Agriculture for Ontario; in the former case 
 admitting the need for short term co-operative 
 credit societies, when he made the statement: 
 "That in the southern part of the United States 
 sixty per cent, of the credit used was advanced 
 credit," a vicious kind of financing; and in the case 
 of the Minister of Agriculture for Ontario, a state- 
 ment that the old province of Ontario was working 
 on the Rural Credits Act, with action in sight. 
 Favorable communications have come to us from 
 Hawaii and the Australian states, and some indi- 
 vidual states to the south of us. With all their 
 small banks and machinery, and with the large 
 aggregate volume of loans, they are all admitting 
 that they need co-operative action in order that 
 all their producers might be working at reasonable 
 capacity. 
 
12 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 The Rural Credits Act has always seemed to me 
 just plain common-sense. Our Governments, in 
 order to be effective, divide their reponsibilities 
 and delegate. Our Provincial Government charges 
 the municipalities with local government within 
 their boundaries, because that is the common-sense 
 way of governing, and in this Rural Credits we are 
 just following established practice and delegating 
 to those affected the power to improve their posi- 
 tions within themselves. 
 
 Rural Credits Boards are advisory to the farmers, 
 and some farmers need advisers. They ought to 
 counsel with the successful leaders in their respec- 
 tive sphere, and this is just what the Rural Credits 
 Act provides for. 
 
 There is a difference of opinion between the 
 bankers and societies as to the interest rate. The 
 bankers are inviting a round-table talk with some 
 of your leaders on this matter. I am advised that 
 this is the only cloud on the horizon so far as they 
 are concerned. I feel strongly that the interest 
 rate should be rigidly fixed. Have not interest 
 rates been rigidly fixed for years, and rightly so. 
 I know that you will approach these matters in the 
 attitude of statesmen, not in a personal way, but 
 in a broad and liberal manner. I think it is well 
 for me to acknowledge the service the bankers 
 have rendered in cormection with this development, 
 and I wish to state publicly that we have no inten- 
 tion now of competing for deposits. We wish to 
 continue to provide the best security on earth for 
 our chartered banks, and invite their full co-opera- 
 
 tion. Nay, we invite even more than that. We 
 wish for the day when we will not hear that a local 
 banker is knocking a society, but that m place of 
 that, the best friends and boosters for these co- 
 operative organizations will be the local country 
 banker. 
 
 Directors and officers, I thank you for your 
 attendance and your great disinterested service in 
 this cause. You, all of you, have the personal 
 satisfaction of knowing that you are giving real 
 public service and lending a helping hand now and 
 then to a brother too weak to stand alone. 
 
 Mr. Arnolt: "Mr. Prout has rendered great ser- 
 vice to the Rural Credits movement in Manitoba 
 as a whole. I think his splendid work calls for 
 some expression of appreciation from us. I think 
 that this first convention of the Rural Credits 
 shareholders and directors should do something to 
 mark our sense of appreciation of all that Mr. 
 Prout has done. With the chairman's permission, 
 therefore, I would call upon some-one to make a 
 motion to this effect." 
 
 Mr. Crawford: "I move that a committee be 
 named to act with a view to presenting Mr. Prcut 
 with some merrento or to recognize in sorre way 
 the splendid services which Mr. Prout has ren- 
 dered. I think this a very happy suggestion. I 
 think it is entirely fitting that such action should 
 be taken." 
 
 The motion was put to the meeting and carried 
 with enthusiasm. 
 
 m 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 13 
 
 Prices of Farm Products and Probable Future Prices 
 
 G. F. Warren, Ph.D. 
 Professor of Farm Management, College of Agriculture, Cornell University, Ithaca, N. Y. 
 
 There are two distinct questions concerning 
 prices: 1. Why are prices in general hic;h? 2. Why 
 has the price of a particular commodity followed 
 the course that it has? 
 
 The primary reasons for the general high price 
 level are financial inflation and shortage of goods. 
 The price of a particular commodity is affected by 
 inflation, and by other factors that vary with the 
 commodity in question. Some products, as horses, 
 are lower in price than they were before the war. 
 Other things are much higher than the general 
 price level. 
 
 The actual destruction in the wai area has had 
 some effect on prices. The destruction of war 
 materials, ships, coal, iron, wool, has had a much 
 more serious effect. But destruction of property 
 can explain only a very small part of the price 
 changes. 
 
 The killing of a large number of men of the most 
 productive ages without a corresponding decrease 
 in old men, women and children, has tended to 
 cause a shortage of goods. 
 
 But the most powerful influence in causing a 
 shortage has been the loss of time due to employ- 
 ment of many millions of men and women in war 
 work. 
 
 Our railroads are short of rolling stock. The 
 cars and tracks are badly out of repair, because the 
 ■persons who would have been building cars and 
 engines and keeping up the tracks have been 
 doing war work. 
 
 Our houses are unpainted and unrepaired, and 
 new ones have not been built as rapidly as would 
 have been done, because the builders have been 
 doing government work or serving in the army. 
 
 The stocks of goods on the shelves of the stores 
 of the world are low, so low that it is often 
 not possible to buy. To properly carry on frade 
 the stock that lies on the shelves must be 
 replenished. The clothing supplies, furniture and 
 stocks of other goods in the homes are low. These 
 reserves must be supplied. 
 
 The fences and buildings on farms have not been 
 kept up. These must be repaired and new ones 
 built to make up for the several years in which 
 such things have been neglected. 
 
 The greatest factor in shortage of goods has 
 been the transfer of workers from productive work 
 to war work. The evidences of this shortage are 
 everywhere, from the neglected farm fence to the 
 railroads, and from the home *ardrobe to the cotton 
 warehouses. 
 
 A recent report from the United States Depart- 
 ment of Agriculture gives the number of live stock 
 before the war compared with the latest figures 
 from France, Italy, Switzerland, Belgium, Nether- 
 lands, Denmark, Sweden, Germany, United States, 
 Canada, Argentina, Australia and New Zealand. 
 Cattle increased 5 per cent., sheep decreased 1 per 
 cent., and hogs 7 per cent. 
 
 Taken all together the shortage of goods explains 
 only a little of the general high price level, although 
 it does explain many single cases where the price 
 is much above the general price level. 
 
 INFLATION 
 
 The primary cause for the general high price is 
 inflation. 
 
 Table 1 —index numbers of monetary circulation, bank deposits, wholesale prices of food and 
 
 ALL commodities, AND PRICES PAID TO PRODUCERS FOR FARM PRODUCTS, IN THE UNITED STATES. 
 
 
 (1) 
 
 
 (1) 
 
 (2) 
 
 (2) 
 Index 
 
 (3) 
 
 
 Monetary Circulation 
 
 Bank Deposits 
 
 Index 
 
 Numbers : 
 
 Index 
 
 
 
 
 
 Numbers: 
 
 Wholesale 
 
 Numbers: 
 
 
 
 
 
 Wholesale 
 
 Prices of 
 
 Prices of 
 
 
 Amount in 
 
 Index 
 
 Amount in Index 
 
 Prices of 
 
 "All Com- 
 
 30 Farm 
 
 
 Millions 
 
 Numbers 
 
 Millions Numbers 
 
 Food 
 
 modities" 
 
 Products 
 
 1910 
 
 3,1541 
 
 
 10,980 ] 
 
 
 
 
 1911 
 
 3,238 
 
 
 11,503 
 
 
 
 
 1912 
 
 3,304 \ 
 
 100 
 
 12,455 1- 100 
 12,678 
 
 100 
 
 100 
 
 100 
 
 1913 
 
 3,390 
 
 
 
 
 
 1914 
 
 3,505 J 
 
 
 13,430 
 
 
 
 
 1915 
 
 3,682 
 
 111 
 
 14,411 118 
 
 106 
 
 102 
 
 101 
 
 1916.. . 
 
 4,159 
 
 125 
 
 17,840 146 
 
 128 
 
 125 
 
 121 
 
 1917 
 
 4.914 
 
 148 
 
 21,273 174 
 
 179 
 
 178 
 
 185 
 
 1918 
 
 5,579 
 
 168 
 
 23,759 195 
 
 192 
 
 200 
 
 199 
 
 1919 
 
 *5,709 
 
 *172 
 
 *25,731 *208 
 
 *211 
 
 *208 
 
 *198 
 
 (1) E. W. Kemmerer, American Economic Review, Vol. VIII., No. 2, June, 1918. Figures for 1918 
 supplied by Professor Kemmerer. 
 
 (2) Recalculated from Reports of the United States Bureau of Labor. 
 
 (3) Calculated from reports of the Bureau of Crop Estimates, United States Department of Agriculti re. 
 * Figures for 1919 represent only a portion of the year. 
 
14 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 The monetary circulation of the United States 
 in 1919 was 72 per cent, greater than for the five 
 years 1910-1914. Most of the business of the 
 United States, variously estimated at 75 to 90 per 
 cent., is done by bank deposits, which circulate as 
 checks. 
 
 The improvements in banking methods have 
 made it possible for a dollar in currency to do 
 much more business than formerly. Bank deposits 
 are, therefore, a better measure of the total circu- 
 lating media than monetary circulation. Bank 
 deposits in 1919 were 111 per cent, greater than 
 for the five years, 1910-1914. 
 
 In 1915 bank deposits were up 18 per cent., but 
 wholesale prices of "all commodities" were up only 
 6 per cent. In 1916 deposits were up 46 per cent., 
 and general prices 25 per cent. Not until 1917 
 did prices catch up with bank deposits. Since 
 that time bank deposits and prices have kept pace 
 with each other. 
 
 Some persons have thought that food prices or 
 prices paid to farmers were the cause of all price 
 increases. It will be observed that wholesale 
 prices of food, prices paid to farmers and whole- 
 sale prices of all commodities all increased at 
 practically the same time, but that all lagged 
 behind the increase in bank deposits. 
 
 Prices during the Civil War followed the same 
 course. 
 
 Table 2. — index numbers of wholesale prices, 
 
 civil war and world war. five-year 
 
 average before the war equals 100 
 
 Civil War 
 
 
 World War 
 
 
 1856-1860 
 
 100 
 
 1909-1913 
 
 100 
 
 1861 
 
 95 
 
 1914 
 
 102 
 
 1862 
 
 112 
 
 1915 
 
 103 
 
 1863 
 
 141 
 
 1916 
 
 127 
 
 1864 
 
 181 
 
 1917 
 
 180 
 
 1865 
 
 205 
 
 1918 
 
 202 
 
 1866 
 
 . 181 
 
 1919 Jan.-July.. 
 
 211 
 
 1867 
 
 163 
 
 
 
 1868 
 
 . 152 
 
 
 
 1869 
 
 145 
 
 
 
 1870 
 
 135 
 
 
 
 1871 
 
 . 129 
 
 
 
 1872 
 
 132 
 
 
 
 1873 
 
 . 130 
 
 
 
 1874 
 
 . 126 
 
 
 
 1875 
 
 . 121 
 
 
 
 1876 
 
 . 112 
 
 
 
 1877 
 
 . 105 
 
 
 
 1878 
 
 96 
 
 
 
 1879 
 
 92 
 
 
 
 1880 
 
 , 101 
 
 
 
 OTHER EXPLANATIONS OF HIGH PRICES 
 
 Among the numerous other beliefs as to why 
 prices are high may be mentioned, the fixed price 
 for wheat, failure to sign the peace treaty, profiteer- 
 ing, high wages, etc. 
 
 The price of wheat was reduced by the fixed 
 price, so that in the beginning the fixed price was 
 certainly not the cause of high prices. The price 
 of wheat for the 1917 crop was so low compared 
 with other things that we resorted to all kinds of 
 patriotic appeals to prevent the use of wheat, 
 made regulations to prevent its sale for stock food, 
 and then practically ran out of wheat before spring. 
 The price of the 1918 crop was so low that the supply 
 of wheat was practically exhausted before the new 
 
 crop came. At all times since the price of v/heat 
 was fixed, wheat too poor for milling has been 
 selling in New York for chicken feed at prices 
 above the fixed price for good wheat. 
 
 Profiteering is a result rather than a cause of 
 high prices. Financial inflation has made it pos- 
 sible to obtain a good profit by going in debt for 
 goods and holding them to sell for an increased 
 number of cheap dollars with which to pay the 
 debts. Since some one must save eggs, potatoes 
 and butter for winter use, some one has inevitably 
 sold for more dollars than usual. Store keepers 
 and families, with the usual supply of goods on 
 hand, found these supplies, increasing in price. 
 In some instances .the supply held by one person 
 has been so large as to be justly called "hoarding," 
 but in general, the stocks of goods have moved out 
 too rapidly so that the supplies have not lasted 
 till the next harvest, showing that "hoarding" has 
 been the exception, not the rule. Profiteering is 
 an inevitable result of rising prices. It is not the 
 cause of high prices. 
 
 Wages have lagged behind inflation and prices. 
 So with practically every other popular explana- 
 tion of high prices, the assigned cause has been an 
 effect that followed high prices rather than caused 
 them. Probably we shall soon see high land prices 
 assigned as the cause of high prices, but land 
 prices are one of the last things to respond to price 
 changes. 
 
 HOW LONG WILL PRICES BE HIGH? 
 
 The popular idea as expressed by most newspapers 
 was that prices should fall at once when fighting 
 stopped. Much surprise and impatience was 
 expressed because prices did not drop. Now the 
 tendency seems to be to believe that prices will 
 never fall, and that every one should proceed as if 
 present prices were to continue forever. Some 
 able economists hold this view. I believe, however, 
 that the majority of the students of prices wi\\ 
 agree with my conclusion expressed as follows: 
 Since inflation is the primary cause of high prices, 
 and shortage of goods the major secondary cause, 
 prices may be expected to fall as the inflation 
 decreases and the shortage of goods supplied. If 
 this is true we turn our guessing contest to the 
 problems of when the shortage of goods will be 
 made up and when deflation will take place. 
 
 The necessary repairs of farms, railroads, fac- 
 tories and houses, and some new construction, 
 together with the necessity of replenishing the 
 stock of goods in stores and houses, calls for a 
 very large production. We may expect a very 
 active demand for goods until the shortage is made 
 up. How long this will be depends on the weather 
 and the stability of the workers cf the world. 
 Ultimately the Balkans and Russia will come 
 back into world affairs. These countnes are large 
 exporters of food. How soon they will again 
 compete with us is one of the most uncertain 
 problems cf all. 
 
 It seems probable that it will take several years, 
 probably three to five years to make the necessarv 
 repairs to property. During this period there will 
 doubtless be a very active demand for goods. 
 There will probably be periods of uncertainty, 
 violent price fluctuations, and small panics here 
 and there, but one would expect them to be short. 
 
 The tendency to clear new lands and build new 
 railroads and homes will doubtless be checked by 
 the high prices, and to some extent, by expectation 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 15 
 
 of lower prices. It is, therefore, to be expected 
 that after the necessary repairs are made, there 
 will be a slackening of industry, and that a financial 
 panic may occur. The weather and fear of wars 
 and revolutions will probably be the factors that 
 will determine the exact point at which a panic 
 comes. 
 
 Those who can foresee possible panics in periods 
 of prosperity and can see through a panic to the 
 sound business growth that is to follow, can per- 
 form a public service by encouraging a sound 
 development rather than wild speculation pre- 
 ceding the panic, and can help the gloom of the 
 panic by seeing the prosperity that is to come. 
 
 PROCESS OF DEFLATION 
 
 Considering America alone, it would seem prob- 
 able that the time should come when Government 
 receipts will exceed expenses. When this lime comes, 
 the process of deflation might be expected to begin. 
 But other factors influence the results. The 
 European countries have inflated their currency 
 more than we have. Inflation tends to equality 
 between the different countries before stable equili- 
 brium is reached. When we entered the war we 
 paid our debt to Europe and made large loans to it. 
 These loans prevented as great inflation of their 
 currency as would othrewise have occurred, but 
 served to rapidly increase our inflation. This 
 leveling up process must continue. We cannot 
 continue to trade with Europe unless she brings 
 goods in exchange, or unless we lend her money. 
 Foreign exchange is now almost prohibitive. 
 
 The purchase of property in Europe would lower 
 exchange without inflation here. Some such invest- 
 ments will doubtless be made, but Americans are 
 not generally disposed to buy European property. 
 The primary means of flnancing trade will probably 
 be through the sale of European bonds in America 
 and the extension of commercial credit to European 
 buyers. Some of these bonds will be used for 
 bank credit and consequent inflation in this coun- 
 try. It is, of course, possible that the tendency to 
 deflation will offset these loans, but this does not 
 seem likely. Ultimately we will also assist in 
 financing Russia. Government activities attempt- 
 ing to reduce the high cost of living may result in 
 action that will check inflation, but it is much more 
 likely that such efforts will continue to spend 
 themselves in lool^ing for profiteers and herders 
 rather than in taking action that would check the 
 cause of high prices. 
 
 Considering all these possibilities, it dees not 
 seem that deflation will be very rapid immediately, 
 and it is probable that the period of maximum 
 inflation is yet to come. 
 
 Since the situation is now world-wide, it seems 
 certain that the drop in prices will not come as 
 soon as it did after the Civil War, and the drop 
 will be more gradual when it comes. 
 
 The pre-war level may never be reached, but it 
 seems probable that a very considerable drop in 
 prices will take place in five to fifteen years. 
 
 SOCIAL EFFECTS OF INFLATION 
 
 May I digress enough to call attention to some 
 public effects of inflation. 
 
 When the dollar is unsettled, the most far-reach- 
 ing social effects follow. Theoretically, if currency 
 doubled and if all prices doubled at the same mo- 
 ment, the world might go on as usual. But when the 
 
 dollar is so unstable it unsettles the minds of men. 
 The economic balance gradually adjusts itself to 
 the new level, but unequal periods of tinie are 
 required and most serious injustices occur in the 
 settlement. The most serious result is that news- 
 papers. Government officials and the general public 
 try to blame the results on some class in the popu- 
 lation. It is true that the unstable dollar makes 
 fabulous profits inevitable. It encourages sharp 
 practices, but the results are not due to the acts 
 of labor, or capital, or farmers, or middlemen. 
 The arraying of class against class is the most 
 serious result of financial inflation. In efforts to 
 find the culprit farmers are arrested, retailers are 
 accused of dishonesty, middlemen are called an 
 unmitigated evil, and labor is Bolsheviki if it asks 
 for higher wages. All classes turn to Governmental 
 agencies and expect the Government to find and 
 punish the culprit who prevents me from living 
 better than ever before when the quantity of goods 
 in the world is less per capita than formerly. The 
 Russians have carried this to the ultiamte conclu- 
 sion in their blissful philosophy that "each of us 
 can live at the expense of all of us without any of 
 us doing any work." 
 
 Rising rents and land prices may be the next to 
 draw attention. We should distinguish clearly 
 between real, unearned increment and adjustment 
 in prices to meet the new dollar. If a farmer sold 
 his farm five years ago for $100.00 per acre, but 
 now sells it for $200.00, he could in each case buy 
 about the same quantity of other things. He 
 would be no betetr off than if he had sold before 
 the war. If he sold at the higher figure and paid 
 debts with the money he would have profited at 
 the expense of the lender, but society in neither 
 case has any just complaint to make. In each 
 case it would have exchanged the same quantity 
 of other goods for land. 
 
 If society objects to rising land values, the farmer 
 might propose to society that he be paid in goods 
 rather than in fifty-cent dollars. Those who do 
 not believe in private property will say that the 
 land all belongs to society. But even this philos- 
 ophy does not cover the case for a very large part, 
 and often all the selling price of agricultural land, 
 is a delayed payment for the labor of making the 
 farm. 
 
 When the dollar is so unstable, how is the wage 
 worker to know whether he is getting his share of 
 the good things of life? 
 
 In all this social nightmare, when each person 
 has lost his faith in his fellow men, and even some- 
 times his faith in God, because the dollar has ceased 
 to be reliable, the farmer can perform a great 
 public service. The farmers are about the only 
 class in society that are in a position to think in 
 terms of things without dollar confusion. They 
 can express the value of a bushel of wheat or a 
 quart of milk in terms of labor. 
 
 WHY ARE CERTAIN PRICES HIGH? 
 
 The factors that will explain most of the devia- 
 tions from the general price level are: (1) the 
 length of time from the beginning of the produc- 
 tion of the product to. its completion; (,2) the 
 weather; (3) change in demands due to war. Each 
 of these influences acts independently of the others. 
 Some combination of them working co-operatively 
 or against each other, together with inflation, 
 explains most of the individual price curves. 
 
 Products that require a short time from beginning 
 
16 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 to completion are quickly stopped if prices do not 
 keep up with the general price level. Grains are 
 in this class, and prices of grains rise pronmptly. 
 It takes several years to raise a cow and milk 
 responded slowly to inflation. In the case of colts 
 and calves, the reduction in the industry at first 
 increases the apparent surplus. If calves are not 
 raised there is more milk on the market — that 
 which the calves would have used. If colts are 
 not raised the mares can do more work. 
 
 Day labor shifts quickly, and its pay was the 
 first to be adjusted. Skilled labor is more stable, 
 and received its wage increase later. It takes 
 several years to make a stenographer or clerk, and 
 salaries of clerks rose more slowly. To raise a 
 college professor requires even more time than to 
 raise a dairy cow, and professors' salaries respond 
 more slowly than most other things. Before they 
 do rise there will be a great shortage of professors 
 and well trained men preparing for professorships. 
 
 Certain products are relatively more needed in 
 war than peace. Wool, iron, grain, ships are 
 among these things. 
 
 The soldier wore out his clothes perhaps five 
 times as fast as in peace, and he needs wool. This 
 explains the phenomenal rise in the price of wool 
 that occurs at each war. 
 
 Animal foods are less in demand when the first 
 pinch of war comes, because consumers turn to the 
 cheaper vegetable foods. This checks production. 
 Later, when wages rise, chere is an active demand 
 for animal foods and a shortage of them. 
 
 Since the first results of inflation is to increase 
 prices before wages rise, many families moved to 
 smaller homes or took roomers. Rents fell very 
 
 low, particularly in London and m New York. 
 Buildings and building material dropped in price or 
 failed to rise. As wages rose, families began to 
 spread out again and rents and building values rose. 
 But rents and the general price level have to meet 
 before much building is done. When the buildmg 
 begins the supplies of lumber on tne way from the 
 fciest to the home are low, and a rise in price 
 above the general price level is to be expected. 
 
 Land is one of the last things to rise in price. 
 Crop land rose before dairy land, just as crop 
 prices rose before milk prices. 
 
 The effect of weather on prices is well shown by 
 potatoes. The 1916 crop was short because of the 
 weather. In 1917 a great effort was made to 
 increase the acreage. The weather also co-oper- 
 ated. The crop was so great that many farmers 
 sold the crop for little more than they paid for the 
 seed. 
 
 The dollar is no longer a good measure of value 
 (if it ever was a good measure). The best measure 
 of value is purchasing power. Comparison of 
 wages and prices of particular commodities, with 
 the general price level of purchasing power, furnishes 
 a much safer basis for forming conclusions. 
 
 Another factor to be considered when the dollar 
 is so unstable, is uncertainty. Shght changes in 
 price tend to small panics in the industry, and are 
 likely to be followed by equally violent reactions. 
 
 The remaining portion of the paper is given to 
 details of each of thirty farm products for each 
 month since the war began, and to comparisons 
 with the Civil War and the period following the 
 Civil War. 
 
 H 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 17 
 
 How Life Insurance Strengthens Credit 
 
 C. C. Ferguson 
 General Manager Greai-West Life Assurance Co., Winnipeg 
 
 I desire to congratulate most sincerely the men 
 who have been responsible for the Rural Credits 
 Societies of Manitoba . They have already achieved 
 ■ a very great success, and the future contains much 
 promise. This is the result of co-operation directed 
 by intelligent effort. In these days when we hear 
 on all sides, of tarmers' organizations intended for 
 mutual advancement, and even, let it be whispered, 
 for political control, it seems hardly necessary to 
 speak of the value of co-operative effort. But 
 the one great lesson whicn at the present time must 
 be learned by all, is that all must stand together 
 for the improvement of our common conditions, for 
 the development of our country's heritage, and for 
 the payment of our national debt. This duty is 
 incumbent not only upon the farmers, but upon 
 all classes of the community — not that one class 
 may be armed against another, but that each may 
 contribute something to the other, realizing their 
 inter-dependence and their mutuality of interest. 
 It has been established as an axiom that agricul- 
 ture is the basic industry of Canada. Therefore, 
 commercial and financial institutions will pursue 
 a very short-sighted policy if they do not direct 
 their effort wherever possible, to assist the develop- 
 ment of rural prosperity. 
 
 Recognizing this, the banks, I understand, have 
 welcomed the formation of Rural Credits Societies, 
 so that they may be of greater service to the farm- 
 ers. You have done your part in making this 
 co-operation possible by stabilizing the security 
 upon which the banks lend their funds. This is 
 most important. It may be satisfactory for the 
 moment for the individual to obtain his loan upon 
 inferior security, but in the long run the class to 
 which that individual belongs will benefit by 
 furnishing unimpeachable security, so that capital 
 will be encouraged to permanently remain subject 
 to its call. 
 
 I have been asked to speak to you on the subject 
 of "How Life Insurance Strengthens a Farmer's 
 Credit." With your permission, however, I will 
 speak somewhat more generally while attempting 
 to cover this subject in particular. 
 
 LIFE COMPANIES LEND ON MORTGAGE SECURITY 
 
 Life Insurance has adopted, as a slogan, the word 
 "Service" — service, to policyholders and to the 
 community. I feel somewhat jealous of the oppor- 
 tunity which has been placed befcre the banks of 
 being of service to you in connection with these 
 Rural Credits Societies, but, as you are probably 
 aware. Parliament has, in its wisdom, d^awn a 
 distinction between the investments available to 
 banks and to life insurance companies, and it 
 happens that the opportunity of being of service to 
 you in this connection has been reserved by law 
 to the banks. On the other hand, the life com- 
 panies are permitted to serve you in another direc- 
 tion, which is net open to the banks. That is to 
 say, we can make you long term loans on the 
 security of your land by way of mortgage. The 
 importance of this for agricultural development is 
 exceedingly great, and life insui-ance companies 
 have supplied enormous sums to Western fa'-mers 
 on mortgage security. 
 
 There are, naturally, many adjustments which 
 must still be made to secure perfect harmony 
 between all classes in the Dominion, but one very 
 satisfactory condition now exists in Canada which 
 does not obtain everywhere else. I refer to the 
 fact that the farmers of Canada and the loaning 
 corporations deal with one another directly, and 
 without intermediary. We have no loan agents to 
 make the loans at high interest rates, afterwards 
 selling them to the corporations at a fat p'-ofit. 
 
 It is gratifying to be able to say that life msurance 
 companies have found by experience that they can 
 lend to the Western farmer with perfect safety and 
 while at the present moment the hign interest 
 obtainable on bonds makes them a vety att; active 
 investment, there is an undoubted tendency on 
 the part of life companies to turn more and mo-e 
 to the farm mortgage field as an outlet for funds. 
 
 Life insurance companies are established for the 
 purpose of furnishing protection. This is the 
 motive for their existence, and the investment of 
 funds is only a subsidiary function. As fire insur- 
 ance stabilizes and protects business, so life insur- 
 ance stabilizes and protects the home. It impaits 
 a sense of security to married life, and its greatest 
 service is toward the children. Death is no respec- 
 tor of persons, it rarely comes at an opportune 
 time. Nothing can fully compensate for its visita- 
 tions, but life insurance is always the best and 
 frequently the only provision which can be made to 
 mitigate the distress which premature death often 
 brings. I do not wish to ove''-praise my subject. 
 There are greater things than life insurance. Paren- 
 tal love is greater than life insurance, but when 
 parental love becomes practical, it can find no better 
 instrument than life insurance. 
 
 While the benefits of life insurance a^e rriost 
 strikingly illustrated with regard to 'children, the 
 business has a much broader appeal. It provides 
 protection for the family as a whole, and for aged 
 or otherwise dependent persons, and it furnishes 
 protection for the old age of the policy-holder 
 himself. The need fc insurance is thus universal 
 and in brief, it may be said that any person whose 
 life is of value to otheis needs life insurance. This 
 in effect means every one, because it- is difficult to 
 imagine any person so immersed in selfishness that 
 his death would not bring a sense of loss to some 
 individual. 
 
 In 1918 the death claims incurred in Canada wee 
 over twenty-four million dollars. Who can esti- 
 mate the relief which this payment has brought to 
 families dep-ived of the bread-winner? On the 
 other hand, it is interesting to conside' in the alter- 
 native what demands upon the public purse there 
 would have been for allowances to mothers, orphans 
 and dependent parents if the"e had been no such 
 thing as life insurance. Life insurance is therefore 
 of great economic value to the state — a fact which 
 we think is not fully recognized by ouv Legislatures. 
 A life insurance company is essentially an associa- 
 tion of persons for mutual benefit and protection. 
 The premiums paid are themselves virtually taxes, 
 and while certain rebates or returns are made to 
 policyholders; these are not profits in the commer- 
 
18 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 cial sense of the word. It would appear therefore 
 that the funds provided by policyholders for the 
 protection of widows and children should not be 
 subject to taxation, because every dollar paid in 
 taxes means a teduction in the relief so so ely 
 needed by the bereaved. In spite of this we have 
 to complain not only that our policyholders are 
 taxed through us, but that they are taxed excessively 
 in comparison with other Unes of business. When 
 you pay a premium of one hund-'ed dollars your 
 company has to pay two dollais to the Provincial 
 revenues, leaving only ninety-eight dollars with 
 which to furnish protf ction. This is indirect taxa- 
 tion; the direct method would be for the tax col- 
 lector to call with the undertaker and assess the 
 widow or orphan twenty dollars for every thousand 
 dollar policy paid. How long would such a tax be 
 supported by public opinion? So far as shaie- 
 holders are concerned, they should be taxed to the 
 same degree as shareholders of corporations gen- 
 erally, but the financial interests of sh3reholders in 
 life companies is very limited — so limited, indeed, 
 that the taxes now paid by Canadian policyholders 
 are twice as ereat as all the dividends paid to share- 
 holdeis. This criticism is not aimed pa'-ticulai'ly 
 at the Mamtoba Legislature, because the other 
 provinces impose, for the most part, similar taxes. 
 
 FORMING A "ONE-MAN" CONCERN 
 
 Of recent years there has been a great develop- 
 ment in the direction of business insurance. This 
 has arisen because unhappy experiences have shown 
 its necessity. For instance, the manager of a 
 business has developed that business by his special 
 knowledge or ability, so that it has become a pro- 
 nounced success. Sudden death has, however, 
 come, and the business has died with its manager, 
 involving loss, not only to dependents, but also to 
 shareholders, partners and creditors. The modern 
 method of providing fcr this contingency is by 
 insuring the life of the manager in favor of the firm, 
 so that the proceeds of the policy will be available 
 to replace, in some degree, the loss involved in the 
 manager's death. Let us consider how such an 
 insurance is related to the question of credit. No 
 business can be actively conducted to the best 
 advantage without at some time seeking credit. 
 Now, credit can only be obtained by offering security 
 and the security takes many forms. Often the 
 security consists of land or buildings, or of bonds, 
 stocks or goods, but sometimes there is little 
 security available except the character and ability 
 of the borrower. This is a splendid form of security, 
 and it plays an important part in every loan, no 
 matter how well otherwise secured. But for 
 obvious reasons, it can be given very little depen- 
 dence unless supported by adequate hfe insurance. 
 Particularly in the case of "one-man" concerns, 
 which depend upon the energy, ability and enthus- 
 iasm of a single individual, does one find an absolute 
 necessity for life insurance to protect the interests 
 which would otherwise surely suffer in the event 
 of death. For many years business firms have 
 insured their buildings against fire; now they also 
 insure their executives against death. Failure to 
 insure buildings has long been regarded as proof of 
 business inability; failure to insure valuable execu- 
 tives or employees will soon involve similar reproach. 
 
 Of all lines of business, I think the young farmer 
 provides the most noteworthy example of the "one- 
 man" concern. He employs few men to work for 
 
 him. He has no partners except his wife (who, it 
 should be granted, is the best kind of partner), owrf 
 at his death the business must be given up or a reliable 
 man employed to carry it on. It is not easy to find 
 such a man, and in most cases where premature 
 death occurs, the widow and children have to sell 
 out to the first bidder. After paying debts and 
 encumbrances, there is probably httle left for their 
 support, because we are considering the case of a 
 young man who has not had time to lay by a reserve, 
 and even in the case of an older man, there are 
 many chances that he will not have accumulated 
 sufficient to adequately provide for his wife and 
 educate his children. Under these conditions the 
 pillow of the uninsu'-ed man, who realized his posi- 
 tion, would be an uneasy one. This leads me to 
 remark that life insurance is a prime necessity in a 
 well-ordered scheme of hfe. Every man is entitled 
 to what degree of comfort and satisfaction he can 
 obtain from life. The consdentious man cannot 
 derive his full measure of satisfaction, if he feels 
 that his moderate expenditure on his comforts and 
 pleasures will be later on regretted by his depend- 
 ents in their need. On the other hand, the man 
 who carries adequate life insurance can properly 
 expend as much of his income as he deems neces- 
 sary, on the comfort and education of his family 
 and himself. 
 
 The farmer is also a "one-man" concern in the 
 eyes of his banker, and for credit purposes a life 
 insurance policy is of prime importance. The other 
 security may be ample, but the lender has always 
 a lingering doubt as to how he shall be repaid if 
 the borrower dies. To be su.e, he has the recourse 
 of entering judgment and seizing the chattels, but 
 no person or corporation will willingly do that if 
 other recourse remains. Sometimes the lending 
 corporations are represented in the hght of malig- 
 nant monsters, who take a positive delight in 
 foreclosure proceedings and ejected families. This 
 is, of cou "se, absurd. The modem trend is for the 
 lender to so conduct his business that he will, if 
 possible, never have a foreclosure or a judgment. 
 He does not want them, because they do not pay 
 and they are a bad advertisement. The lender 
 will always favor a loan where the chance is remote 
 of paying to adopt harsh measures in collection. 
 The farmer who carries adequate insurance will 
 therefore find favor in the eyes of his banker or 
 Rural Credits Board. This will appeal to farmers 
 as individuals; it should also appeal to them as a 
 class, because, as I intimated before, it is to the 
 farmers' interest as a class to improve their credit 
 in every possible way. There is now a unique 
 opportunity before them. For instance, if the 
 Rural Credits Society in Roblin or Swan River or 
 Minitonas could say to its bankers that every one 
 of its members was insured, what a powerful argu- 
 ment that would be! 
 
 RELIABLE INSURANCE AGENT A BENEFACTOR 
 
 I hardly need to say more in this connection, but 
 will add this warning, that missionary work is 
 necessary. We f nd that very few people take life 
 insurance on their own initiative. They need to 
 have the matter suggested to them, and, in fact, 
 urged upon them. That is why the life insurance 
 agent is employed. His calls are not always wel- 
 comed, and he asks you personal questions. Put- 
 ting it bluntly, his first question is: "How many 
 dollars worth of insurance do you love your family?" 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 19 
 
 In view of what he can accomplish, his work is of 
 national importance, and I bespeak for him your 
 assistance. You can do much by a word in season 
 to your neighbor — more by taking a policy your- 
 self. 
 
 There is undoubtedly at the present time a greater 
 appreciation of life insurance by the public than 
 there ever was before. During 1919 there has 
 been written in Canada probably fifty per cent, 
 more new business than in any previous year. In 
 large part, this is due to the immense service the 
 companies have performed during the war and the 
 epidemic, when claims amounting in some cases 
 to tA'ice the normal were ungrudgingly paid. // is 
 a tribute to the stability of the business that the com- 
 panies have emerged from this severe ordeal without 
 a single failure. In fact, while some companies 
 have been absorbed by stronger ones, there has 
 never been among Canadian companies a real 
 failure so far as policyholders are concerned. The 
 shareholders, I regret to say, have not al'.vays 
 fared so ^^•ell. We have in Canada a good Insur- 
 ance Act, and there is at Ottawa an efficient Insur- 
 ance Department, which subjects the companies to 
 a close inspection, so that you may have every con- 
 fidence in the guarantees of any company licensed 
 by the Dominion. 
 
 I bespeak therefore your interest and co-opera- 
 tion in this tremendous business of insuring the 
 people. If you yourselves carry adequate insur- 
 ance, you will be better satisfied with yourselves, 
 your families will appreciate you more, and your 
 banker will lend you more money. 
 
 POLICIES AS COLLATERAL 
 
 A delegate: "When a man has sufficient to protect 
 his family and is pretty well-to-do, why should he 
 take out an insurance policy?" 
 
 Mr. Ferguson: "I would like 1o point out in the 
 f rst place that, in my opmion, life insurance should 
 have the same appeal to the farmer as to everybody 
 else. A question has been asked regarding the 
 well-to-do individual who has enough to provide 
 for his wife and family after his death. There are 
 so many contingencies that no person can bs 
 absolutely sure of that. We find in all lines of 
 business that estates and ftmds have a habit of 
 disappearing. A thing that is of great value one 
 day may become of no value in a night. Then, 
 again, we find that the very wealthiest people in 
 the community take out insurance policies, and 
 policies for large amounts. The men who have 
 millions insure their lives. One reason is this, 
 that they realize that certain assets may be tied up 
 at the time of death, and that cash in hand at the 
 time of death is worth a great deal more to the 
 family than cash invested in securities that take 
 some time to realize. That should also appeal to 
 the farmer, because he is usually the person whose 
 investments are of such a nature that there may be 
 comparatively little cash available at the time of 
 his death, even although he might have been well 
 off. To such a person I think the argument in 
 favor of having a certain amount of life insurance, 
 in addition to his other resources, no matter how 
 strong those may be, is a very strong one." 
 
 A delegate: "Most farmers who take out insur- 
 ance do it for the sake of protection. I think 
 most of the men who insure do so because they feel 
 the need of it. and feel that their family would not 
 be left in too good a position if death overtook 
 them. The question is: Would it be wise on the 
 part of a man to barter or borrow or use his insur- 
 ance policy for collateral, as the means to secure 
 ready money? Does he, in that case, dissipate or 
 waive his protection? He practically barters the 
 protection that he had secured for his family." 
 
 Mr. Ferguson: "A man should have all the insur- 
 ance necessary for the protection of his wife and 
 children, and the additional insurance which he 
 may take out for the purpose of conserving credit 
 will serve the same purpose, because any debt he 
 has will be paid out of this, and his family will be 
 helped to raise money for other purposes. I don't 
 think there need be any hesitation about using 
 insurance as collateral provided there is adequate 
 insurance. The insurance should be adequate for 
 protection and collateral. The two kinds of insur- 
 ance are distinct, however, it should be remem- 
 bered." 
 
 Mr. Weir: "In actual practice a man is very 
 seldom asked to assign a policy. It is more a 
 protection to help to clean up an estate in the case 
 of death. If the policy were made out to the wife 
 or to certain members of the family, it would be 
 payable to them and not to any one else. If made 
 out to the estate, however, it could be assigned to 
 serve the same uses as collateral. What I want to 
 ask is, what is the best type of insurance policy? 
 In other words, what is the best kind of policy for 
 men who are borrowing money from the bank and 
 require practically all their capital for farm opera- 
 tions, and who, at the same time, want protection? 
 
 Mr. Ferguson: "Mathematically speaking, all 
 the forms of policy are the same. If you take 
 any one at random, you will get your money's 
 worth. The return is mechanically commensurate 
 with the premiums you pay. Let me explain two 
 or three different types of policy. There is the 
 ordinary life policy, on which you pay premiums 
 until death. There is the life policy which is pay- 
 able at death, although you only pay premiums 
 for 20 years. Afte*- that the insurance runs without 
 any payments fi-om you. Then there is the endow- 
 ment policy, payable at the end of, say, 20 years. 
 In addition, there is a form called temporary 
 insurance. You insure yourself for five years, and 
 the premium for this insurance is very low. This 
 temporary insurance is one that does not involve 
 the investment idea at all. If death occurs, the 
 relatives of the insured person collect the claim; 
 if you live out the term of years you don't get your 
 premiums back. All the other kinds of policy 
 involve the investment idea to some extent. For 
 general purposes, I don't think you can beat the 
 20-year payment life poUcy." 
 
 The Chairman: "Is is true in connection with the 
 temporary policy, that you have to be re-examined 
 at the end of the period?" 
 
 Mr. Ferguson: "No, that is not the case. You 
 can get a policy on the temporary plan which 
 would permit renewal without medical re-examina- 
 tion. 'I 
 
20 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 Conference on Interest Rate 
 
 Bank Superintendents Meet Committee of Societies' Directors^Correspon- 
 dence of Central Office with Bankers' Association 
 
 During the convention a committee of four 
 superintendents of Western branches of banks, 
 Messrs. Vere C. Brown, Canadian Bank of Com- 
 merce; F. L. Patton, Dominion Bank; J. K. Munroe, 
 Merchants Bank, and R. Campbell, Royal Bank, 
 met a committee of fourteen directors of Rural 
 Credits Societies to discuss an increase of the 
 interest rate to societies. 
 
 The following shows copies of the correspondence 
 leading up to this conference and the report of che 
 committee of directors. The sessions were held in 
 the Fort Garry Hotel. Obviously, only the report 
 can be published. 
 
 Winnipeg, Manitoba, 
 
 October 16th, 1919. 
 The Secretary, 
 
 The Canadian Bankers Assn., 
 City. 
 Re Convention of Manitoba Rural Credits Societies 
 Dear Sir: — 
 
 The date fixed for this convention of officers and 
 directors is between the 12th and 17th of January 
 next. An attempt is being made to make this 
 gathering one of real interest to agriculturists. We 
 are plarming to bring to this city four or five out- 
 standing Continental leaders on agricultural and 
 related problems. The convention will last three 
 days and we are expecting between four and five 
 hundred delegates. An opportunity will be given 
 for one or more bankers to address the gathering. 
 
 I am suggesting that it would be of interest to 
 the gathering if one of the bankers would speak on 
 the subject "How to Build and Keep One's Credit 
 Sound." I should be glad, however, to know as 
 soon as it is possible the names of those who will 
 speak on behalf of the banks and the subject 
 matter. This department would welcome an 
 attendance of country managers. 
 Yours very truly, 
 
 G. W. Prout. 
 
 Winnipeg, Canada, 
 17th October, 1919. 
 G. W. Prout, Esq., 
 Parliament Buildings, 
 Wirmipeg. 
 
 Dear Sir: — 
 
 I am in receipt of your letter re: 
 Convention of Manitoba Rural Credits Societies. 
 I note that the conference is fixed for 12th to 
 
 17th January next. 
 
 We \vill hold a meeting next week, when I >vill 
 bring your letter before our members. 
 Yours truly, 
 
 W. A. Weir, 
 
 Secretary. 
 
 Winnipeg, Canada, 
 14th January, 1920. 
 The Chairman, 
 
 Rural Credits Societies Convention, 
 Winnipeg. 
 Dear Sir: — 
 
 We have a committee of four, who are appointed 
 to meet a committee of your members. 
 
 I shall be glad if you will select your committee, 
 so that the two bodies can meet and have a talk 
 over matters. 
 
 We will be glad to have you utilize our Board 
 Room — 200 Merchants Bank Building — for the 
 meeting. It is a good sized room, suitably furn- 
 ished for such a meeting, and we will be pleased to 
 welcome your members there. 
 
 Please advise me what day and hour would be 
 convenient. Would 4 p.m. to-day suit? 
 Your truly, 
 
 W. A. Weir, 
 
 Secretary. 
 
 W. E. Crawford: "I would like now to sub- 
 mit the report of the committee appointed to 
 confer with representatives of the Bankers' Associa- 
 tion with respect to changing the rate of interest 
 on loans. The request made by the bankers was 
 that the rate should be 6I/2 per cent. At the present 
 time they receive 6 per cent. Your committee's 
 report, after listening to the bankers for two hours 
 and then carefully considering the matter, is as 
 follows: 
 
 "We your committee beg to report that, as 
 directed, we met a delegation from the Bankers' 
 Association, and after hearing their views on 
 the matter of interest rate as now provided for 
 in the Act, and after careful and due considera- 
 tion of the matter from all angles, have come 
 to the conclusion that we are unable at this 
 time to recommend any change in the Act in 
 regard to the said rate of interest. 
 "Signed on behalf of the committee." 
 
 The report was received with loud applause. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 21 
 
 Delegates Banquetted at Fort Garry Hotel 
 
 Premier Norris' Address — Excellent Toast List 
 
 On Wednesday evening the delegates and their 
 wives were the guests of the Government at a ban- 
 quet held in the Fort Garry Hotel. The Lieutenant- 
 Governor, Sir James Aikins, presided, and among 
 those present were Premier T. C. Norris, Hon. 
 Edward Brown, Professor G. F. Warren, Cornell 
 University; Vere C. Brown, Superintendent of the 
 Canadian Bank of Commerce; F. L. Patton, Super- 
 intendent of the Dominion Bank; Robert Campbell, 
 Superintendent of the Royal Bank; W. L. Parrish, 
 M.L.A. ; R. N. Lowery, M.L.A. ; George W. Prout, 
 M.L.A.; W. B. Finlater, M.L.A.; A. J. Lobb, 
 M.L.A.; E. A. August, M.L.A., and C. C. Ferguson, 
 General Manager of the Great-West Life Assurance 
 Company. A well-served dinner was followed by 
 a live and varied toast list. 
 
 "The King" was proposed by the Lieutenant- 
 Governor. 
 
 Thereafter, Sir James Aikins delivered a delight- 
 ful address, in the course of which he caused much 
 merrim.ent with witty and humorous remarks and 
 anecdotes. Towards the close he made an impres- 
 sive appeal for a united effort to make Canada the 
 truly great country its immense resources could 
 make it become. "No nation can make progress," 
 he said, "by allowing itself to be split into classes, 
 mutually exclusive, and seeking their own interest. 
 Canada cannot afford to be governed even by a 
 body of farmers as a class — re.x ember, I am speak- 
 ing as a class — or by a body of capitalists or any 
 other class. The Government must be represen- 
 tative of all classes, and the one and only interest 
 must be the old interest: 'Each for all, and all for 
 each.' Let all classes stand shoulder to shoulder, 
 ^n that way, and in no other, will Canada advance. 
 Ihe basis of Canada's success must lie in the moral 
 fibre and good character of its population." 
 
 Vere C. Brown proposed "The Delegates." He 
 said : "I happened to be. one of the four or five poor 
 bankers uho ventured into the auditorium of this 
 hotel to meet a committee of yours, consisting of 
 about twelve or fourteen gentlemen. I suppose 
 that the organizer of these proceedings realized 
 that I ought to learn enough about the calibre of 
 the directors of these Rural Credits Societies as to 
 be able to xlo justice to this toast. I tell you that 
 from that standpoint I ought to be able to do justice 
 to the toast, but I am afraid that you consider that 
 our forte is not argument in debate around the 
 table, and that we are more at home doing what 
 is our daily occupation, occupying arm chairs in 
 large offices, just signing letters refusing credits for 
 the poor, struggling farmers. Your representatives 
 treated us very considerately, having regard to all 
 the circumstances, so much so that when I came 
 out of the room this afternoon I felt that I ought 
 to have been a little more candid than I had been. 
 I tried to tell them a lot about banks and their 
 business. There were some things that I did not 
 tell them. If you will give me just a minute or 
 two I shall repair the omission. This was written 
 by a newspaper man in mid-Saskatchewan, and he 
 published it, and that is how I come to know the 
 rest of the story: 
 
 ABOUT BANKS 
 
 'A bank is an upright, angular building, 
 entirely surrounded by restrictions. The en- 
 trances are restricted to one. You are restricted 
 from spitting on the floor. The floor is of 
 marble in the city and of lumber in the villages, 
 and is the one thing that is on the level. It 
 is a place where money is bought, sold, or 
 stored — mostly stored. The principal person 
 in a bank is the manager. The manager is a 
 figure-head — a figure-head is a wooden image. 
 The second principal person is the teller. He 
 will be a manager if the directors can get wood 
 enough and can fashion it to suit themselves. 
 The next is the ledger clerk; when he gets 
 toned down a little he will be a teller. Away 
 down on the list is the caretaker; he possesses 
 the bank's common-sense, and does the main 
 work. Money is willingly accepted from 
 depositors and reluctantly given to borrowers. 
 The amount you can borrow is in proportion 
 to the brains possessed by the manager — in 
 some banks you can't borrow five cents. 
 Cheques are used to draw money. When you 
 wish to borrow money, then again, a check is 
 used. A bank allows you three per cent, on 
 your deposit if you will put it in its savings 
 account, and charge you 10 per cent, if you 
 make a loan. The seven per cent, difference 
 is called high finance. Banks are known by 
 their initials. B. O. M. stands for Bags of 
 Money, C. B. O. C. stands for Cash, Bonds or 
 Credit. Credit is the amount of money a bank 
 will lend you.' 
 "I hope that some of you will feel that that is 
 perhaps a little exaggerated. Ladies and gentle- 
 men, the bankers of this Western country are in 
 cordial sympathy with the Rural Credits Society 
 movement. Make no mistake about that. Some 
 of us were on record before ever this movement 
 was started by the Government of Manitoba as 
 urging the farmers to form Rural Credit Societies. 
 There are some points on which the bankers would 
 have liked to see the foundation of the societies a 
 little different. Some of us would have preferred 
 that the Rural Credits Societies shDuId be organized 
 by the farmers themselves and managed by the 
 farmers themselves, without Government aid, and 
 without rural municipal aid. The Government 
 has inaugurated the societies on a different basis, 
 and all we have to do is to lend all the help we can. 
 There is another point of difference between the 
 Government and ourselves. It is from one view- 
 point a small difference, but from another it is a 
 serious one. It is a point on which we have got to 
 reach a compromise, because the banks and the 
 Rural Credits Societies have got to co-operate. It 
 is unthinkable that they should not co-operate and 
 go along most cordially. I should like to add, in 
 proposing this toast, that after I came out of the 
 room this afternoon, it came to me from several 
 side-lights that I got from the conference, that the 
 work that has been performed" by the directors of the 
 Rural CreditsSocietiesrepresentsabout thj finest kind 
 of public service that is to be found anywhere in 
 
22 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 this or any other country. If they needed it, it 
 ought to be an inspiration to our representatives, 
 the managers of the country branches throughout 
 the country, but I hope you will be able to agree 
 with me that great inspiration is not needed there, 
 and that the banks are showing every disposition 
 to give you all the support and all the co-operation 
 that you could possibly need or expect." 
 
 John Arnott: "I would like to say on behalf of 
 the delegates that we have enjoyed very much this 
 opportunity of coming to Winnipeg and getting 
 together, not only with ourselves as directors, but 
 with the people of Winnipeg. I am sure we are 
 all agreed that we should get together and work 
 together for a better Canada. I know that the 
 work we are doing as directors of the Rural Credits 
 Societies must automatically make us better citizens 
 than we were before." 
 
 R. A. Knight, Hargrave: "I am sure you will all 
 agree that this has been a splendid convention. 
 The large number that have attended shows what 
 a splendid spirit there is abroad among the Rural 
 Credits Societies. The directors are men who have 
 been devoting much of their time to trying to get 
 better conditions for their neighbors and fellow 
 farmers. That, I take it, is the fundamental 
 principle of the Rural Credit Societies. That is 
 what we are working for, and I think we are all 
 agreed that that is what we are in the world for." 
 
 Hon. Edward Brown proposed "The Ladies." 
 He said: "I regret that the ladies in the city don't 
 get more opportunities to visit the ladies in the 
 country. It is quite natural for the ladies in the 
 country to drift into the city, but I think our city 
 Ufe would be tremendously improved if more of 
 our women could get out into the country occasion- 
 ally to visit the farmers' wives out there." 
 
 C. C. Ferguson responded, saying: "I feel very 
 much out of place to-night in replying to this toast. 
 I feel so because I realize that the day is long past 
 when the ladies required any person except one of 
 their own sex to speak for them. There has always 
 been a tradition that the ladies can talk all right 
 but could not speak. That is a tradition that 
 should go by the board, because it is contrary to 
 the facts in this up-to-date country of ours." 
 
 E. A. Weir proposed "The Press," saying: "There 
 has been no single factor in the growth of the Rural 
 Credits Societies in this province which has helped 
 us so much as the support given to us by the press. 
 From the day that the societies were proposed to 
 the present time, we have had the whole-hearted 
 support of the press in city and country." 
 
 J. H. McCuUoch, the Farmer's Advocate, in 
 responding, said: "I am sure that I can safely say 
 it has been a pleasure for the press of Manitoba 
 to give their support to the Rural Credits idea. 
 From the outset the agricultural press, at least, has 
 been only too pleased to do all it could to further 
 the movement." 
 
 ILLUMINATED ADDRESS TO 
 G. W. PROUT 
 
 During Banquet Delegates Show Appreciation 
 of Mr. Prout's Work 
 
 During the banquet on Wednesday evening of the 
 convention, Mr. Prout was presented with a beauti- 
 fully illuminated framed address. Mr. John Arnott 
 made the presentation on behalf of the delegates. 
 
 Mr. Arnott: "Speaking for the delegates of th- 
 Rural Credits Societies, I would like to say thit 
 we here in convention assembled thought that 
 this would be a first-class opportunity of telling the 
 founder of the Act, to the full extent that th? 
 English language will allow, just what we think of 
 him. I would call on Mr. Prout to stand up while 
 we tell him as nearly as the Enghsh language will 
 permit, what we think of him as the founder of 
 this Act." 
 
 Mr. Arnott then read the address, which was in 
 the following terms: 
 
 "To George W. Prout, M.L.A. 
 
 "In response to the insistent demand for a 
 more elastic rural credit system in Manitoba, 
 and inspired with the true spirit of public 
 service, you, after many years of thoughtful 
 study of credit problems, have evolved the 
 Manitoba Rural Credits Societies system. 
 
 "We appreciate that this accomplishment 
 .has meant great personal sacrifice to you. 
 
 "The Rural Credits Act passed in March, 
 1917, and its offspring, the Rural Credits Socie- 
 ties of Manitoba, are the product of your 
 genius and undaunted industry. The first 
 society was formed in St. Andrew's Municipal- 
 ity in 1917, and at the close of 1919 sixty 
 societies existed. During 1919 credits aggre- 
 gating $1,051,000 were granted. The forma- 
 tion of these societies marks the first aggressive 
 attempt to solve the short term rural credit 
 problem in Western Canada. Although still 
 in their infancy, the societies have brought 
 thousands of acres of new land under cultiva- 
 tion; they have increased the numbers of Live 
 stock on hundreds of farms; they have given 
 farmers a new conception of farm finance, and 
 they have added immensely to the warmth of 
 community spirit in rural Manitoba. The 
 societies have humanized agricultural credit in 
 Manitoba. 
 
 "On behalf of the members of these societies, 
 we, the directors assembled at our first conven- 
 tion, gladly grasp the opportunity of paying 
 tribute to the truly wonderful work that you 
 have accomplished for the farmers of Manitoba 
 by presenting to you this illuminated address. 
 Service to your province, not to one section of 
 it, has clearly been your motto. You have 
 accomplished much; may the sphere of your 
 activities ever widen. 
 
 "Signed on behalf of the directors of Rural 
 Credits Societies of Manitoba: 
 
 "W. E. Crawford John Arnott 
 
 "Roy PhiUips D. H. Payne 
 
 "J. E. Eastabrook John Sharpe 
 
 MR. PROUT'S REPLY 
 
 Mr. Prout, in accepting the address amid hearty 
 applause, said: "Directors and Officers of the Mani- 
 toba Rural Credits Societies, all I have done v\fs 
 just to interpret what the people of Manitoba, 
 and the people of Western Canada, had been asking 
 for for years. That is all I have done. I assisted 
 in getting that placed on the statute books of the 
 province, and I just had enough common-sense to 
 know that the men and women of this province are 
 right at heart, that they have always been anxious 
 for the opportunity to serve their brothers and 
 sisters, and especially those who needed assistance. 
 I have alivays known that the men and women of 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 23 
 
 Manitoba wanted to serve their brothers and 
 sisters, and I have always Itnown that one only 
 needed to touch the button, and touch it right to 
 get the people working. This assembly of directors 
 and officers of the Manitoba Rural Credits Societies 
 shows that I was right in judging the great heart 
 and the great soul of this great people. I love 
 
 you, directors and officers. I love you all. I love 
 my province. I Icve Canada. God bless you." 
 
 Sir James Aikins: "The history of all national 
 achievement is the history of hard work. What 
 Canada needs has been expressed, and is being 
 expressed by the directors of the Rural Credits. 
 That is, public spirit translated into public service." 
 
 The Province of Manitoba 
 
 Address by Premier Norris 
 
 Premier Norris said: "This is a unique occasion. 
 I am addressing a large audience, consisting of repre- 
 sentatives from all over this province, gathered to- 
 gether to converse with one another on a question, 
 not a new questionhere, but one thatisbeingdeveloped 
 in a practical, common-sense manner by men and 
 women who are working not only for the benefit of 
 themselves, but for the benefit of the community 
 in which they live. The Rural Credits Act has 
 worked out very satisfactorily, because of the 
 co-operation of the people and the business men. 
 We have witness to-night by Mr. Brown that the 
 banks are in full sympathy with the movement, 
 and are co-operating in it. Without the co-opera- 
 tion of the banks, you could not have made the 
 business the ■ success you have. Your success is 
 evidenced by your attendance here. Think of this 
 great audience. No person working for a salary. 
 That is the best kind of service that can be rendered. 
 Co-operation means success. 
 
 "This is an eventful year in the history of Mani- 
 toba. There never has been a time in the history 
 of the province or Canada when leadership was 
 more important than at the present moment. I 
 think that the province of Manitoba is leading in 
 many matters of importance. Let me be permitted 
 to draw your attention to two or three things that 
 are of interest. On the 15th of July of this year 
 the Province of Manitoba will be fifty years old. 
 This is the fiftieth anniversary of the province 
 becoming a sister province in the Confederation of 
 Canada. You who have been here for that time, 
 just think for a few moments of all that has hap- 
 pened in that half century. What was Manitoba 
 like fifty years ago? What it is to-day? Fifty 
 years ago the province was practically unsettled. 
 There are now 650,000 people in it. Cities have 
 grown up, railways have been built and develop- 
 ment has proceeded steadily. Think of the trans- 
 fo-mation that has taken place in half a century. 
 Look ahead. Look at what is likely to take place 
 in the future. There is as much chance for further 
 development as there has been. Several anniver- 
 saries take place this yeir that are vorthy of notice. 
 Whit I belie/e is the oldest tradin? company 
 in the world has its headquarters in the city. 
 
 T»vo hundred years ago Charles the Second signed 
 the charter for this company, and it is still carry- 
 ing on its trading operations. There is another 
 anniversary. It is just one hundred years ago since 
 Lord Selkirk died. Lord Selkirk brought the first 
 settlers from the North of Scotland to settle on 
 this land, and we have yet in this city many of the 
 descendants of those splendid settlers. He laid 
 the foundation of the settlement of the different 
 parts of this Western country. He made wonderful 
 calculations; he had wonderful confidence in what 
 would happen. This year is interesting because of 
 the memories of the past and because of the respon- 
 sibilities and possibili ies of the present. It is 
 equally interestiuEC because of the prosoec's of 
 the province. The responsibilities and duties 
 of the present must be borne in upon us. 
 It is most interesting because of that. The 
 last few years of the half century were marked 
 by a terrible war, in which Canada played a splendid 
 part. We are glad to know that before the fiftieth 
 anniversary came peace was declared and the 
 victory won. Canadian soldiers distinguished them- 
 selves. They did so much for Canada that they 
 put Canada in a position among the nations of the 
 world that she never held before. We are starting 
 anew with the second half century of the province's 
 history. As I have said, leadership is necessary if 
 we are going to succeed. This splendid audience 
 indicates that the province of Manitoba is leading 
 in the practical demonstration of the value of 
 co-operation. There are 400 or 500 people here, 
 all co-operating, all pulling in the same direction 
 and assisting one another. It can be truly said of 
 Manitoba that in regard to Rural Credits she stands 
 in the front line. Inquiries are coming from all 
 over with regard to our system of rural credits. 
 They are coming; from Australia and New Zealand, 
 from most of the states in the United States, and 
 from the Eastern Canadian provinces. They are 
 asking; for copies of the Act, and for information as 
 to our experiences. Everything goes to sho v that 
 this move.nent is goin^ to be a success. That is 
 leadership in the highest sense of the word." 
 
 The proceedings closed with the singing of the 
 National Anthem. 
 
24 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 What the Rural Credits Act Has Accomplished 
 
 in Manitoba 
 
 Bv Secretaries and Directors 
 
 Mr. E. A. Weir (in the Chair); 
 
 "Rural Ciredits Societies are operating in the 
 province under widely varying conditions at the 
 present time, and it will be interesting to you to 
 hear how other societies have been operating under 
 totally diflferent conditions from your own. 
 
 "I will call first on one of the pioneers in this 
 movement, who, organizing a society in 1918, has 
 carried on the w'ork ever since very efficiently, has 
 been one of the most efficient secretaries in the 
 province, and whose society is at present in a flour- 
 ishing condition. I refer to Mr. D. H. Payne, 
 Secretary of the Lawrence Rural Credits Society, in 
 Lawrence Municipality, east of Lake Dauphin, 
 28 miles from Ste. Rose and 60 miles from Dauphin. 
 There are in Mr. Payne's district as yet no rail- 
 roads, villages, nor banks." 
 
 RURAL CREDITS IN A HOMESTEAD AREA 
 
 D. H. Payne: 
 
 "I had the pleasure of being able to organize 
 practically one of the first — I think it was the first 
 — Rural Credits Societies in a purely homestead 
 district. I am also secretary-treasurer of the 
 municipality, and am in a position to know the 
 good that the Lawrence society has done to the 
 homesteaders of that locality. 
 
 "At our first meeting we had -59 members who 
 signed the petition of incorporation. Last year 
 our applications for membership had become so 
 large that it was thought better, because we have 
 so large a municipality, to organize another society 
 at Magnet. 
 
 "Before the Lawrence Rural Credits Society was 
 started, the homesteaders had to seek work else- 
 where in order to get ready money, leaving their 
 wives and families to struggle along while they 
 were away. The result was, that they got no 
 breaking done, and at the end of the year were in 
 the same position as when they started. I believe 
 I am stating a fact when I say that the Bankers' 
 Association thought it was impossible to run a 
 Rural Credits Society at such a very large distance 
 from a banking centre. We did our banking 
 business in Dauphin, with great satisfaction, 
 although we did a purely mail order business. Our 
 bank manager, as I can vouch for, does not know 
 ten of our members, and I do not think three men 
 in the municipality had ever borrowed money from 
 the bank in Dauphin. 
 
 "The Rural Credits Society, since it started, has 
 given a service to the homesteader that has 
 enabled him to stay on his land. We have laid 
 doAn the rule that when a man has an advance for 
 breaking, he has to show a certificate from one of 
 the directors, showing that he has a certain number 
 of acres broken. An advance is then made to him 
 by way of note, and the banker sends him back 
 the value of the note, without anything off for 
 postage or insurance. The directors go to a lot of 
 trouble to inspect and measure the land. They 
 have to be careful and accurate in measurement, 
 because an acre of land in the bush, after you have 
 
 got it cleared up, looks usually a lot bigger than it 
 really is. The loan for breaking is always granted 
 upon the understanding that the note will be 
 renewed and not paid for until the crop is taken off 
 the land, or presumably the next year. From this, 
 you can see that the Rural Credits Society has 
 practically been the making of that territory. 
 
 "Some of the farmers in that country were turned 
 down by the Manitoba Farm Loans Association 
 because they were too far from the railroad, but 
 the Rural Credits Society never turned them down. 
 Finally, as I say, the membership was getting so 
 large that, just before Christmas, I organized 
 another society on the eastern side of the munici- 
 pality. At the time of its organization, there were 
 18 members waiting to be transferred from the 
 Lawrence society. The first Tuesday in the month 
 they had a meeting of the united directors and agreed 
 upon the line of territory in which the two societies 
 should operate. At that meeting I brought the 
 Lawrence Rural Credits Society up to the full 
 strength of 102 members. Besides these there were 
 nearly 70 members in the Magnet society. So you 
 can see how the movement has grown. 
 
 "The problems there would not interest you, 
 because a man buys a homestead with the last $10 
 bill he has got. The biggest loan we have loaned 
 out in that country was $1500, which was advanced 
 to a man to buy a threshing outfit. That was 
 done because the threshing outfit is practically a 
 community outfit; previously they had to wait for 
 an outfit to come in from outside. You can see 
 the benefit derived from having the outfit right on 
 the spot is very large. The average size of our 
 loans in 1918 was $205.00, and in 1919 they aver- 
 aged $295.00. 
 
 "In spite of the fatality among horses and cattle, 
 our loans made for the purchase of stock are being 
 paid. We are not carrying 50 per cent, of our loans, 
 and the greater part of those we are carrying are 
 for breaking. The problem of the homesteader has 
 been practically solved in that municipahty by 
 the Rural Credits Society. I would suggest to all 
 directors and secretaries here that it is the sympathy 
 which the borrower wants more than anything. 
 He wants to be able to come in and ask for a loan ' 
 without feeling that you are going to bite his head 
 off. You cannot lay down a line of credit, or 
 divide your line of credit amongst your members. 
 You have to take every case individually, upon its 
 merits. Some men might be a better risk than 
 other men because of character. A man's industry 
 is better than a sheet showing a good balance in 
 assets. 
 
 "In the case of our society, we had too big a 
 territory to cover, and could not give quite so much 
 attention as we ought to have done, where a little 
 more help would have put them in a better position. 
 We try to do business as quickly as we can. We 
 always make a start at 10 o'clock in the morning, 
 and, on one occasion, it was half-past one before 
 the directors got away." 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 25 
 
 IN THE ELKHORN DISTRICT 
 
 W. E. Crawford (Secretary Elkhorn Rural Credits 
 Society): 
 "I think Mr. Weir made a remark which was 
 quite right when he said conditions varied greatly 
 in different municipalities. Listening to Mr. Payne, 
 it is hard to realize how it feels forty miles distant 
 from a railroad. But, though ours is an old settled 
 district, the banking accommodation did not seem to 
 be at all what was to be desired. I do not know 
 whose fault that is. At any rate, prior to the 
 organization of our society, we had felt for some 
 time that something of the kind would be a consid- 
 erable advantage. Personally, I had studied quite 
 a little in regard to the matter, without saying any- 
 thing to anybody. The subject was introduced at 
 a meeting last winter by Mr. Knight, of Hargrave, 
 who asked that a committee, of which I happened 
 to be one of the members, take up the matter. We 
 went to work to organize in a hurry, thinking we 
 were going to break all records, but I went down 
 with the 'flu' and others got sick or could not 
 attend for various reasons, and it was the 21st of 
 April before we held our first meeting. The second 
 meeting was held on April 30th. We have passed 
 credits aggregating $95,000.00 since the date of 
 our organization. We had 90 per cent, of our last 
 summer's business paid up this fall. Another five 
 per cent, would have been paid up if we had re- 
 quested the borrowers to do it. 
 
 "There is practically nothing "loaned in our 
 district for breaking. A little was applied for, but 
 the money was never taken. A large amount, 
 however, has been loaned for stock. Four or five 
 of our farmers bought a carload in Winnipeg. 
 
 "Our district has not had good crops since 1915. 
 We have had just existing crops, and are simply 
 getting along from one year to the next. One of 
 ths biggest items we have granted loans for has 
 been to pay up the bank. A large number of the 
 borrowers have had loans from the bank, and come 
 to us to get a better rate and a longer period for 
 repayment. We have tried to educate our borrowers 
 to do all their business with us, and pay cash. One 
 point I want especially to mention in connection 
 with this education of our borrowers. We have 
 sone that are a little indifferent, some that would 
 rather go to jail than go to a bank manager and 
 ask for a loan, but who are gradually coming into 
 our society. We have got to try and educate these 
 men, and help them with their finances. 
 
 "One question I introduced at our last Board 
 meeting. I happened to meet one of our borrowers 
 who was, at the moment I met him, paying a man 
 to fill out his income tax papers. I discovered 
 later that quite a few were doing that very same 
 thing. So I took it up with the Board, and said: 
 'Would it not gain a little more confidence with 
 borrowers and increase their good-feeling for us, if 
 we were to let them know that'we are willing to 
 assist them in matters like this, and that the 
 services of the secretary of the society are at their 
 disposal for help of this kind whenever they re- 
 quire it? It will probably entail a little more work, 
 but it will be well repaid.' 
 
 "Another thing I have found that occurs fre- 
 quently is that there is a slight tendency among 
 borrowers to forget certain items when making 
 their statements. Once I accidentally discovered 
 that a certain borrower had a discrepancy in his 
 statement amounting to close on $1300.00! I 
 
 found on taking it up with the man that it was 
 not dishonesty, but was purely ignorance on his 
 part. He did not mean such a thing, and thought 
 he was doing the right thing when accidentally he 
 was doing wrong. We have discovered in two or 
 three instances that the borrower wants to be edu- 
 cated — educated, among other things, to give us a 
 little more of his confidence. 
 
 "The borrowers need education. We are trying 
 to get them to come to the Board and confide in us, 
 and discuss their business with us. We can then 
 do business mutually in a much better way. One 
 man complained that the testimonials in a certain 
 circular that has been sent out, referred to very 
 small loans. He said : 'Are there very many loans 
 made of that size? A loan that small would be no 
 good to me.' Well, I had to explain to this man 
 that there was no limit to the size of the loan, as 
 long as the man's character and the necessary 
 financial backing were there. 
 
 "I am not saying anything in any way against 
 the bank. Our bank has served us splendidly. 
 Our manager and I get along splendidly. But we 
 find that the society has been a very great help in 
 our district, and I think this is going to continue. 
 Since October 16th, we have granted loans totalling 
 $62,575.00. Our district was pretty early this year. 
 Personally, I had returns from my own wheat in 
 August. The Elkhorn society has granted a large 
 amount of money for fall work. It appears as 
 renewals, but is really money granted for next 
 year." 
 
 REMAKING A COMMUNITY 
 
 Roy Phillips {Secretary Fannystelk Rural Credits 
 Society): 
 
 "I come from a district about the same as Mr. 
 Crawford's— that is to say, an old settled district, 
 where conditions are almost identical in every way. 
 He spoke of having a partial crop failure. We did 
 not have a failure at all, and it did not affect our 
 crops in any way. We had a rather s.-nall crop in 
 places, but in general our returns were good. 
 
 "Farnystelle is south-west of Winnipeg about 
 35 miles.' It is not a very big place, but we are 
 going to make it bigger and better. Two or three 
 years ago, I would have considered it a very unde- 
 sirable community to live in. It was dead. But 
 since that time there have been two principal 
 things that have made me change my mind. One 
 is the Manitoba Rural Creidits Society, and the 
 other, the United Farmers of Manitoba. 
 
 "Previous to that time, two years ago, there was 
 no local society of any kind, no Rural Credits 
 Society, nor any local of the United Farmers. We 
 were simply dry-rotting. But since that day, a lot 
 of the people who live there have had a change of 
 heart. We decided that, instead of knocking the 
 place we lived in, it was better to try and improve 
 it. After all, a community directly reflects the 
 people who live in it; and any place that attracts 
 attention, favorable or unfavorable, does so because 
 of the action of the people who live there. 
 
 "Our society has not done a great lot of business. 
 Mr. Crawford has spoken of $60,000.00 for next 
 year. We have done very little for next year. 
 Organizing our Rural Credits Society was an easy 
 matter. I looked after the work, and got co-opera- 
 tion from everybody. Our Rural Council was not 
 a stumbling block, but an aid to us. We had our 
 membership up to 40 or 50, but were not in a posi- 
 
26 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 tion to submit the matter to the Council at the 
 time I attended the first council meeting. But 
 the Council was good enough to grant us a special 
 meeting in the week following, as at that time I 
 was certain I would be ready. We had their very 
 heartiest co-operation, and they went to the trouble 
 of having a special meeting to talk Rural Credits 
 Society business. 
 
 "Our credits granted last year totalled about 
 $30,000.00. Our business was successful to the 
 extent that this was all paid back, except about 
 eight per cent. We did not run across any 
 specific cases, in operating our society, that would 
 probably help or interest anybody else. We had 
 no difficulties, although we have never really been 
 tested. 
 
 "In going about the organization of the society 
 and explaining it to prospective shareholders, the 
 proposition appealed to me in this way: Loans 
 granted in the community surrounding our Uttle 
 town would be of benefit to the community. The 
 money would be spent for productive purposes, and 
 returns would go through the bank in our own 
 locality. 
 
 "When I was starting the society, I would, being 
 personally acquainted with those I was canvassing, 
 take my own package of shares along with me, and 
 show them to prospective shareholders, and ask 
 them to subscribe. They always did so, largely 
 from the personal attitude — 'Seeing it's you, I will 
 take a share.' Almost all of our shareholders 
 became borrowers. 
 
 "We had, I may say, one interesting case. A 
 man came to our society with an apphcation for a 
 $2000.00 loan. He was not in good shape, was 
 just a fair manager, and had his farm on the half- 
 crop payment system. The best he could do was 
 none too good. It was the opinion of the directors 
 that $1000.00 was plenty for that man. I gave 
 him a revised application, and told him what we 
 were compelled to do. He said $1000.00 would be 
 no good to him, and said he could raise $1,500.00 
 ft'om the bank. He went away and came back in 
 about two hours. He had all my sympathy as he 
 laid down his papers and said he guessed he would 
 have to take the $1000.00. The banker told me 
 afterwards that he had not been able to see his way 
 clear to let that man have any money. Well, this 
 borrower was practically the very first man to pay 
 back his loan in full this fall. After he had done 
 that, I was negotiating with him personally to 
 buy his farm; and in the course of our conversation, 
 he said, T have not money enough to pay the rent, 
 and do not know what I am going to do.' I said, 
 'How came you to find the money to pay us back, 
 then?' He said, 'Well, next year I have got to 
 have more money. The Rural Credits Society is 
 my best friend, and I have got to treat it accord- 
 ingly.' 
 
 "I know of four or five men in similarly hard 
 circumstances, who have paid the Rural Credits 
 Society the very first money that went out. They 
 are the men who depend upon the Rural Credits 
 Society more than anybody else. In times gone 
 by, before prices were good, many men were in hard 
 circumstances. Occasions came when they needed 
 money very badly. Their abihty might have been 
 very good, their character of the best, but their 
 capital was so small that they could not branch out. 
 I might cite an instance of a young man who had 
 been struggling along for a number of years, trying 
 
 to make some kind of a start. He did not have 
 any special hard luck, but his capital was so small 
 that he could not get a start. He had been to the 
 bank a number of times and practically could not 
 get anything. He was working under a special 
 disadvantage, being a bachelor! Well, two or 
 three years ago, this man had a good crop. He 
 got 1300 bushels of wheat and paid off every dollar 
 he owed. His success got to be known by the 
 neighbors, and the banker from whom he had 
 formerly tried to get money heard about it. One 
 day, as he was passing down the street, the banker 
 rushed out, shook him by the hand, told him how 
 glad he was to see him, and incidentally before he 
 left the man, told him if he needed anything, to be 
 sure and call at the bank. Ever since then he has 
 been gciag along in very good shape. 
 
 "Another instance I will give you. A man came 
 and applied for a loan. There was little against 
 him, except that those who knew him, said if he 
 ever took a notion to move, nothing would hold him. 
 We did not pass his loan. One day, a httle later, 
 that man drove into town, tied up his team, and 
 disappeared. I guess nobody knows where he is 
 now. 
 
 "I cannot emphasize too strongly the value of 
 sound financial advice — letting a man have money 
 and advising him how to spend it to get the most 
 out of it. The good feeling that exists between 
 our shareholders and our Board of Directors arises 
 out of that feeling of confidence and independence 
 which comes to a man when he is able to go to the 
 bank, lay down his note before the teller and have 
 him hand out the money. It is a mark of indepen- 
 dence which everybody appreciates." 
 
 Mr. Weir: 
 
 "A large part of the success of the Fannystelle 
 Rural Credits Society is due to Mr. Phillips. He 
 organized the society after hearing Mr. Prout speak 
 at a Grain Growers' meeting. We have enlisted 
 the services of Mr. Phillips, temporarily, to do some 
 organizing work in other parts of the province. 
 
 IN THE DROUGHT AREA 
 
 Mr. Hibberl (Secretary Waskada Rural Credits 
 Society): 
 "I asked the premier last night why he never 
 mentioned Waskada. He said, 'It's coming, it's 
 coming.' They have not had a crop there since 
 1912, the old-timers say. I have been in the coun- 
 try five years, and have yet to see a twenty-bushel 
 crop. This year the average crop in that country 
 is from four to six bushels per acre of wheat. The 
 grasshoppers were so bad we did not get any barley 
 or oats at all. Conditions have been exceptional, 
 and if our society has had any measure of success, 
 it is due to the way the directors have handled it. 
 They have put themselves out in a number of ways, 
 trying to get these loans met, and telling borrowers 
 if they met their loans properly, they would get 
 loans to meet the feed situation next year. Out 
 of 21 loans, for approximately $12000.00, 18 have 
 been paid up in full; one paid $200.00, leaving a 
 balance of $300.00, and had the balance renewed; 
 another paid $300.00 on account; the remaining 
 borrower did not seem to think it mattered very 
 much whether he paid or not, so we had to have an 
 interview with him, and he has promised to pay 
 50 per cent, and have the balance renewed until 
 next year. So we consider we have not done 
 badly. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 27 
 
 "We unfortunately started organizing in t,vo 
 municipalities. Don't do this, is my advice. Mr. 
 Weir had to help us out at the final meeting, and, 
 after overcoming a mass of opposition, we got 
 through and got organized. 
 
 "From October 18th to date, 13 new loans have 
 been approved, amounting to $10,150.00. Now, 
 the Act only calls for three meetings, but the Board 
 have put themselves out in an unusual way to meet 
 borrowers. 
 
 "I want to say how I have appreciated the way 
 these directors have put themselves out to get to 
 these meetings. Some of these men have had to 
 leave their chores, drive into town and sit until very 
 late, and even then get some hard knocks from the 
 borrowers. I do not think the borrowers have 
 appreciated the work of these directors to the 
 extent they should have. The way that, without 
 any remuneration, they have attended these meet- 
 ings to consider loans, has been praiseworthy 
 beyond expression. 
 
 "Now, I believe the society has not only helped 
 actual borrowers in our district, but has helped 
 members of the community who were non-borrowers. 
 They have been able to get better terms from the 
 bank than ever before. We have in the past got a 
 tea slaps from the bank manager, but we have got 
 a man in there at present who is giving us every 
 possible assistance. The present manager of the 
 Union Bank beUeves our society is a good thing for 
 the community, and is prepared to give us every 
 possible help. 
 
 "Another thing I would like to refer to is the 
 dates of the meetings. I do not think it is fair that 
 the directors should be expected ' to attend too 
 many meetings in one loaning season. There 
 should be fixed dates. Usually, we have just got 
 a batch of loans through, when somebody wants 
 to know when the next meeting will be held. 
 
 "Still another thing: Borrowers have got to be 
 educated to the fact that the Rural Credits Society 
 is not a philanthropic body. Some of them have 
 got the idea that because they are shareholders 
 they are entitled to borrow as much as they like. 
 One man wrote us, 'As I have paid my $10 to the 
 Rural Credits Society, I want to borrow $600.00 
 for seed wheat. Bring this up at your next meet- 
 ing.' He did not think he had to make out any 
 statement of his affairs at all. Another applicant 
 asked me to go into town and make a special trip 
 to help him make his statement out. According 
 to his statement, he had surplus assets of $9000.00. 
 We found that $1000.00 of this was in a pure-bred 
 stallion that was not thought much of; $1100 in 
 two pure-bred mares, one of which he had offered 
 for sale a few days before for $500.00, and the other 
 was at the time in slings in the barn; $8000.00 
 invested in B.C. oil shares, and some money in- 
 vested in city lots in Winnipeg, which he did not 
 seem to know very much about. Well, this man, 
 after being unsuccessful in getting his loan, was 
 foolish enough to go around talking about the 
 Rural Credits Society, and threatening to sue 
 them for his $10.00. He paid more than this 
 amount consulting lawyers about it, to find out 
 that he could do nothing. 
 
 "We had another case where a man threatened 
 to be present at our annual meeting, and find out 
 why hi^ loan was turned down. He had wanted 
 $2000.00, the most we have been asked for yet. 
 He had not got his loan because we found out that 
 
 the bank had a chattel mortgage against this man, 
 and also a judgment." 
 
 Mr Weir: 
 
 "We will now ask Mr. Robson, Reeve of Sifton, 
 to give us a talk on whit thj Rural Credits 
 Society has meant from the standpoint of the 
 municipality." 
 
 HELPS THE MUNICIPALITY 
 
 Mr. Robson (Reeve of Sifton Municipality and 
 Director of Lansdowne Rural Credits Society): 
 
 "Being on the Council, I have often wondered 
 how some councils have been so hard to convince 
 that the Rural Credits system is a good thing. We 
 have loaned in three or four different municipal-- 
 ities. If any of them wish to start a society of 
 their own, they can easily start. As a member of 
 the Council, I might say that the society has 
 worked in line with the Council and has helped the 
 ratepayers — all those who were needing help — to 
 get their seed grain, etc. Some of the secretaries 
 have spoken about having hard times in the last 
 tvo years. This has been the case in our district. 
 People have had to borrow money, and some have 
 not been in a position to pay it. We have over 
 9D shareholders in our society, and have loaned to 
 40 different people over $40000.00. We had a 
 survey of our business just a week or so ago, and 
 consider ourselves in very good shape. 
 
 "There is a difficulty, as Municipal Councils have 
 found, in lending out seed grain money. The 
 Rural Credits Society can handle that kind of 
 business easier than the Council can, and with 
 better satisfaction. There used to be a lot of 
 money loaned out for seed grain, and the farme's 
 did not seem to want to pay it back. They seemed 
 to have the idea that when the Council lent the 
 money, they did not have to pay it back. But it 
 is different with the Rural Credits Society, which 
 they have found is being run on business principles. 
 
 "One thing that has impressed me, in listening to 
 the addresses that have been made here, was when 
 the speakers told about their loan meetings. I do 
 not see why these meetings should have to be so 
 long drawn out. I might say that some of our 
 directors live 25 miles from the place where we have 
 our meetings, yet these men are just as much in 
 touch as are the neighbors around. The blanks 
 are filled in ready, the man who wants the money 
 goes up and explains the position, and it is settled 
 at once. I do not think we have ever had a three- 
 hour meeting in two years, in our society. I think 
 the directors can help to make the work of the 
 secretary a httle easier and shorter. 
 . "The banks have worked right in with our 
 society. Some of the borrowers come from near 
 the bank, where they were charged 10 per cent. 
 Since our organization got under way, the' bank has 
 dropped down to eight per cent. Indirectly thj 
 society has been a helo to the whole community. 
 I myself have not much need to borrow, but there 
 is no doubt that there are some cases where you 
 must borrow, if you are going to carry on business. 
 
 "I have often wondered why the Rural Credits 
 Societies were not started years and years ago." 
 
 Mr. Weir: 
 
 "In my estimation, some of the Boards do hold 
 more meetings than is necessary, just to suit 
 the whim of one or two borrowers. That should 
 
28 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 not be necessary. I know some of it is necessary 
 in the first year of operation, but not after that. 
 
 "We are preparing now an office circular, stating 
 that the directors' meetings for the district will be 
 held on certain dates. 'You should have your 
 application in,' the circular warns, 'before that 
 time, as no more meetings will be held till mid- 
 summer. If you want a loan it is up to you to get 
 your apphcation in.' 
 
 "As long as you nurse the borrower along, he 
 will expect to be nursed. From the standpoint of 
 giving such borrowers a business training, it is well 
 to shut down on the number of meetings. It is 
 not doing the borrowers any injustice to shut down 
 on some of these meetings, and it will be a help to 
 the secretary." 
 
 OVER FIVE THOUSAND ACRES BROKEN IN ST. ROSE 
 
 Mr. Hurst (Director Ste. Rose Rural Credits Society; 
 Ex-Reeve Ste. Rose): 
 
 "I came here to learn something, and not to speak, 
 as I am no orator. Our organization is barely a 
 year in existence. Some kind gentleman in our 
 municipality — I think it was our reeve — took a 
 notion to inaugurate Rural Credits. Thinking 
 that, first of all, it would be a good plan to get 
 acquainted with the operation of the Rural Credits 
 Society to the north of us (Lawrence), he got in 
 touch with Mr. Payne, and went and had an 
 interview with him in regard to the question of 
 Rural Credits. After he came back, he said to 
 me, 'Will you help us along?' 
 
 "Well, after he left me that afternoon, I began 
 to think and think the matter over. I had had 
 some experience with banks. It was hard for me 
 to save, and, as I never had much assets, the 
 bank would never lend me much money. I had 
 learned one thing — that a man must have some 
 security to get a loan. 
 
 "When I went home, I thought this matter over 
 and decided I would take a chance on it. We asked 
 Mr. Weir to come up. Mr. Weir has been very 
 helpful to us. When we started, we were totally 
 ignorant of the business methods under which 
 Rural Credits Societies should be carried on, but 
 he helped us out. We have also had much assist- 
 ance from Mr. Chas. Murray, our agricultural 
 representative from Dauphin. A society was. 
 formed immediately. There was no difficulty in 
 getting members. We all needed money, and we 
 got about 100 in fifteen minutes. It was the 
 greatest boom we ever had there. When the time 
 came to loan, many applications came in, and 
 many meetings were held in our district. I think 
 in the future, many of these meetings will be 
 eliminated, as we will have stated dates, and will 
 educate ourselves to run the society on business 
 lines. 
 
 "Since we started to loan money, we have found 
 that it has been a very great benefit indeed. After 
 twenty-five years' experience in pioneering in that 
 country, I can say that if in times gone by I had had 
 the opportunity our settlers there have, to-day, I 
 would have been much better off. In the old days 
 I could not even raise $50.00. 
 
 "We have been generous, but I do not think 
 over-liberal. Homesteading is hard work for a 
 man with a family. It means a man has to apply 
 himself to the task of building up a home while 
 having to spend part of his time working out, and 
 at the same time contributing a little to the care 
 of his family. Every one kno.vs what a job that is. 
 
 "We had a case of a man who borrowed a couple 
 of hundred dollars to dig a well. He was drawing 
 water away from my place at the time, and this 
 worked a great hardship, as often that mans 
 children had to stay away from school in order to 
 haul the water, which was drawn in a barrel. 
 Well, he got his loan all right, and was one of the 
 first to pay it back this fall. I am not sorry we - 
 helped that man. The money loaned by the 
 Rural Credits Society has proved of the greatest 
 advantage in our country, as it has in all unorgan- 
 ized portions of the province of Manitoba." 
 
 Mr. Weir: 
 
 "All that Mr. Hurst has said is quite true. One 
 of the foremost men to organize a Rural Credits 
 Society in the province was Mr. Cyril Tucker, of 
 Ste. Rose, who has been a stalwart in the Rural 
 Credits movements since its inception. Ste. Rose 
 society has loaned tfver $60,000.00 this year. There 
 has been an area of over 2000 acres broken and put 
 in good shape for crop next spring in Ste. Rose 
 municipality." 
 
 GROWTH IN SWAN RIVER 
 
 Geo. Dickerson (President Swan River Rural Credits 
 Society): 
 
 "I am not going to speak at any length. I am 
 just going to follow out a form of report which, I 
 think, you will find interesting. 
 
 "Full credit is due Mr. Eastabrook, secretary of 
 our society, who has been a great worker. We 
 started in 1918, in the early summer, with 55 mem- 
 bers. We had considerable opposition from the 
 Council and the bankers. We went to the Council, 
 and it took the whole batch of us to get the matter 
 througji. Three or four men who were pretty welt 
 fixed and did not need to borrow money themselves, 
 could not see any reason for forming the society. 
 Then, as I say, we had considerable difficulty with 
 the banks. Evidently they were trying to head us 
 off. However, we were advised by Mr. Brown, the 
 Provincial Treasurer, that if we could not get funds 
 from the Swan River banks, he would see that we 
 got money elsewhere. 
 
 "We got our money, and began loaning in July, 
 and approved loans totalling $27,000.00. On 
 account of the lateness of the season, only $17,000.00 
 of this was used, of which $11,000.00 was renewed 
 in the fall. In the beginning of 1919, 65 loans were 
 approved, totalling $68,000.00. Of this, $31,000.00 
 has been renewed, but less than $13,000.00 of this 
 is to next December. Nearly all the remaining 
 $18,000.00 is to April 1st, to give borrowers a 
 chance to get cars to ship their grain. We always 
 have great difficulty getting cars. A great deal of 
 this money has been used for the purchase of 
 cattle. 
 
 "We are dealing at the present time with five 
 branch banks, and are operating in the vicinity of 
 five villages, so that you can see fro.ii that our 
 society s work is fairly widespread. 
 
 "The Council was not, as I have pointed out, 
 sympathetic at first. They thought it was only a 
 whim. It was thought that a successful man 
 would not give his time to it. When we started, 
 only two directors were borrowers, and even at the 
 present time, we have only three borrowing directors 
 on the board, though we have a good attendance 
 at each meeting. Most of the men of our Board 
 are well able to take care of themselves. Some of 
 them are retired farmers. All are taking a very 
 great interest in the work." 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 29 
 
 How the Rural Credits Act Protects the Borrower 
 
 and the Lender 
 
 Legal Aspects of the Act 
 
 R. F. McWilUams, LL.B.: 
 
 "I have been asked to speak to you upon the 
 le^al aspects of the Rural Credits Act. There are 
 three parties in each transaction under this Act — 
 the borrower, the lender, and the society. I share 
 a certain responsibility for this Act, on account of 
 drawing it up in the first place. Mr. Prout advanced 
 the plan which has been embodied in this Act — the 
 principle of it — and asked me to undertake the 
 work. 
 
 "I want to say to you that the work was not only 
 one of the most interesting undertakings that has 
 come to me in my twenty years of legal practice, 
 but one which took more study than any question 
 I have ever approached. "We had no precedent to 
 go upon. We studied the operations of similar 
 plans in other countries, but conditions in those 
 other countries, notably in European countries, are 
 so different that it was impossible to apply them to 
 our country. A few years ago, the American 
 Government had sent over and secured a report, and 
 that gave us a lot of information in a very conven- 
 ient form. But there was not on this continent, 
 nor anywhere else, any exact precedent for this Act. 
 
 "We had to apply Old Country law under new 
 conditions. We have been fortunate in that 
 comparatively few legal difficulties have arisen in 
 connection with the Act. But, as I say, from the 
 beginning I had a personal interest in watching this 
 scheme evolve, and I was very glad indeed to have 
 a part in it, quite aside from any legal advance- 
 ment. 
 
 "It seemed to me that the Act should be made as 
 simple as possible, in order that there should be 
 the least possible room for legal difficulties arising 
 from the operation of it. Now, as to the questions 
 that may arise, it is first of all important to have in 
 your minds a clear understanding of the principle 
 from which you start— what the Act was, what 
 were the conditions it hoped to meet, and what 
 was its plan to meet those conditions. 
 
 "I need not recall the conditions out of which 
 the need for this Act arose. All over this province 
 and the other prairie provinces, farmers were 
 vigorously asking for money. Farming, in shwt, 
 was becoming a business operation, needing capital 
 the same as any other business operation. Farmers 
 wished to get money, and wished to get it at the 
 time when they needed it. There was a strong 
 agitation against the banks, on account of high 
 rates and the demand for a system of local or 
 agricultural banks, as in the United States, and 
 many European countries, grew daily. Now, we 
 used to believe that our bankmg system was the 
 best in the world. But it was modelled on the 
 system in Scotland, designed to meet comrnercial 
 needs The rapid turnover of money is the pnnciple 
 upon which the banks stand. ■ Merchants, where 
 they are keen business men, make money rapidly 
 and turn over their capital quickly. But a bankmg 
 system of this kind was not adapted to the needs 
 of th° farmer, who often had not much margin, and 
 turned his money once a year or less. The banks 
 
 were not antagonistic to the farmer, but their 
 whole organization was not built to suit farming 
 condition in this country. Then, it has always to 
 be remembered that the money the bank is loaning 
 is not its own, but that of its depositors, and it is 
 the bank's duty to stand ready at any time to meet 
 the claims of depositors. The object of the Rural 
 Credits Act was to bridge the gap between the 
 existing banking system and the needs of the farm- 
 ers, to furnish money to the farmer and security to 
 the banker, to increase production, and to provide 
 a way by which the excellent banking system of 
 Canada could be utilized in the interests of the 
 farmer. 
 
 SECURITY TO BORROWER, LENDER AND SOCIETY 
 
 "Now, let us look at the security this Act gives 
 to the parties concerned. First of all, the borrower. 
 Previously, even if a man could get money, his 
 greatest difficulty was, that he could be called upon 
 to pay a high rate of interest. Now, there is a 
 fixed rate, enabling him to know in advance exactly 
 the rate of interest he is going to pay. Then, this 
 man who is struggling to get on his feet finds him- 
 self dealing with a committee of his own neighbors, 
 men who know him by his first name, men who have 
 lived under the same conditions as himself, have 
 worked side by side with him, and know and can 
 sympathize with his difficulties and troubles. They 
 can see farther than a stranger could, as they know 
 his industry and his character. Character is one 
 of the most essential elements of the borrower. He 
 knows that this committee of neighbors are anxious 
 to see him get ahead, and that considerations of 
 character and industry are going to be given full 
 weight. They will not treat him arbitrarily. 
 
 "Now, as to the security of the society. First of 
 all, there is the borrower's personal undertaking to 
 pay, his personal liability. Second, there is the 
 lien on things purchased or produced from the 
 loan. Third, the lien on all personal property by 
 registration. This registration of the loan gives 
 you what is, in effect, a chattel mortgage on the 
 borrower's entire personal property. Fourth, under 
 Section 35, you have the right of inspection, the 
 right to go on to the premises of the borrower, and 
 see that the conditions of the loan are being carried 
 out. The borrower knows that at any time the 
 officers of the society may exercise this right of 
 inspection, and he should govern himself accordingly. 
 Fifth, you have the special right of taking posses- 
 sion, by the most simple method. Your sixth 
 remedy, or security, is the Bulk Sales Act, passed 
 in Manitoba. This Act is a very effective one. 
 The seventh remedy is that the society, if it deems 
 advisable, may take from the borrower further 
 security. The society has therefore seven remedies 
 to protect itself against loss. 
 
 "The security to the lender may be set forth as 
 follows: First, every loan is approved by local 
 Boards, and local control should guarantee the 
 permanence of the quality of the security. The 
 lender of the money, whether it be a bank or other 
 
30 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 institution or person, has the peculiar advantage 
 of a Board of Directors acting for nothing, and 
 each giving his personal guarantee as to the repay- 
 ment of the money. Then, thirdly, you have the 
 guarantee funds — and here I would mention that 
 one question you ought to consider is, how far 
 that fund ought to be paid up. Fourth, among the 
 securities, are the special remedies societies have 
 for the collection of moneys. Fifth, there is behind 
 all, the liabiUty of the Government and the munici- 
 palities. Sixth, there is the supervision direct from 
 a central office, and the benefit of expert advice 
 from men who understand the conditions under 
 which the loan is made. 
 
 "This Act has made the bond of the lender under 
 its operation as good as that of the big capitalist. I 
 
 want, in conclusion, to congratulate all the directors 
 here upon the success that has attended their efforts. 
 Mr. Prout has been well called the father of the 
 Rural Credits Act. Possibly I might be called the 
 father-in-law. There has been splendid executive 
 work in connection with the Act, and it has proved 
 actually to be the solution of the difficulties between 
 the banking and the farming interests of this 
 country. The achievement of the Boards of the 
 Rural Credits Societies is a magnificent one, and is 
 a testimony to the brains and business capacity of 
 the farmers of this country." 
 
 (It was moved by R. A. McKnight, of Elkhorn, 
 seconded by Mr. Benton, that a hearty vote of 
 thanks be conveyed by the gathering to Mr. 
 McWilliams.) 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 31 
 
 The Problem of Profitable Crop Production 
 
 Losses from Weeds and Disease — Soil Drifting — Cover Crops- 
 Breaking — Rotat ions 
 
 John Bracken, B.S.A. 
 Professor Field Husbandry, University oj Saskatchewan, Saskatoon 
 
 -Rust— New 
 
 Some of you have been farming all your lives. 
 You know this subject is too large to be adequately 
 dealt with in three-quarters of an hour, or, for the 
 matter of that, in three-quarters of a week. There- 
 fore, I am going only to outline very briefly the 
 problem of profitable farm or crop production, and, 
 having done that, to deal specifically with half a 
 dozen of the more pressing problems that are 
 facing the farmers of Western Canada to-day, 
 particularly the farmers of this province. The 
 problem of profitable crop production is a three-fold 
 one — the problem of production to get crops out of 
 the soil; the problem of profit; and the problem of 
 a permanent agriculture, arranging so that we will 
 get crops in the future as well as in the present. 
 Now, production is essential to the well-being of 
 the race. We see some evidence of the ill effects 
 of under-production in the present unrest in society. 
 This is traceable largely to the fact that during the 
 last four or five years we have been producing less 
 than we needed, and so have not enough to go 
 round. Profitable farming is essential to successful 
 production. If the man on a farm cannot make a 
 profit, he won't continue to farm very long. A 
 permanent agriculture is essential to the future 
 well-being of the state. If the present generation 
 of farmers waste their heritage, future generations 
 must suffer. I propose to deal with these three 
 phases very briefly. 
 
 In regard to the first, the problem of production, 
 there are six things, and six things only, that are 
 essential to the growing of large crops. These six 
 things I need only mention. They are: (1) the 
 seed which carries the fife principles; (2) plant food 
 in the soil; (3) moisture; (4) heat; (5) light; (6) air. 
 Of course, food, moisture and heat are the import- 
 ant things, but six are necessary for growth. If we 
 can provide these things we will get large yields. 
 In the final analysis the production of our crops 
 from the land traces back to providing these six 
 things. Fortunately for us, nature provides most 
 of them with a lavish hand. It is our business to 
 increase those which for one reason or another are 
 lacking; in a dry country to get moisture; in a cold 
 country, to get heat; in a poor soil, to add plenty 
 to it. 
 
 OUR LOSSES FROM DISEASE, WEEDS, ETC. 
 
 But it is not enough that man should know the 
 things that are necessary to produce large yields. 
 The farmer does not farm for his health alone. 
 For him there must be something left after the cost 
 of production has been met. Now, even if he has 
 provided the conditions that will produce big crops, 
 certain things may come along and lower the profits 
 from these big crops. Man must, in addition to 
 providing those six things, protect his crops from 
 four things — from weeds, insects, plant disease and 
 from storms. We in Saskatchewan pay $25,000,000 
 a year for the privilege of growing weeds, and I 
 suppose you pay just as much in proportion down 
 here. You know something about the ravages 
 caused by insects. You know that in 1917 Western 
 Canada lost $100,000,000 as a result of the rust 
 disease. You know what we lose every year from 
 
 storms. These are factors that farmers have to 
 reckon with. And there is one other factor, a thing 
 which we are gathered here together to help develop 
 or get information upon, and that is, that in order 
 that there may be a profit we must keep production 
 below the selling price. If we don't do that, we 
 will have to control the price, which is more difficult, 
 and if we don't do either one of those two things, 
 we will have to quit farming sooner or later. 
 
 FACTORS ESSENTIAL TO PERMANENT 
 AGRICULTURE 
 
 With regard to the permanence of our agriculture, 
 there are countries in the world to-day which have 
 been growing crops for 4,000 years, and they are 
 growing bigger crops than we are at the present 
 time. Ours is the most wasteful system of agricul- 
 ture that is being followed anywhere that I know 
 of in the world to-day, though it may be profitable. 
 There are two things that we will have to give 
 attention to if we are going to have a permanent 
 agriculture. These are the maintenance of the 
 organic matter in the soil and the maintenance of 
 plant food. The organic matter is the constituent 
 which tends to bind the soil together, the constituent 
 which more than any other is related to the moisture- 
 holding capacity of the soil. Perhaps you have 
 now obtained a bird's eye view of the things neces- 
 sary to growth, the things that we must control to 
 grow crops properly, and the things necessary to a 
 permanent agriculture: Seed, plant food, moisture, 
 heat, light, air; you must protect crops from weeds, 
 insects, plant disease and storms; and you must 
 keep the cost of production below the selling price. 
 Farming has been said to be "one-eighth science 
 two-eighths practice and five-eighths business." If 
 you are gathered here for any purpose, it is to further 
 the interests of the business farmer, and if we are 
 going to be growing crops here in the next genera- 
 tion or two, we must maintain organic matter and 
 plant food in the soil. 
 
 What are the means at man's disposal for main- 
 taining this growth and permanence? I am just 
 going to name them. A man may choose suitable 
 crops. He may practice suitable crop management 
 practices, until he farms in such a way that he will 
 get the most out of the land. He may also improve 
 his crops by weeding. You may irrigate lands, or 
 drain lands where there is too much moisture, or 
 both. Both of these are being practiced in Western 
 Canada to-day. He may till the soil. Under our 
 conditions, the greatest means at our disposal for 
 controlling low yields is tillage. You may practice 
 crop rotation, a thing that we have not quite come 
 to yet, but a thing that we are ready to adopt. 
 You may apply business principles to management 
 of land and labor, money and equipment. He may 
 be a business man as well as a crop grower. Then, 
 with the use of legume crops and the application of 
 manures, he can help to maintain the vitality of 
 the soil. These are ten means which man has for 
 controlling the things necessary for growth, and 
 these are the things which affect profits and the 
 permanence of the industry. 
 
32 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 GROWTH OF WESTERN CANADA BY PERIODS 
 
 Having briefly outlined the problem, I want to 
 discuss a few specific matters. First of these are 
 climatic problems: the moisture supply, the frost 
 problem and soil drift as a result of high winds. 
 Two of them are crop problems, the choice of forage 
 crops and rust. Three of them are soil problems, 
 tillage, crop rotation and soil fertility. In discussing 
 these problems I would like you to understand that 
 none of us feel that they have been solved. We are 
 a new country yet, and instead of having a solution 
 of our problems, we hardly yet know what these 
 problems are. I woiild just like for one minute to 
 refer you in fifty-year periods to the history of this 
 country. Three hundred years ago the first white 
 man, Hudson, saw Western Canada. Two hundred 
 and fifty years ago saw the first settlement of 
 English-speaking people, on the edge of the Hudson's 
 Bay, and at that time this whole country was sold 
 to a company of adventurers, later known as the 
 Hudson's Bay Company, for two elks and two 
 black beavers. Two hundred years ago the first 
 white man saw our prairies, and it was on this very 
 historic spot, the junction of the Assiniboine and 
 the Red rivers. One hundred years ago Lord 
 Selkirk bought 116,000 acres of land in the Red 
 River Valley for ten shillings, and he arranged for 
 the first settlement of farmers here. They came in 
 by way of the Hudson's Bay. The story of that 
 first settlement is a very interesting one. Fifty 
 years ago Manitoba became a province. At that 
 time there were 12,000 in Manitoba, 2,000 white 
 people, 5,000 EngUsh half-breeds and 5,000 French 
 half-breeds. Fifty years ago the Hudson's Bay 
 Company surrendered the land they got for two 
 elks and two black beavers to the Dominion Govern- 
 ment, which paid one and a half million dollars and 
 gave one-twentieth of all the land south of the 
 North Saskatchewan river. The first wheat was 
 exhibited 43 years ago. At the present time you 
 are growing five million acres of crops. Now, it is 
 not to be expected that in that brief bit of history 
 our problems would have been solved. Some have 
 been solved, but we have soon found others. I am 
 going to leave the early maturity and the cost 
 problems to the last, because the'y will take a little 
 longer to deal with. 
 
 THE PROBLEM OF SOIL DRIFTING 
 
 In all countries with high wind velocity there is 
 drifting soil. The time of its occurrence in this 
 country is usually in May, before the spring crops 
 have got established in the ground, although in the 
 Chinook belt farther west, it occurs all winter. 
 The worst effects of soil drifting are found on 
 sandy soils, and, of course, the worst injury is 
 found in the Chinook belt. The remedial measures 
 for soil drifting are of two kinds. The first is to 
 increase the resisting power of the soil, and the 
 second is to protect it. One way to increase the 
 resisting power of the soil is to make it more moist. 
 Wet soil does not blow. More important still, we 
 can increase the organic character of the soil. 
 When new soil is sown it does not blow. When 
 cultivated for a few years it starts. The root fibre 
 works out, and when we get a period of dry seasons 
 and a few weeks of high winds, the soil blows. 
 
 LEAVE THE SURFACE ROUGH 
 
 We may increase the organic matter generally. 
 That can only be increased in three ways. We can 
 grow perennial crops which have greater root 
 
 systems, cereal crops and grasses. You may apply, 
 manure or you may plough in a green crop. If 
 you use up the moisture in the soil you have to 
 summerfallow another year, and that is expensive. 
 The only other way is to grow perennial grass crops. 
 These increase the resisting power of the soil and 
 improve the soil structure. We can improve the 
 soil structure in several ways. The chief way in 
 which soil structure is injured is by unsuitable 
 tillage, discing and harrowing in summerfallow 
 instead of cultivating. The surface of the field 
 should be left in a lumpy condition rather than in 
 the condition of a dust mulch. I think this is the 
 most unfortunate term ever coined for any dry 
 country, that is, the dust mulch. We need a 
 mulch, but we want one that will stay on the land. 
 We want a lump mulch. There should be deep 
 cultivation with the soil left in ridges. We have 
 some soils where the top black layer is not very 
 deep. They are not in the Red River Valley, but 
 they are in some parts of the country, and these 
 must blow when the soil is plowed deep, particularly 
 in the case of light soils. Shallow soils should be 
 plowed shallow. Unless that is done, when we 
 plow we shall turn the light sub-soil on top, and it 
 will be sure to blow even though the soil is manured. 
 There are occasions when deep plowing should be 
 practiced, but deep plowing should not be practiced 
 on shallow soils in regions where drifting occurs. 
 
 USING A COVER CROP 
 
 In regard to the practice of protecting the soil, 
 there are two ways in which the soil may be pro- 
 tected so as to lessen the chances of its blowing. 
 On the fallow a crop may be sown in August that 
 will tend to hold the soil until next May. It is not 
 a sure preventive, but under some conditions it will 
 help. The second crop should not be plowed until 
 just before it is ready to be sown, and the stubble 
 will tend to lessen drifting. Perennial crops may 
 be used, crops which occupy the land when plowing 
 occurs. The only crops that can be used in this 
 way are winter rye and sweet clover. In one por- 
 tion of our crop area, where drifting occurs, one . 
 man sowed half a section to winter rye and the 
 other half section to winter oats. The oats was 
 all blown out, but the winter rye was a perfect stand, 
 and the soil blown off the winter oats field blew 
 into the winter rye. Now, winter rye is not as 
 valuable as wheat. Ordinarily it just sells for 
 two-thirds of the price of wheat. But winter rye 
 is better than no crop at all, and sometimes you 
 will get winter rye when you will not get wheat, 
 and the same applies to clover. We may sow 
 perennial grass to protect the soil. In some of the 
 poorer soils it is only a matter of time when they 
 will have to be put back to grass in order to lessen 
 this cause of injury. 
 
 We may protect the soil artificially by wind- 
 breaks and by applications of manure and straw. 
 If a man has a field, one corner of which is likely 
 to blow, he can manure that and perhaps save the 
 whole field. A ten-acre patch in a field can spoil 
 80 acres. That can be stopped in the early stages 
 by protecting it with manure or straw. Except on 
 poor soils, or when a farmer practices unsuitable 
 tillage, soil drifting is an evidence of soil deteriora- 
 tion. We are often led to think in this country 
 that our soils are the richest in the world. They 
 are rich, and they won't wear out very rapidly, but 
 too many of such statements have been made, 
 judging from the very richest soils in this country. 
 
KUKAL CKKDITS SOCIETIES OF MANITOBA 
 
 33 
 
 We have not enough data about the poorer soils, 
 where there is already evidence of deterioration, 
 and when a man should start to build them up. 
 When a farmer gets to that stage, he may think 
 that there is no system of farming that is likely to 
 make a farm so profitable as before the soil started 
 to drift. 
 
 THE FORAGE CROP PROBLEM 
 
 I shall now deal with the forage crop problem. 
 Every dry country has that problem except those 
 countries where irrigation is practiced. In this 
 country where wheat is the main crop, we don't 
 realize that we have forage problems until we want 
 feeds. In the South Central States the forage crop 
 problem has been largely solved by bringing in crops 
 from other countries. They are growing Soudan 
 grass and corn, etc. We are living too far north 
 for these crops, but we will have to look somewhere 
 for forage crops. The long-hfe crops are the most 
 paying crops. In England land left down to grass 
 gives a better return than any other. Short-life 
 crops are better .under dry conditions. The chief 
 perennial crops which are likely to be used in 
 Western Canada are four in number — rye grass, 
 brome grass, timothy and alfalfa. They are the 
 best we have. That does not mean that one should 
 expect enormous yields, such yields as might be 
 expected under humid conditions. Timothy is only 
 suitable for the northern part of the prairie region. 
 .?■ Among the perennials there are only two — winter 
 rye and sweet clover — both of them relatively new. 
 In the case of sweet clover, there are many who 
 are of the opinion that it has not yet passed the 
 experimental stage. We feel that it has passed 
 the experimental stage under our conditions, and 
 we look to it to have a big place in our agriculture 
 in future. Among the annual crops best suited to 
 our conditions are cereal hay. It is questionable 
 if any hay can be produced more cheaply than 
 cereals, preferably oats. Soudan grass gives some 
 promise. It has not been shown yet that it is 
 unsuitable. We think it is suitable under some 
 conditions in Saskatchewan, and here, in a lower 
 altitude, it may be suitable. Corn is not yet 
 appreciated in the Red River Valley as it should be. 
 If there is ever a com belt in the West, it will be in 
 the Red River Valley, because here you have more 
 favorable climatic conditions for it than in any of 
 the other prairie provinces. Roots as a crop for 
 general farm use are rather too expensive to grow. 
 
 While on this subject of forage crops, I would like 
 to mention two or three other crops which are not 
 forage crops, new crops which perhaps have escaped 
 your notice. One is named Durum wheat. You 
 have the rust problem. That is very serious. 
 Durum wheat is a rust-resisting wheat, not immune 
 but quite resistant to the attacks of rust. It is 
 not the kind of wheat that the millers like you to 
 grow, although it has been selling ever since its 
 cultivation started at the same price as No. 1 
 Northern. It is possible that Durum wheat might 
 supply the demand in the event of the price of 
 wheat dropping. In North Dakota it is pointed 
 out that if this wheat is to be grown it should yield 
 at least 12 per cent, more than the common spring 
 wheat in order to make up for a possible lower 
 price. It is not so according to our standards. It 
 is just as nourishing as the others, and we think 
 there is a place for Durum wheat in Southern 
 Manitoba and Saskatchewan. Winter rye is much 
 less valuable, but one that will give a crop when 
 wheat will not. Another crop that should be noted 
 
 is two-rowed barley. You have heard that six- 
 rowed barley was the barley for this country. 
 Under our conditions in Central Saskatchewan we 
 have had about six hundred different kinds of crops 
 under test, and we have found that two-rowed 
 barley averaged twelve per cent, more than the 
 nearest competitor, which happened to be six-rowed. 
 Another notable crop is flax, which is one that 
 Manitoba farmers have not grown much, but 
 which is one of the most drought-resisting crops. 
 There should be a place for flax in some Manitoba 
 soils. 
 
 THE RUST PROBLEM 
 
 Just a word about rust. In every humid country 
 where wheat is grown rust is commonly found. In 
 this country, the Red River Valley suffers more 
 from rust than any other portion of the West, for 
 the reason that you have a greater precipitation 
 and probably a little lower average temperature. 
 We speak of rust as being a disease. Rust is a 
 little plant, just a miniature plant, so small that 
 you can't see it with the naked eye. The seed or 
 spores of the plant later on light on the wheat 
 plant. They germinate and get into the stem, 
 spread to the roots and take the nourishment that 
 ought to go into the head of the wheat. In ten 
 or twenty days it bursts out through the stem 
 again, and you see the rust plant, of a red, russet 
 appearance, in the stem. Rust has never been 
 satisfactorily controlled. We may lessen its ravages 
 but we have never yet found a way to prevent it. 
 Remedial measures may be discussed under three 
 heads — rust evidence, rust prevention and rust 
 resistance. You can fight rust by growing early 
 varieties. The earlier we can get the crop right, 
 the less time rust has to work its injury. In every 
 rust year, the earlier varieties, other things being 
 equal, will yield more than the late varieties. We 
 may sow crops early. Experiments which have 
 been made show that the later ripening of the 
 crop gives the rust more time to work its injury. 
 Then, the farmer may practice certain crop man- 
 agement methods to avoid rust. Crops sown on 
 grass land will have less rust than crops sown on 
 fallow. It seems to me that the time has come 
 when the Red River Valley will probably find a 
 more profitable system of farming than simply 
 growing wheat. Wheat is not grown on the highest 
 priced lands of the world. I look forward to the 
 time when economic conditions will have changed 
 and when on some portions of the Red River Valley 
 you will have a more intensive cultivation,* when 
 the land will probably be the richest in the country, 
 and when you will have a system of farming with 
 corn and vegetables. The only way in which you 
 can prevent rust is by killing the other hosts of the 
 disease. The more we can kill of these, the less 
 likelihood there will be of rust on wheat. 
 
 Regarding rust resistance, it has been found that 
 some plants resist rust better than others, that in 
 the case of some plants it makes little headway. 
 In order to obtain, therefore, one common, rust- 
 resisting, high quality, rich wheat, suitable to our 
 conditions, men have started to cross those wheats 
 that are rust resisting with our other wheats. 
 They are hopeful of getting common wheats that 
 will resist rust, but within the last few years they 
 have made a discovery that puts the solution of 
 this problem farther into the background than ever. 
 In this connection, I would like to mention Dr. 
 Thompson's work in Saskatchewan. He has made 
 
34 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 hundreds of crosses with common wheats. He 
 grows the wheat under hothouse conditions, sprays 
 rust spores on the plants, and watches whether they 
 rust easily or offer resistance. He has found that 
 some strains show resistance to the ordinary strains 
 of rust, but on experimenting with rust spores 
 from different parts of the country, he has found 
 that those strains of wheat that resisted some 
 kinds of rust were not resistant to other kinds of 
 rust. And so the problem is complicated. But 
 while the problem is complicated, it is not impossible 
 of solution. 
 
 THE PROBLEM OF NEW BREAKING 
 
 I was asked to speak specifically of one tillage 
 problem, the tillage of virgin prairie, because I 
 understand you men are loaning men money to do 
 this class of work. In all these farm problems it is 
 well that we should know what we are after when 
 we set out to get it. When I was on a farm in 
 Ontario, I used to plow, and I plowed because my 
 father plowed, and he plowed because his father 
 plowed, as generations before had plowed. Now, 
 when we work we should do it with certain objects 
 in view. What are the purposes of tilling prairie 
 land? They are just three — no more and no less. 
 The first is to kill the vegetation; the second is to 
 restore moisture in the soil; and the third is to 
 prepare a seed bed, so that when we put the seed 
 in we can cover it up and give it a chance to grow. 
 Now, we kill the native vegetation by plowing. It 
 does not matter very much when we do it. To 
 restore moisture, that is largely dependent upon 
 when the work is done. Take two pieces of land. 
 You plowed one in June and the other in August. 
 That plowed in August will have two months' less 
 moisture than that plowed in June, because for 
 every pound of dry hay that is produced from 
 one-eighth to one-half a ton of water has been taken 
 out of the soil. You see, therefore, that the sooner 
 we get native vegetation killed the better will we 
 be able to keep moisture in the land. Under our 
 conditions, June breaking produces 37 bushels, 
 July breaking 34, August breaking 29, September 
 breaking 23, and spring breaking 21. There is a 
 difference of 16 bushels of wheat, due altogether 
 to the time when the operation was done. These 
 yields were from three of our best areas. In the 
 east we turn the furrow on edge. In this country, 
 however, we should turn it over flat. We don't 
 want to keep in the air, we want to keep it out. 
 There is too much air in most of our land. Turn 
 it over flat and give the sod a chance to rot quickly, 
 so that when discing time comes we will be able to 
 make a good job. Plow early, turn it over flat and 
 disc the soil for three purposes — to control the grass 
 that may grow, to conserve moisture, and to make 
 a seed bed. That is all there is to breaking. If 
 when we do that we accomplish it at the lowest 
 cost, that is good breaking. Sometimes we have 
 to plow twice to kill grass, when sometimes a 
 deeper plowing would do it. Now in regard to 
 spring breaking. When a newcomer arrives here, 
 he wants to get rich quickly. He thinks he should 
 have a crop the first year. He plows up land and 
 sometimes fails. The best crop for spring breaking 
 is perhaps flax. Com, oats and hay are sometimes 
 used. We never recommend a man to grow a 
 grain crop of the popular kind on spring breaking 
 in our country, although there are some chances of 
 getting it in parts of Manitoba, because there is 
 more moisture. 
 
 THE ROTATION PROBLEM 
 
 Just a word about the rotation problem. Crop 
 rotation consists merely of the regular rotation of 
 crops of different kinds designed to result in a 
 larger net return or in some improvement in the 
 soil. Every new country starts out to grow the 
 crop that it finds most profitable. In the Southern 
 States it is cotton, in the Central States, corn, and 
 up here, wheat. Sometimes it can be shown that 
 a country is not growing what is most profitable. 
 The best evidence of the value of crop rotation is 
 supplied by the longest continued experiments in 
 the world. That is in England. In one area where 
 wheat had been grown for 40 years, without rota- 
 tion, the average yield is 14 bushels. With rota- 
 tion the average yield is 25 bushels. On the 
 University campus of Louisiana the average yield 
 of wheat, without rotation, is 27 bushels to the 
 acre, while with rotation, the average yield is 
 47 bushels. There was nothing put on the land in 
 either case. Coming nearer home, to the Red 
 River Valley, the average yield without rotation, 
 has been 13 bushels, and with rotation, 19 bushels. 
 At Saskatoon wheat after rotation produced 34 
 bushels, and without rotation, 20 bushels There 
 was nothing else done to the land. What should 
 we use when we are going to establish rotations? 
 There are just about four kinds of crops when it 
 comes to making rotations. There are the cereal 
 crops, which take out some plant food and moisture 
 from the soil; there are the hoed crops, which take 
 out some plant food and moisture, but which leave 
 some moisture and some valuable plant food; there 
 are grasses which take out some moisture and 
 some food, but which leave organic matter; and 
 there are legume crops, like alfalfa and sweet 
 clover, which take out plant food and so on, but 
 which leave organic matter and also nitrogen, the 
 most valuable constituent in the soil. The only 
 crops that can get it free from the air are the 
 legume crops. 
 
 THE VALUE OF LEGUMES 
 
 Our rotations of the future must include, as do 
 those of older regions, a legume crop, an intertilled 
 crop, and a money crop. At the present time in 
 Western Canada, legume and intertilled crops 
 suitable for use in a large way are not available, or 
 if so, are either not well suited to all conditions or 
 do not lend themselves satisfactorily to practicable 
 changes in ova present system of farming. Some 
 difficulties have yet to be surmounted before paying 
 crop rotations are discovered and firmly established. 
 
 "The air over every acre of land contains seventy 
 million pounds of nitrogen, the most costly fertiliz- 
 ing element. This amount is sufficient to supply 
 the nitrogen of fifty bushel crops of wheat every 
 year for a million years, yet farmers in some coun- 
 tries are paying eighteen cents a pound for nitrogen 
 to put on the land. Nitrogen in the air can be 
 secured at no cost to the farmer if he will but 
 grow some legume crops at intervals. This kind of 
 crop when inoculated with nitrogen fixing bacteria, 
 has the power of drawing upon the immense store 
 of nitrogen in the air. 
 
 In such of our virgin soils as are rich in nitrogen 
 it is possible that the use of legume crops may not 
 now result in large increases in yield. Investiga- 
 tions at present under way will soon answer that 
 question. In the meantime the fundamental fact 
 regarding legumes should not be forgotten. Neither 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 35 
 
 should it be forgotten that all our soils are not 
 virgin, nor are all rich in nitrogen. 
 
 Perhaps our most promising legume for rotations 
 is sweet clover. Among its most valuable charac- 
 teristics are: (1) its suitability to our climate; 
 (2) its biennial character; (3) its high productiveness. 
 It grows nearly a month before corn is up, and 
 generally remains green for a month after com 
 freezes in the fall. It is seldom seriously injured 
 by spring or fall frosts. It is claimed sweet clover 
 also has a certain amount of resistance to alkali, 
 and there seems evidence to substantiate this in a 
 measure. Sweet clover makes a satisfactory pas- 
 ture when it is young for cattle, hogs and sheep, but 
 becomes bitter when more mature. It seems to 
 possess very promising possibilities for Western 
 Canada. 
 
 Intelligent tillage, the choice of suitable crops, 
 and suitable cultural practices, will enable us to 
 develop the resources of our soil. Business methods 
 and in some places a rotation of crops and the intro- 
 duction of live stock will enable us to produce crops 
 more profitably, but only the use of legume crops, 
 the practice of a crop rotation and the return to 
 the soil of some of the plant food we remove in 
 crops and in fallowing will enable us to build up a 
 permanent agriculture, and a permanent agriculture 
 is absolutely essential to the future well-being of 
 the State. 
 
 In the final analysis our ultimate success as a 
 nation depends not only upon our ability to produce 
 profitable crops now, but upon our ability to keep 
 on producing profitable crops. 
 
 ill 
 
36 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 The Manitoba Rural Credits Act in Operation 
 
 E. A. Weir 
 Agricultural Director Rural Credits Societies 
 
 The season of 1919 has been very successful in and many men who made expenditure on equip- 
 the expansion of Rural Credits Societies, in the ment, scrubbing and other preparations, were not 
 development brought about, in the public spirit able to do more than a fraction of the work they 
 and general interest developed, and in the financial had planned, 
 aspects of the movement. Thirty-eight societies 
 
 were in operation this year, though a considerable obligations well met 
 
 number of these did not start in time to grant many Under such conditions, the manner in which 
 
 loans or accomphsh but a small percentage of what borrowers from Rural Credits Societies have met 
 they will in 1920. their obligations, has been very satisfactory. The 
 
 This year $1,051,876.00 of credits, including largest renewals have been in the northern areas, 
 renewals from 1918, were granted. These renew- where most development work was done. In some 
 als almost without exception were cleared off this societies, no loans have been carried over to next 
 fall. The 1919 credits were divided as follows: fall. In others, not above 15 to 20 per cent.; in 
 
 Purchase of Live Stock $172,532.00 several cases less. The south-western portion of 
 
 Purchase of Machinery. . . . 94,155.00 the province where crops were unsatisfactory, have 
 
 Putting in and taking off Crop. 278,748.00 met their obligations well. In the northern areas. 
 
 Freaking New Land 247,691.00 especially Swan River, and Minitonas, extensions 
 
 Farm Improvements 18,865.00 have had to be given on much paper to March 15th, 
 
 Retiring Liabilities and Sundry as it has been impossible to get cars to ship grain. 
 
 Purposes 239,885.00 But at that time 75 to 80 per cent, of the loans 
 
 None of the years under -^ hich Rural Credit ^i" be paid. Roblin area has had an excellent 
 Societies have been operating in Manitoba have clean-up. The renewals m this district will not 
 been particularly disastrous or particularly good, average over 15 to 20 per cent. It was considered 
 though crops have been good or a failure in various when these credits were granted that renewals of 
 localities. Conditions applicable to most of West- §0 per cent, would probably be asked for and justi- 
 ern Canada have been met with, and societies are A^d The morale of repayment has generally shown 
 now operating in areas that could be called typical marked improvement In 1918, 2500 acres of 
 of the varying conditions to be found in the three [and was broken in this area, and this year new 
 Western Provinces. Swan River and Roblin have breaking in Roblin averaged around 25 bushels per 
 been in good, sure crop, mixed farming areas, acre, considerably above the general crop. A large 
 where settlers are fairly well-to-do and expansion f^o™' of new breaking was done again this year, 
 rapid. Lawrence has been in an absolutely home- One $5000.00 loan m this area was used for pure- 
 stead area, where few men have their patents. b^d Percherons and Shorthorns, and was repaid 
 Plumas has been in country less fortunately en- i" September. „ ' , 
 do wed. Lansdowne society has operated in an old- Even the h9mestead areas which suffer much 
 established but not naturally rich area, and Waskada worse, proportionately in a bad year, met their 
 has been in the semi-arid belt, under conditions loans well this year. Lawrence district, which had 
 almost an exact duplicate of Southern Alberta and $20,000.00 of credits, renewed $8740.00 to Decem- 
 Southern Saskatchewan. Other societies have seen ber 1st, and $2000.00 for short terms up to March 
 all gradations between. 1st. And this in spite of quite serious loss to stock. 
 This year's crops in Manitoba in some areas, due particularly horses, from svamp fever and other 
 to heat, drought and rust, were practically a failure. diseases, which are still quite serious. The larger 
 Rain damage late in the fall added to the difficulty Part of the credits there were for breaking and 
 almost everywhere. All districts suffered and some stock. In Ste. Rose renewals were heavy, but 
 where societies were operating, viz., Plumas, Ste. crops were bad. Many obhgations could have 
 Rose and Lawrence, had the worst crops in their been paid by selling cattle as Ste. Rose is a good 
 history. Glenella suffered almost similarly, and stock area, but borrowers were saved from sacrific- 
 had, also, hail damage. Even some of the area mg their stock. The same was true in Lawrence 
 between Lakes Winnipeg and Manitoba, generally and Enksdale. The total long-term renewals is», 
 considered a sure-crop district, suffered severely. less than the credits for breaking, and these loans. 
 The grade of grains was low. The situation was as well as considerable for stock, are justifiably 
 further complicated by the slump in the cattle renewable if the borrower has used the money 
 market. Hundreds of farmers, especially in the property. In Ste. Rose district over 2000 acres 
 north and central parts, who would have cleaned of land were broken and put in good shape for 
 up obligations from the sale of cattle, have carried crop next year. In Teulon 4000 acres, m other 
 these along, not wishing to sacrifice them. Rural societies, proportionate areas. It is estimated 
 Credits Societies have enabled them to do this. that 25,000 acres of land was broken this year 
 There is a shortage of feed in many places, and in through breaking loans. 
 
 many places the feeding value of the straw was The most pronounced growth of societies m 1919 
 
 depreciated seriously by rust and the heavy rains. resulted from over-growth of societies already m 
 
 There was a considerable surplus of hay in this existence. In Roblin area, from one society in 1918, 
 
 province, though much of it has already been shipped there are now five in operation. In Lawrence, a 
 
 to Alberta or Saskatchewan. new society has been started at Magnet, and the 
 
 The strike in Winnipeg at the best time of the old society still has 102 members. Ste. Rose has 
 
 season for breaking retarded this work very much, also over-grown, and a new society is now completed 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 37 
 
 at Laurier. Eriksdale and Swan River are in a 
 similar position. Rockwood Municipality has three 
 societies in operation. Grandview, which was only 
 started a few weeks ago, has 80 members, and a 
 new society seems likely shortly. From convincing 
 farmers of the soundness of the system, as the 
 problem was in 1917 and 1918, central ofiBce staff is 
 now kept busy relieving the pressure. 
 
 Directors have attended on the average 80 per 
 cent, of the Board meetings. 
 
 EDUCATION OF BORROWERS IMPORTANT 
 
 Rural Credits Societies have now reached a point 
 where the education of the borrowing members is an 
 important feature. The problem is not only one of 
 granting credits, but of teaching the borrower how 
 to spend the money to the greatest advantage; in 
 short, how to link up cash with hard experience. 
 Societies have grown so fast it has been difficult to 
 give adequate attention to this work; in fact, such 
 cannot be done at the present time. But con- 
 structive education in farm finance is an insepar- 
 able part of Rural Credits administration and 
 society management. 
 
 I have long believed and am now absolutely 
 convinced that the greatest practical educational 
 need of the average farmer to day is education in 
 farm finance and farm management. All the stress 
 has been laid, and nearly all the funds for extension 
 service in Canada and United States, have been 
 spent on education for production alone. The 
 number of farmers who know much of the principles 
 of farm finance are very few. For example, count- 
 less farmers in this country are operating under the 
 half-crop pay system, and I even found one a few 
 days ago who was giving three-fourths of the crop 
 to the owner. Some, of course, cannot help it, but 
 few of those operating under this system realize 
 its handicaps. There never was a worse system of 
 trying to finance than the half-crop pay system. 
 Many men have too much capital tied up in land, 
 and not nearly enough in equipment. They are 
 like a merchant with a warehouse several times 
 larger than required for the good he has to put in it. 
 How many farmers realize the value of the thirty- 
 year mortage loan? The majority of those who 
 put on thirty-year mortgages through the Manitoba 
 Farm Loans Association are not doing so, primarily, 
 so much on account of the long term as because of 
 the lower interest rate. Many I talk to say: 
 "How soon can I pay this back?" But great as is 
 the advantsig'e of the low interest rate, a still 
 greater advantage is served by the thirty-year 
 amortization plan of repayment. When one says, 
 "You have thirty years to repay," the reply is: 
 "I hate being in debt for thirty years." It is a 
 privilege to be in debt for thirty years to the Mani- 
 toba Farm Loans Association. The same principle 
 exactly applies to repayment on land through the 
 Soldiers' Land Settlement Board. 
 
 When the principle of amortization is explained 
 clearly to farmers, they readily see its advantages. 
 This is one simple illustration of what I mean by 
 saying the farmer needs financial education. There 
 is scarcely a Board meeting of a Rural Credits 
 Society, but anywhere from one to a half dozen 
 farmers are instructed in better farm finance. 
 Nearly everywhere I go now, farmers come to 
 discuss, and, if possible, get advice on rearranging 
 their financial affairs. I had the privilege last 
 Thursday (January 8th) of inviting the delegates 
 
 at the Manitoba Grain Growers' Convention to 
 this convention. From the time I stepped off the 
 platform until my train left, over some two hours 
 later, I was being continually asked for just such 
 information as this. 
 
 Last spring a society loaned money to a farmer 
 who owned much city property; in fact, had been 
 a contractor. He did not reveal all the facts about 
 the encumbrances on his city property at that time. 
 This fall he asked for a renewal, but the Board 
 found variations in his new statement and refused 
 to give it. We asked him to see the secretary and 
 myself before the next meeting. We went carefully 
 over his affairs and showed him the advantage, 
 first, of taking a mortgage loan on his land and 
 clearing up some of his farm creditors. Then we 
 showed him how he should dispose of certain par- 
 ticular city property for which there is a good 
 demand at present. He is endeavoring to do so, 
 and when this is done, instead of burdening himself 
 with worry and enormous interest charges, his 
 position will be vastly improved. 
 
 I had the privilege of writing for the Christmas 
 issue of the Nor'-West Farmer an article on "Hovv 
 to Borrow Money." The response to that article 
 showed me there is a demand for that kind of 
 thing. A month ago, in Dauphin, I fell into con- 
 versation with a young member of the Rural Credits 
 Society. This man told me the whole history of 
 his financial experience from the day he started 
 farming on his own; how he had established and 
 Tcept his credit strong with his bank, and all about 
 his present position. We talked it all over, and I 
 was able to show him how, by some rearrangement 
 of his affairs, he could greatly improve his position. 
 I saw him again a week ago, and he has decided to 
 do this. On my last trip to Swan River I fell into 
 conversation with one of the brightest farmers in 
 Manitoba. He has a large farm, splendidly equip- 
 ped, and a good herd of pure-bred cattle. This 
 man runs his place according to schedule: He 
 opened up to me and told me his financial difficul- 
 ties. Within half an hour he had decided on a 
 certain course of action that will not only save him 
 much money, but will enable him next summer to 
 carry out certain building plans he had intended 
 to put off for two years. 
 ENCOURAGES FARMERS TO WATCH EXPENDITURE 
 
 A man in our Rural Credits Society borrowed 
 $1000.00 last spring. He came before the Board 
 in December, requesting a renewal. He had made 
 excellent use of his money, but still knew he must 
 show good reason why his loan ought to be re- 
 newed. He brought a complete list of his expendi- 
 tures, even though it was difficult to make out all 
 the items on account of his limited knowledge of 
 English. Against these he had marked those not 
 paid. The latter he had then placed in a separate 
 list with his land payments, taxes, etc. In a 
 rough style he had prepared a picture of his financial 
 position. He had never before prepared anything 
 of this kind, but the fact that he must demonstrate 
 to the Board some good reason for requesting a 
 renewal made him do something he never thought 
 of before. 
 
 The pleasure of doing some of these things is 
 one of the greatest attractions of Rural Credits 
 work, and every field man on the Rural Credits 
 staff can duplicate these instances. 
 
 I claim that this kind of work is a vital part of 
 state education, as important as research and the 
 
38 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 application of the sciences to farming. Hence I 
 claim that a larger proportion of funds for agricul- 
 tural education in all the provinces of Canada could 
 better be spent for education on farm finance and 
 farm management. At present nothing to speak of 
 is done outside the bare courses in economics and 
 farm mangement at our agricultural colleges, and 
 in some provinces very little of that. It is exceed- 
 ingly difficult to get men to do this kind of work, 
 but putting it off does not help, and I know of no 
 kind of extension education that would meet with 
 such a ready response among farmers. 
 
 It is partly to satisfy this demand and thus 
 increase our service to Manitoba farmers, but 
 chiefly to facilitate the work of the societies and 
 cut down the work of the secretary and the Boards, 
 that central office is going to make a special effort 
 to educate every borrower and member of all 
 operating societies in better farm finance at the 
 annual meetings this month and in February. We 
 propose to have a representative of central office 
 attend each meeting, as well as a shareholders' 
 meeting, of each new society before it commences 
 operations. Each of these men will be furnished 
 with a "Statement of Affairs" on linen, as shown 
 here. Incidentally, blue prints of this will be pro- 
 vided for the office of any secretary who desires one. 
 With this statement, he will go into detail on the 
 filling in of statements and encourage each farmer 
 to take an inventory, whether he borrows or not. 
 We will provide the forms. He will explain the 
 advantage "for instance of a long term mortgage 
 loan, why land and equipment should not be over- 
 valued, how essential it is that all liabilities be 
 carefully marked down, how it handicaps a man to 
 present a statement showing tax arrears, the 
 importance of showing the acreage to be sown to 
 crop, etc. The proper method of filling in applica- 
 tion forms will be shown. The absolute necessity 
 of meeting paper when due will be emphasized, 
 and, in short, this will be made a one-session, short- 
 course in farm finance. 
 
 PERSONAL KNOWLEDGE OF BORROWERS 
 ESSENTIAL 
 
 We are also preparing printed material designed 
 to educate directors along the line of credit granting 
 which he can study at home. There is no intention 
 whatever of trying to make directors individually 
 loan experts, but merely to get them acquainted 
 with the whys and wherefores. In actual practice 
 the great thing for a director to know is the char- 
 acter and ability of the applicant for a loan. If 
 you can give definite information or good indica- 
 tions of these points, you have done the chief 
 thing in granting the loans that you have been 
 appointed for. Directors should never take chances 
 on recommending in any way men they do not 
 know. Would you lend him your own money, or 
 would you wait and investigate him further? 
 That's the test. If you apply that rigidly — and 
 it should be applied rigidly — you will have 
 little difficulty. Some imagine directors are 
 supposed to be credit experts. Individually this is 
 not true. Personal knowledge of the applicant is 
 essential. Such with searches, if necessary, assures 
 the veracity of his statement. With this informa- 
 tion credit granting is not very difficult. 
 
 At present for most efficient administration we 
 have the field divided up into different areas. We 
 are arranging directors' and annual meetings in 
 series, so that all can be attended by a representa- 
 
 tive of central office. Your co-operation is needed. 
 In this connection, let me caution you against 
 having too many directors' meetings. These are 
 not necessary, and to have them does not inculcate 
 in borrowers some of the things we want to develop 
 in them, viz., the quality of foresight and the 
 making of definite plans early in the season. 
 THE GRANTING OF CREDITS 
 
 Under the direct head of granting credits, I do 
 not intend to say very much, except to mention a 
 few things I have come to look upon as essentials. 
 Beyond this, every case is an individual case, and 
 has to be dealt with solely on its merits. No prece- 
 dents can safely be laid down in credit granting. 
 Precedents would either endanger credit or destroy 
 individuality. Rural Credits Societies place in the 
 hands of Boards of farmers the granting of credit, 
 and the credit requirements of no two farmers are 
 alike. You cannot say we will lend only a certain 
 amount of money in any case. If you do so, you 
 do injustice to some men or retard development. 
 You also do yourselves injustice in the minds of 
 the members. There aire restrictions and safe- 
 guards of certain kinds, but not precedents. 
 
 The chief restrictions should be in regard to 
 breaking land, e.g., in some societies the rule is laid 
 down that a definite amount of money will be paid 
 over when a certain amount of breaking is done, 
 and the borrower gets a signed statement from the 
 director in his locality that the breaking has been 
 done. In Lawrence that was done, and I find 
 the sentiment growing in favor of it. It could not 
 probably be applied in all cases, but it could be 
 much more widely adopted. Where there is any 
 doubt about the industry and initiative of the 
 borrower it should be rightly applied, no matter 
 how honest he is. 
 
 Another restriction that is widely adopted, but 
 not as closely insisted upon by Boards as might be, 
 in my opinion, is where money is loaned for dis- 
 charging certain liabilities to machine companies or 
 for stock or store bills, etc. In more cases the 
 borrower should be made to turn over original lien 
 notes or original or duplicate receipts to the society 
 to ensure payment. It removes temptation to 
 misuse of money, and while it may sound as though 
 it might make some touchy borrower more touchy, 
 it saves future worry. This cannot always be 
 done, but it can be and should be done to an even 
 greater extent than at present. 
 
 Speaking of the readiness of borrowers to get 
 touchy and to go to the bank to borrow, there is 
 a little too much fear on the part of Boards and 
 secretaries of this happening. It reminds me of a 
 man who recently borrowed $75.00 from a bank 
 on a false statement. He came back for another 
 loan shortly, and when the banker demurred, he 
 used the old bluff, "Well, if you don't give it to 
 me, I'll get it somewhere else." This man couldn't 
 have borrowed a collar button elsewhere, and the 
 banker promptly "called" him by telhng him, if 
 the other loan was not paid when due he would 
 have him arrested. The nonchalance with which 
 certain borrowers who could not borrow elsewhere 
 use this threat is remarkable. 
 
 In my opinion, no Board should let the idea of 
 a man borrowing money elsewhere influence it in 
 the shghtest, except, possibly, to refuse the credit 
 if the point is used as a threat. Societies are better 
 without such borrowers. They can be of no real 
 strength to a society. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 39 
 
 CENTRAL IDEA IN GRANTING CREDITS 
 
 In granting credits the central idea for a Rural 
 Credits Board to keep in mind is: "Will the money 
 be used for a productive purpose? Will the opera- 
 tion be a profitable one? Will the borrower be 
 made richer financially, and a better citizen?" 
 Unless these questions can be answered in the 
 affirmative, no loan should be granted. If the 
 enterprise is not a profitable one a Board is doing 
 a borrower an unkindness by getting him further 
 into the hole. If a borrower is operating a farm 
 which, after it is broken up, cannot be made profit- 
 able, what is the use of giving him money to break 
 it? You are simply confining him to prison for a 
 period. It is advice, not money, such a man needs. 
 If a man gets a loan for a tractor which he cannot 
 profitably operate, or while he has a surplus of idle 
 horses, no matter what the certainty of getting 
 back the money, I submit to grant the loan is a 
 mistake, because the borrower is being done an 
 unkindness. He needs advice. A certain borrower 
 last year applied for a credit of $500.00 to pay out 
 a small tractor for breakine scrubby land. He was 
 refused the loan. 
 
 (1) Because the tractor was too light for the 
 particular breaking. 
 
 (2) Because the man knew nothing of tractors, 
 and had no mechanical bent. 
 
 (3) Because he had three idle horses that would 
 idle all summer. He was advised to buy another 
 horse and break with horses. 
 
 He negotiated the loan through the local bank, 
 which took Victory Bonds as security. He broke 
 only a few acres with the tractor, and is a wiser man 
 to-day. 
 
 Satisfy yourselves on the man's character. No 
 loans should be made to men whose reputations for 
 honesty are anything but the best. My opinion is 
 that rule should be inflexible. You cannot afford 
 to deal with questionable characters. Yours is 
 not a profit-making institution. You are lending 
 on a co-operative basis to help only those worthy 
 of help, and dishonest or too indolent people do 
 not deserve loans. Of course there are many men 
 whose initiative is dormant for lack of capital, and 
 to whom credit means new life and arribition. 
 But these are generally soon found out. 
 
 Ability is something like honesty. A man who 
 will plainly never make a success of farming should 
 not get credit. 
 
 TITLES AND RECORDS SHOULD BE SEARCHED 
 
 Satisfied as to the character, ability and produc- 
 tive purpose of the loan, a correct statement, of 
 course, is necessary. If there is any doubt about 
 a man's statement at all, it should be carefully 
 verified by searches in the Land Titles Offices or 
 County Court, the borrower paying the cost. The 
 society cannot afford to pay these charges. I do 
 not know of any comphcations resulting from any 
 failure to do so, but I think additional care should 
 be taken. I realize it has been difficult to do this, 
 owing to the fact that heretofore it has not been 
 necessary to guarantee the vaUdity of lien notes 
 by registering them in the County Court. 
 
 In connection with verifying statements. I 
 know some borrowers are apt to become impatient 
 to get their loan. Well, patience is a virtue which 
 will bear exercising in this case. Loans should 
 never, under any possible circumstances, be hurried 
 at the expense of safety. Some of you may be 
 
 thinking of seed grain loans. There is no reason 
 why such cannot be applied for earlier. Such 
 loans at the last minute are an evidence of lack of 
 foresiirht on the part of the borrower. 
 
 With these facts in hand in sizing up these state- 
 ments, I first look at the realizable chattel security, 
 stock and implements, and against that the floating 
 debts. There should be a good margin of the 
 former. No one can say how much it should be 
 in each case. Cases vary, but it should be such 
 that in case of contingency, there would be ample 
 margin to realize on with all costs of such pro- 
 cedure and considerable over that, as depreciation 
 must always be considered on stock and implements, 
 and in this country depreciation is heavy. Such 
 depreciation is something not usually taken suffi- 
 cient cognizance of in my opinion by Boards. If 
 you had to carry a loan for two or more years, and 
 you will sometimes, depreciation becomes a very 
 serious factor. That is particularly so at present 
 in stock, when blackleg and hemorrhaegic septicemia 
 are so prevalent. In Lawrence Municipality the 
 mortahty among horses this year from glanders, 
 swamp fever, chlerostomes, etc., has been very 
 serious. 
 
 ATTITUDE OF OWNERS OF LAND VERY IMPORTANT 
 
 The time payments are due on certain chattels 
 and particularly on land, is very important. Our 
 new statement form brines this out very clearly. 
 We think we can still improve this form, and will 
 next time they are printed. The kinds of people 
 to whom the moneys are due is very important. 
 The ideal conditions for a mortgage loan is in the 
 Manitoba Farm Loans Association. Half crop 
 payments are very bad, and should be handled very 
 carefully, but when an aoolicant is in arrears a 
 Board should satisfy itself completely as to the 
 attitude of the owner of the prooerty. 
 
 The equity in land is valuable and important, 
 but with a vast number of loans in Manitoba, it 
 is so small as not to be worthy of serious considera- 
 tion. I think it is over-emphasized too many times 
 in credit granting. Borrowers certainly over- 
 emphasize it by putting speculative value on farm 
 lands, particularly at the present time. 
 
 To me the very important thing is the careful 
 conservative estimate of what the borro.ver's 
 incorne may be in the fall, and what debts must 
 be paid out of this income. This is very important, 
 and is not sufficiently considered by Boards. 
 Possible income must be figured very conservatively, 
 for failure may come, as it has in many places this 
 year. But this is the most vital feature, always 
 provided there is a margin of security to guarantee 
 repayment in case of emergency. It is vital to 
 try to see the position of the borrower six months 
 or one year or even two years ahead. Repayment 
 is vital, and repayment and the man's best interests 
 can only be best assured by keeping in mind the 
 borrower's position far ahead. 
 
 Labor supply is an important factor. The man 
 who abuses and mistreats his own family is a 
 poorer credit risk because his labor supply is more 
 uncertain and less efficient. 
 
 CREDIT GRANTING NOT THE ONLY WORK OF 
 DIRECTORS 
 
 Let me here lay some emphasis on the importance 
 of watching the progress of borrowers, and ho!f the 
 money is spent. While the intention has always 
 
40 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 been good and the fulfilment generally good, some- 
 times directors could complete this work more 
 fully by watching more closely the uses to which 
 loans are actually put. The duty of directors does 
 not end at the close of a Board meeting, but extends 
 throughout the season, until the loan is paid off. 
 After all, the number of loans you grant, where 
 great care and judgment is necessary, are not very 
 numerous. If each director will keep tucked away 
 in his memory all such cases in his locality and 
 bring them out for dusting just occasionally, the 
 Board's efficiency will be greatly helped. If it 
 seems burdensome at any time, you have to "-emem- 
 ber that this is one of the most difficult times in 
 Rural Credits administration. In a year or two 
 the experience you have gained will give you 
 confidence to deal with problems that might prob- 
 ably make you nervous now. This is being demon- 
 strated in practice and Boards are increasing in 
 efficiency of service to their communities. 
 
 Occasionally men feel timid about becoming direc- 
 tors for fear any difficulty might arise in collecting 
 or otherwise dealing with borrowers. I wish to 
 point out that the position of a Rural Credits 
 Society in going after a delinquent borrower or a 
 rnan who has misappropriated money, is entirely 
 different from that of a bank, individual or other 
 profit-making money-lending institution. When 
 the latter has to adopt drastic measures to effect 
 collection, public opinion is nearly always on the 
 side of the weaker party, sometimes even when he 
 deliberately defrauds. But in the case of a Rural 
 Credits Society, public opinion is the shareholders 
 themselves, who have their uncalled stock at stake. 
 PubKc opinion is reversed, and sides with the 
 creditor at the expense of the debtor. 
 
 SOCIETY SHOULD PROTECT THE BANK 
 
 Here I would like to mention the fact that, in 
 all your dealings you should be careful to protect 
 the lender of the money, i.e., the bank, so long as 
 your own security is not impaired. Recently a 
 society took second mortgage on a borrower's land, 
 had included in it a debt of $1500.00 owing to the 
 same bank as the society was dealing with. 
 This society could have taken the mortgage only 
 to secure its own loan, but it protected the bank. 
 But it did not endorse the bank's notes, and rightly 
 so, though the bank manager requested this. 
 
 Last spring a borrower who had $1000.00 from 
 a Rural Credits Society secured by the society's 
 lien, borrowed another $500.00 from the bank, 
 which had recently been opened, in which the 
 society's account had been transferred. The party 
 turned out bad. He was somewhat shifty. On 
 arrival at this point I drove at once to his place, 
 and for half an hour made him one of the most 
 uncomfortable men in Manitoba. To impress on 
 him the absolute necessity of making no dissipa- 
 tion of his assets, we took the additional precaution 
 of registering a chattel mortgage against him to 
 secure the two loans. Now, part of both loans is 
 cleared up, and all will be collected. That is what 
 I mean by protecting the bank. We have done 
 this a good many times. 
 
 LIMIT THE AREA OF OPERATIONS 
 
 I cannot lay too much emphasis on directors 
 limiting the area of their operations. There is 
 real danger in operating over a large area. Doubt- 
 ful loans will always practically be found among 
 those not sufficiently kno«n. A large area, too, 
 does not best serve the community idea. Several 
 
 societies have grown too large, and have had to 
 be divided up. Robhn, Eriksdale, Ste. Rose, 
 Lawrence, are Uke that. Swan River is in that 
 position now, and division is urgently needed, as 
 the membership is around 110. 
 
 There is another difficulty in having too large 
 a society. It takes too much of the directors' 
 time at one meeting. Usually directors deal with 
 all the business on hand at a meeting, and too long 
 sessions are apt to become tiresome. I have never 
 heard a complaint, but the condition can be im- 
 proved. 
 
 Looking over delegates and directors at this 
 convention from the forty Rural Credits Societies 
 now in operation, and remembering those directors 
 who, for lack of funds or shortage of labor, have 
 not been able to attend, I want to do one thing for 
 myself and colleagues on the Rural Credits staff 
 who are directly connected with practical work 
 among you. I beUeve no one except those borrowers 
 to many of whom Rural Credits have meant new 
 hopes and ambitions, can speak with the first 
 hand knowledge of this feature, that we can. I 
 want, in passing, to pay a tribute to the directors 
 of Rural Credits Societies in Manitoba who have 
 given such practical and unselfish service to their 
 neighbors, to their community, province and 
 country. In my humble opinion, no kind, of public 
 service in this country has so seized the imagination 
 of the men in it and been responded to so splendidly 
 as that of serving the community on the directorate 
 of Rural Credits Societies. A large percentage of 
 directors have no practical or personal need for 
 loans through societies, though an increasing 
 number are using this method of financing. Yet 
 these men meet, and frequently from 10 a.m. or 
 2 p.m. to late in the afternoon or far into the night, 
 in the Manitoba winter, often in none too com- 
 fortable quarters, carefully discuss and worry over 
 the individual problems of their next-door neigh- 
 bors who need assistance. They are not paid, they 
 could not be paid for such service; they have not 
 even asked for expenses. 
 
 To the men on actual field work from central 
 office, the greatest inspiration of all Rural Credits 
 work is meeting and fraternizing in a directly 
 practical way with men enjoying such a measure of 
 confidence from the community. Personally, to 
 meet and work with the various Boards, that it 
 has been my privilege to be a member of, has been 
 the richest experience of my life. It has cemented 
 and bulivarked an already firm confidence in the 
 rural public spirit of Western Canada. It has 
 shown me that lying latent in the hearts of the men 
 of this country there is an hitherto almost untapped 
 national resource, which could, if properly developed 
 and utilized, make the problems of Manitoba and 
 Canada but mirages. You are helping to lay the 
 foundation for a great co-operative commonwealth. 
 
 At the same time I wish to caution you to patience. 
 Do not expect too much demonstration of apprecia- 
 tion of your services from the community, for that 
 rarely comes in the measure it should. You are 
 not looking for this, and you will generally only 
 receive in public gratitude but a small part of the 
 great services you render. Your reward will be 
 the greatest of all rewards, the knowledge of true 
 community service well rendered. And you must 
 not expect too great or immediate results. Econ- 
 omic co-operative currents generally run slowly 
 but with irresistible force. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 41 
 
 Experiences of Boards of Directors in Handling 
 
 Credit Problems 
 
 Chas. H. afford (in the Chair) : 
 
 "At this morning's meeting we want to get an 
 expression from different directors as to the prac- 
 tical problems they have faced in the various 
 societies. The work of the Rural Credits Societies 
 is growing all the time, and the problems the 
 different Boards are meeting are growing too. We 
 have here a list of the directors we shall call upon 
 this morning, and we intend to confine ourselves 
 strictly to the program. I know some of the 
 directors here will desire to ask Mr. Weir some 
 questions. Before commencing, I want to thank 
 the directors present for the splendid service they 
 have rendered to the various Boards they belong 
 to. It is not commonly known to the public that 
 the services of these directors are not only rendered 
 free, but they are out of time and out of pocket in 
 the matter of railway fares, etc. I do not think 
 the public really appreciates the work they are 
 doing, and, as I say, doing free. Some of them 
 have to drive 10 and 15 miles, and especially in 
 the winter time, with the thermometer at 30 below, 
 to attend meetings, and occasionally it is 10 and 
 11 o'clock before they get home. Too much praise 
 cannot be given to the directors of the Rural Credits 
 Societies of this province. 
 
 "I wish to extend my hearty thanks to you, 
 gentlemen, for the services you have rendered and 
 the wonderful work you are accomplishing through- 
 out the province. I am going to ask you to adhere 
 to the program we have this morning." 
 
 SOLVING PROBLEMS AT ROBLIN 
 
 John Arnoll (President Roblin R.C.S.): 
 
 "In his address Mr. Weir said there should be no 
 precedent laid down in granting Rural Credits 
 Societies' loans, and then made free with the rules 
 himself in his address (laughter). Most of his 
 rules were all right, however. One thing he did 
 not lay enough emphasis upon is the absolute 
 necessity of having sand on a farm before you can 
 make a loan on it. Some of you who live in the 
 blown-out districts may qualify this truth. We 
 find it is absolutely necessary, before we can make 
 a loan, that there should be a certain amount of 
 sand. A farm without sand and the best system 
 of book-keeping that can be had will be an absolute 
 failure. We have found that out. And the sand 
 must be in the man, not necessarily in the soil. 
 
 "As far as meeting vvith difficulties is concerned, 
 we met with them right from the start. In organ- 
 izing the first Rural Credits Society in Roblin dis- 
 trict, the difficulty we faced was a rather curious 
 one, but we were made well aA'are that it existed. 
 When we had our Board of Directors elected and 
 appointed, we found we had six men opposed, and, 
 three in favor of Rural Credits Societies. 'However, 
 that was overcome. Some of the men who at that 
 time v\ere most bitterly opposed have since become 
 some of our largest borrowers and most enthusiastic 
 members. 
 
 "I am not so sure that we had any other very 
 serious difficulties. Mr. Weir referred to a case 
 
 where a man, after taking up a homestead, applied 
 for a loan on it. He was a first-class man, so, 
 although we turned down his loan application, »ve 
 advised him we would grant it if he would get on 
 a better farm. We did not feel justified in loaning 
 our money on that farm, because it was a worthless 
 proposition. So he got his $10 back and ceased to 
 be a member. I do not know whether that was a 
 mistake on our part or not. There was another 
 case, which I give for variety's sake, where the 
 applicant for a loan was a good man and in not 
 bad circumstances, but after a long discussion we 
 turned his application down because he was a born 
 trouble-maker — always in trouble with his neigh- 
 bors — and for this reason would never make a real 
 success of his farm. Of course, in this case, that 
 was simply the final consideration that turned the 
 balance against him. The other feature of the 
 case was this — that he had bought, or was intending 
 to buy, his farm on half-crop payments from a firm 
 of real estate men. These real estate men — who 
 did not believe in Rural Credits Societies — would 
 sell the farm, so much down, and take a chattel on 
 the man's live stock and implements, and tie him 
 up good and tight. That was one of the features 
 that caused this loan to be turned down. 
 
 "We had another case (I do not know whether 
 you would call this trouble or not), where the same 
 real estate firm sold another man the same kind of 
 land under the same conditions. We did not turn 
 the loan down. We passed the loan, on condition 
 that the members of this real estate firm sign the 
 notes. That real estate firm is on that man's notes 
 now, and will be until they are paid. That was no 
 trouble, that was a pleasure, because we enjoyed 
 getting them there. 
 
 "There is another case I have in mind that 
 might be described as trouble. A young man, just 
 starting out, bought a half-section of land from a 
 reliable man on terms. To carry on his operations 
 on it, he needed a pretty large loan. We gave him 
 the loan. He was inexperienced and inclined to 
 'plunge.' To make assurance absolutely sure, we 
 took a note, payable on demand, and we told that 
 man, practically speaking, that if he bought any 
 more implements or horses or anything without 
 consulting our secretary and Board of Directors, 
 that note would be due and payable right there 
 and then. It turned out to be a good thing for 
 him, because he had a partial crop failure, and was 
 not able to meet his note promptly. The disappoint- 
 ing feature in the case was this — that, while we 
 thought we had a man who had lots of ambition 
 and initiative, we had overlooked to a certain 
 extent that element of 'sand.' He needs encour- 
 agement now, and we are encouraging him the best 
 we can. 
 
 "Here is another case. Some few years ago, two 
 men were in partnership up there. They dissolved, 
 and one sold his farm. The purchaser came to us 
 to borrow the money to pay. We loaned him the 
 money. Shortly after that, the man from whom he 
 bought the farm wanted his farm back again. His 
 partner operated a threshing machine in that 
 neighborhood, and threshed all around our borrower 
 
42 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 and left him out. The former Oivner thought that 
 in this way he could force the purchaser to give 
 the farm up. Things began to get pretty interest- 
 ing. We took the matter up with the Manitoba 
 Farm Loans Association, and secured a mortgage 
 loan for him in record time. We saved the situa- 
 tion. That man was being pinched unmercifully, 
 in a way that no man has any right to be. We were 
 able to help him out. 
 
 "Last year, or the year before last, we had an 
 appUcation for a loan of nearly $1000 to purchase 
 a tractor. That was unanimously turned down by 
 the Board, but the man was notified that we would 
 give him some money to purchase horses. He came 
 back in the fall and thanked us for giving him the 
 money on that condition. He bought two teams 
 of horses, did his breaking in fine shape, and is 
 now a firm friend of the Rural Credits Society. 
 
 "When a man withdraws from a Rural Credits 
 Society, it is always a sorrow to me. When we lose 
 a man from the society, I always feel that somehow 
 or other there should be a way to keep that man in 
 the society, and help him to be a better farmer. 
 After all, that is what we are there for. Just 
 another case: A man became a member of our 
 society, and applied for a loan. In making out his 
 application, I found that he had borrowed money 
 from an old line mortgage company, had neglected 
 to pay the interest, and had practically a notice of 
 foreclosure. Now that man, I am told, was a first- 
 class farmer. He said, T have had to teach myself 
 to write and read.' He had advanced by his own 
 efforts. I wrote out his application for a loan 
 from the Manitoba Farm Loans Association, and 
 he secured it immediately. These are instances 
 where you can help a deserving man." 
 
 Mr. Easlabrook (Secretary-Treasurer Swan River 
 Rural Credits Society): 
 
 "Our society has run two years. We had diffi- 
 culty in getting the society started, and also in 
 getting the Rural Council to help us out. However, 
 we overcame that and got going. We have not had 
 much trouble with our loans. 
 
 "One case in particular I would like to mention. 
 A gentleman worth quite a lot of money, had a lot 
 of it invested in city property, upon which he owed 
 considerable. He had a loan from us, and applied 
 for a renewal of it, as he had a rather poor crop. 
 We renewed the loan temporarily, and took a new 
 statement from him. I think this is important, 
 to take a new statement where a renewal is over a 
 small sum. The nevV statement showed that, 
 though he had heavy obUgations on other than his 
 
 farm property, he also had good equities in th?s? 
 properties, and that a rearran'^ement of his finances 
 would put him in good shape. We called him in 
 and Mr. Weir and myself discussed his whole 
 financial situation carefully. We showed him the 
 great advantage of disposing of certain property 
 and unloading heavy interest charges, and ths 
 advisability of getting a long term loan on his 
 land at a lower rate. From being somewhat 
 resentful of our inquiring fully into his affairs last 
 sorine, he became keenly appreciative of the fact 
 that the Board was only interested in helping him, 
 and that the members of the Board were his genuine 
 friends. This man needed education in finance as 
 well as money. 
 
 "A poor man got a small loan, and we renewed 
 it. He came back and wanted another small loan. 
 He had three or four pieces of farm machinery that 
 he had not paid for. Part of the money would pay 
 for these and give him a clear title to them. Another 
 part of the machinery was a five-furrow plow. The 
 directors approved of a loan sufficient to pay for 
 the pieces of machinery upon which he could get a 
 clear title, but they would not loan him money to 
 make a part payment on the plow, because in that 
 case there would be not security, the plow not 
 being paid up in full, and the implement man 
 having charged him too much for the plow in the 
 first place. The latter came kicking to me, saying 
 we were discriminating in loaning him money to 
 pay on some of his machinery and not on the plow. 
 I tried to explain to him, but he persisted in taking 
 a biased view. But we were loaning to help the 
 borrower and not to encourage the purchase or sale 
 of machinery or other things at prices too high, or 
 those unsuited to the purpose. 
 
 "We had another case of a man who borrowed a 
 few hundred dollars to buy cattle. He bought the 
 cattle and we renewed his loan, a $500.00 one. About 
 May he sold his farm. He was going to take these 
 cattle away and go to some other part of the pro- 
 vince. I found out that he was going to move out. 
 I told him he would have to pay his note before he 
 moved. He got very angry. He still had some 
 grain, and started drawing it in, but I tied up his 
 grain. He was going to ship his cattle out, but I 
 informed him he came under the Bulk Sales Act, 
 and the society would exercise its rights under that 
 Act. He paid his note forthwith, and though 
 what he said about the Rural Credits Society wasn't 
 very flattering, it didn't worry us, because we had 
 the money and found him out. But we have to 
 take these things as they come." 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 43 
 
 What the Individual Owes to the Community 
 
 Dr. E. Leslie Pidgeon 
 Pastor Augustine Church, Winnipeg: Former President of the Associated Rotary Clubs of the World 
 
 Rev. Dr. E. Leslie Pidgeon, Augustine Presby- 
 terian Church, Winnipeg, spoke on "What the 
 Individual Owes to the Community." He said: 
 
 "This is a subject with which I am familiar. 
 When I used to be a country minister I remember 
 driving to a blacksmith's shop in order to get my 
 horse shod. Upon executing the order, the black- 
 smith said he had to pay a good deal of money for 
 the shoes, and added: 'That is where you fellows 
 have the advantage. We have to pay a good deal 
 for our stock, and with you fellows it is just wind, 
 and there is plenty of it.' Some people think that 
 is how the minister goes along. They seem to 
 think that he has just to take the platform or the 
 puloit and out comes the speech. But I have no 
 such repository of speech. Everything that I have 
 done has cost me not only hours but days of toil. 
 I rather think that if my blacksmith friend only 
 knew that I spent thirty days on a speech and 
 re-'i' rote it thirty times, he would not have spoken 
 in the way he did. 
 
 "The responsibility of the man to the community. 
 I believe there is no greater responsibility a man has 
 than the responsibility in regard to the common 
 life of the people around him. If I were asked 
 V hat I consider the most popular fallacy of the 
 ordinary practical man, I would say it is this, that 
 he has only a very obscure and imperfect idea of 
 how much is taken from the community in which 
 he has grown up and of which he is now a citizen 
 and member. There are many otherwise good 
 rren who believe that the community and the 
 individual are more or less independent of each 
 other, and that if only the community would go on 
 minding its own business and allow the individual 
 to do the same, there would be a kind of mutual 
 arrangement that would be mutually beneficial. 
 That is some people's idea of the relationship of 
 the community to the individual. What these men 
 are overlooking is this: That practically everything 
 a man has to-day he has by virtue of the common 
 life of the people that surrounded him and that 
 surround him now. Let every man endeavor to 
 put this down on a piece of paper: Let him put on 
 one column everything that he brought into the 
 vorld, and let him put in the other column every- 
 thing that he has taken froni community life, from 
 the ideas and the character and the institutions and 
 the customs of those around him. Now, the first 
 thing he is going to get is a great surprise. He is 
 going to find out that he brought nothing into this 
 world but just the sheer power to respond to the 
 touch of environment. It has long been an argu- 
 m.ent as to whether heredity or environment is the 
 greater force in life, on the individual. I am sure 
 you have all heard of the debates on this question 
 at the old debating societies. What is the matter 
 with the argument? I will tell you. It is absurd, 
 just because it divides two things that cannot be 
 divided without having no meaning whatever. 
 They are different parts of the whole. You cannot 
 imagine a circumference without a centre, and you 
 caimot imagine a centre without a circumference. 
 The circumference is equi-distant from the centre 
 and the centre is equi-distant from the circumference. 
 
 They are both essential to a circle. Moral environ- 
 ment means nothing at all apart from heredity and 
 vice versa. What does moral environment mean to 
 the dog? It has no existence because the dog did 
 not inherit any moral capacity. I have not got 
 time to go into this subject as I would like. Let 
 me bring you to the conclusion. The conclusion is 
 that no moral quality which might be transferred 
 by heredity can give you capacity, whether great 
 or small; whether that quaUty is turned to moral 
 good or moral evil depends wholly upon the environ- 
 ment absorbed by the individual. There is danger 
 of your misunderstanding me. There is the dif- 
 ference of temperament. You may have the highly 
 strung nerve of the Highlander, or the steady nerve 
 of the Anglo-Saxon. It is noticeable in the different 
 members of one's family. It may be easier to spoi' 
 one than another because of that difference ol 
 tempe'ament. It may be easier to lead one righl 
 than the other because of the difference in nervous 
 responsibility. But you can have a good highway 
 and a bad highway to the centre. Temperament 
 does not decide the question. Temperament can 
 be turned to moral good or moral evil. You may 
 take a little child just at the age when intelligence 
 is beginning to dawn, say three or four years of 
 age. He has no intelligent life whatever, except 
 in-so-far as he has responded to the common life 
 about him, and according to the way in which he 
 has responded is his character formed. When I 
 talked about this to one good mother, she said: 
 T can't believe that. I know little Jacky Smith, 
 and if he is not a chip off the old block I never 
 knew any one that was.' 'Well,' I asked, 'where 
 was little Johnny Smith brought up?' She began 
 to see the point. 'Why, at home, with John Smith, 
 his father,' she said. So the little child was brought 
 up at home and had all his intelligent Ufe brought 
 into being by the environment of his home. She 
 saw the home being reproduced in his personality, 
 and she called it heredity, but I call it environment. 
 
 possibilities of environment 
 
 "Take tivo things. Take the cranial capacity 
 inside of the skull of the modern European or 
 American or Canadian, and it exceeds the capacity 
 of the aboriginal Australian or bushman, being 
 40 cubic inches. Some of you perhaps did not 
 think you had such cranial capacity, but you have 
 — whether it is full or not. Forty cubic inches is 
 the hereditary capacity of the civilized human 
 being or of the white race. That is why the modern 
 man, if he turns his attention to evil, can do worse 
 evil before breakfast than the aboriginal Australian 
 can do in a life-time. That is why pessimists think 
 the world is getting worse, because men of great 
 capacity, like the German scientists, if they turn 
 their attention to rascality, will give you a brand 
 of it that is entirely new. Yet we must not over- 
 look the fact that good is advancing just as truly 
 as evil. What we have to recognize, however, is 
 that evil is a capacity that comes from environ- 
 ment. You know that experiments have been 
 carried on in Europe, especially in the British Isles, 
 at London notably, which have brought the experi- 
 
44 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 menters to this conclusion, that you can take a 
 little child, even one who is the offspring of criminals 
 for three or four generations in succession, and that, 
 granting the one thing that he is physically sound, 
 can take him away when he is three months old — 
 not three years, because there is trouble then, as 
 personality has been called out in the direction of 
 his home — and place him in a modern home where 
 the environment is entirely different, and he will 
 show no tendency to follow the criminal life of his 
 progenitors. If you leave him longer at his own 
 home, his intelligent life is started in a certain 
 direction. Or, if he goes to school, and another 
 boy tells him the people looking after him are not 
 his parents at all, and points out to him his real 
 home, he may begin to take an interest in the 
 family there and let his mind develop in that 
 direction. If the conditions are as I have men- 
 tioned, however, he shows no tendency to follow 
 the criminal instincts of his progenitors. Some 
 years ago a great Methodist evangelist, Mr. Jones, 
 was preaching in Toronto. A man came up to him 
 after the sermon, and after complimenting him on 
 the sermon, said: 'There is one thing I cannot 
 understand, and that is, why a man of your Scrip- 
 tural knowledge and your apparent common-sense 
 is a Methodist and not a Baptist.' 'Well, you 
 know,' Mr. Jones replied, 'I will tell you how it 
 could have been avoided, although I am afraid it 
 cannot be altered now. If your mother and my 
 mother had exchanged babies, it would have been 
 all right.' I want to tell you that that statement 
 is substantially true. Just as there is a common 
 atmosphere in which we all grow up and breathe, 
 so there is a common life, with common concep- 
 tions of right and wrong relationships. 
 
 "My point is, everything you want to put into 
 the individual you should want to put into the 
 community. You may stop and ask me what does 
 this mean for community service? In my opinion, 
 it is just on such a conception of society as that 
 that all community service can be based. If what 
 I have said is true, then it follows that nothing 
 should find a lodgment in the laws or institutions 
 or customs of the community that you don't want 
 reproduced in the character of your boys and girls. 
 That is the negative side. The positive side is that 
 absolutely everything that you want reproduced or 
 manifested in the character and life of the boys 
 and girls must be put into the community, its 
 customs, institutions and laws. There was an 
 idea that the more evil through which a man 
 steered himself in hfe and came out reasonably 
 clean and unscathed, the stronger moral character 
 he was. There are people who believe that yet. 
 They will put a man into the worst environment, 
 and if he comes through unscathed, all the better. 
 No one who knows the scientific development of 
 character believes that, however. I tell you that 
 we are made morally weaker by every vile thing 
 that we have ever seen and by every vile story 
 that we have ever heard. It stores our minds with 
 bad imagery, and that imagery recurs at times of 
 weakness, to our ruin. I asked a great psychologist 
 once what I could do for a growing boy. He said : 
 'The very best thing you can do for a growing boy 
 is to store his mind only with good imagery, because 
 the older he gets the more will that imagery of 
 childhood recur to him to strengthen him in his 
 time of need. The opposite is also true. The 
 worst you can do for a growing boy or a growmg 
 
 girl is to store that growing mind with bad images, 
 because these bad images — whether they come 
 from bad actions in the community or bad stories 
 that are heard or bad literatuie or bad pictures of 
 life thrown on the screen at a moving picture 
 house — thrown upon the improperly developed 
 mind, recur to the general weakening of the char- 
 acter.' That brings us to the general conclusion: 
 You can't be too careful of your community. The 
 community should be the means of developing 
 moral character. It is one of the greatest institu- 
 tions. You may take a great educational institu- 
 tion. It will lay down the .principles and the ideas, 
 but these will be interpreted by every growing boy 
 and girl, according to how they are lived out in the 
 community in which they live. 
 
 HOW TO TELL RIGHT FROM WRONG 
 
 "I want to tell you of great duties which such a 
 conception of society imposes upon the individual. 
 In such a society it is the relationship of one to the 
 other that binds the individual to the community. 
 If he owes everything from the debtor side, what 
 does he owe from the other side? It is, a positive 
 contribution to society. Regarding individual 
 virtue, if what I have said is right, a man cannot 
 avoid the conclusion that no man can commit a 
 private wrong without the whole of society being 
 injured. The life of each individual forms- a part 
 of the whole society organism. What is an organ- 
 ism? It is composed of different oarts which per- 
 form different functions, each of which, however, is 
 essential to the common hfe. Suppose we had a 
 httle tree. It is composed of different parts, such 
 as the root, the stem and the flower, each perform- 
 ing a diffe ent function, but the performance of 
 each different function being necessary for the 
 common life of the tree. According to the vvay in 
 which each different function is performed does 
 the tree grow and bear fruit. That is what I claim 
 about society. No man can do wrong in his indi- 
 vidual life and make it an individual thing. It 
 roust be a matte-- that affects the comnaunity as a 
 whole. A certain man raised this question: 'How 
 can I know whether a thing is right or wrong?' It 
 is not always easy to know what is right and what 
 is wrong. Simply because we wish along a certain 
 direction, however, we begin to build up arguments 
 in favor of it until we have absolutely persuaded 
 ourselves that it is right. I have come to the 
 conclusion that there is no one you can deceive so 
 quickly and- so long as yourself. But you again 
 ask: 'How can I know whether this is right or 
 wrong?' Universalize it. Just imagine every other 
 man in the community doing the same thing. 
 Make it a universal action for all others to follow, 
 and then ask yourself: 'Is it going to strengthen 
 society or weaken it?' If you cannot hand out 
 your individual action, and make it universal 
 without weakening society, then it is not a moral 
 action upon your part. Each man must act socially. 
 If he is an organic member of the community his 
 individual action must be a contribution to the 
 common life of the whole." 
 
 Dr. Pidgeon related an incident, as a result of 
 which a shoemaker told him: " 'I would not make 
 much at your profession, but for 25 years I have 
 endeavored to put into every little, humble piece of 
 work that has gone out of this little, humble shop 
 my highest conception of what is right, and my 
 feelings of good will to all mankind.' He was a 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 45 
 
 humble man, doine humble work, but he was a 
 great democratic citizen. I care not where a man 
 works, or whether his resources be large or small, 
 he is filling his place in the community only when 
 everything goes forth from him as an expression 
 of his highest conception of Ufe and of his feelings 
 of good will to all mankind. My second message 
 is that you must labor unselfishly to put your 
 private ideas of right into your public law and 
 your public institutions. We have got to learn to 
 take a larger interest in our community life and in 
 everything that is expressive of the life and actions 
 and ideals of the people. It is a marvel to me how 
 evils that are so patent and th^t are so generally 
 deplored continue to exist. The third point I 
 would leave with you is that you must seek the 
 welfare of all people at all times. In my opinion, 
 such an organization as you have could do magni- 
 ficent work along the lines I have indicated." 
 
 BEST CONVENTION EVER ATTENDED 
 
 Walter Ireland, Binscarth: "I just wish to say 
 a little along the lines on which the Rev. Dr. Pid- 
 geon has spoken. We all have more or less that 
 community spirit, especially the gentlemen who are 
 attending this Rural Credits Convention. In the 
 
 30 years in which I have lived in the province, I 
 have attended many conventions and meetings of 
 all sorts, but I think I am safe in saying that I 
 have never attended one that did me so much good 
 or that will have such far-reaching powers for good 
 as this convention of the Rural Credits Societies 
 throughout the province. We must not overlook 
 this fact, that Mr. Prout fathered the scheme in 
 this province. He did not get all the help he 
 needed and that he should have got at the start. 
 It is all right now. He has got plenty of help. I 
 was one of those who looked at the matter in a 
 sort of half-hearted way. Now I am glad that we 
 got it, and I am sure Mr. Prout will admit that 
 there is no more ardent supporter of the movement 
 than your humble servant. I would like to move 
 a hearty vote of thanks to the many speakers you 
 have heard at this convention." 
 
 Cyril Tucker, in seconding, said: "The directors 
 have spent a lot of time working for the good of 
 their neighbors and the good of the community, but 
 they all feel that, though they have made a sacri- 
 fice, they have all received great benefit from so 
 doing, not only from the community spirit stand- 
 point, but from the standpoint of the education 
 they have received." 
 
 m 
 
46 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 The Importance of Fire and Hail Insurance 
 
 Major N. J. Black 
 Manager Insurance Dept., United Grain Growers, Lid., Winnipeg 
 
 I wish to briefly present to you the subject of 
 insurance under two heads, dealing with the subject 
 in its particular application to fire and hail insur- 
 ance: First, the growth of insurance, and, second, 
 the place insurance has in modern commercial life. 
 
 Insurance started practically with the develop- 
 ment of man from the savage state. When fore- 
 thought and co-operation became factors of human 
 consideration, laws were made, and the earliest on 
 record, dating back to a thousand years before 
 Moses, were on the subject of insurance. Fore- 
 thought is the earmark of civilization, co-operation 
 is the pathway of society; jointly they express 
 themselves in provisions for insurance. 
 
 The Greeks developed marine insurance. In 
 Enriand, before William the Conqueror, Thanes 
 Guilds carried insurance against fire, theft, flood 
 and death. So well accepted was the idea that in 
 a speech opening the first Parliament of Queen 
 Elizabeth, the following reference appears: "Doth 
 not the wise merchant in any adventure pay a part 
 to have the rest assured?" 
 
 Almost any history of insurance, however, par- 
 ticularly fire insurance, commences from the Great 
 Fire of London. At that time an office was opened 
 to insure dwellings and stores, and did a thriving 
 business. It is interesting that the idea of state 
 insurance soon came to the front, with the result 
 that the Council of London passed a law agreeing 
 to insure all its householders at much less than the 
 Company at that time operating. This was not 
 carried out, as the courts subsequently decided that 
 the city did not have the powers to do this under 
 its charter. The history of insurance is full of 
 interesting stories which time will not permit me 
 to recount. Fire brigades started with the insur- 
 ance companies, and in London one sees to-day 
 some of the old signs placed on buildings to sho v 
 the companies insuring them. This was to guide 
 their fire brigades so they would not waste their 
 energy on buildings in which they had no interest. 
 
 These and many other experiments gradually 
 made it clear that, with increasing hazards and 
 comphcations, a definite effort must be made to 
 place insurance on a basis as near an exact science 
 as the nature of the unforeseen element in it would 
 permit. From this emerged what we kno-v as 
 Under A-riters' Associations, and the companies 
 belonging to them commonly called "Board Com- 
 panies." Whatever of criticism one may level at 
 them from time to time, they must be credited with 
 immense and far-reaching efforts to arrive at the 
 cost of insurance under all conditions, over wide 
 areas, and covering long periods of time. Their 
 work has made insurance a business instead of a 
 gamble. Their work embraces the fixing of rates 
 at which all classes of fire risks may be reasonably 
 
 carried, as well as the conditions of fire protection 
 under which it is safe to undertake the hazard. In 
 this way they have made a real beneficial contribu- 
 tion to the commercial and economic hfe of the 
 community at large. 
 
 Mutuahty doubtless expresses most clearly the 
 basic principle laid down for all insurance, i.e., 
 forethought and co-operation. It has developed in 
 many directions, but most successfully in connec- 
 tion with farm risks. This is because the elements 
 of uncertainty or hazards are more clearly definable 
 in isolated farm risks than in places of congested 
 population. 
 
 INSURANCE MAKES COMMERCE SAFE 
 
 Now, as to the place insurance holds in modern 
 commercial life. Let me first make the statement 
 that so closely is it identified with every business 
 transaction, that every suit of clothes you buy, 
 every hat or pair of boots, includes in its price the 
 cost of insuring it against the various hazards to 
 which it has been exposed until it is placed in your 
 hands. No commercial transaction which involves 
 a promise to deliver, or pay, at a future date, is 
 possible without an insurance policy. The lender 
 is prepared to accept your promise to pay, but is 
 not prepared to stand the hazard that a fire or 
 other catastrophe may wipe out your earning power 
 or destroy the results of years of effort. He there- 
 fore requires an insurance policy on your buildings 
 or your crop. An advance on a car of grain could 
 not be obtained at your bank if facilities were not 
 available which protected that bank against the 
 destruction of the security they hold, the value of 
 the grain, from the time it leaves your hands until 
 it reaches the consumer, possibly across the contin- 
 ent and the ocean. Your local storekeeper could 
 not buy his stock from Winnipeg or other markets, 
 nor, in fact, could any contract be made with 
 certainty, because the unknown element of catas- 
 trophe might destroy a person's powers to pay or 
 deliver. Insurance bridges the gap and makes the 
 pathway of commerce not only possible but sound. 
 
 Whatever is economically true for the community 
 and country must apply with equal force to ths 
 individual, and, likewise, that which is good citizen- 
 ship on the part of the individual must stand the 
 test of its applicability to the community. 
 
 A farmer to-day with, let us say, $7,000.00 in 
 buildings and equipment, and $4,000.00 in crop, 
 may save $200.00 in any one year by not insuring. 
 He may come out without a loss. But is his action 
 worthy of a good citizen? He may call himself 
 lucky, he may even deem himself clever as he 
 scans his extra $200.00, but is hs not very near the 
 line of mental view-point from which our fore- 
 fathers departed at the dawn of civilization? 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 47 
 
 Let me point out in closing: Insurance is only 
 possible because the many insure. Whether by 
 Board Companies or Mutual Companies, co-opera- 
 tion is the basis. No man has ever been known to 
 go broke because he carried insurance. No com- 
 munity has ever been less prosperous because the 
 well-to-do, those so-called "able to carry their 
 own risk" insured along with their poorer neighbors, 
 even if for no other reason than one of duty to his 
 fellowmen. As a national proposition insurance is 
 good citizenship; in a community it is one of the 
 
 modern expressions of the familiar instruction to 
 "Bear one another's burdens;" as an individual 
 proposition it is good business. 
 
 Insurance has been likened to the balance wheel 
 on an engine. It creates no power, and operates no 
 machinery, but it maintains the rhythmic motion 
 by taking up unforeseen strains and shocks. Insur- 
 ance is an essential part of every business transac- 
 tion and enterprise. It is as necessary to the 
 existence of our commercial life as the woof thread 
 is to the fabric of the loom. 
 
 m 
 
48 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 The Value of Farm Records and Accounts 
 
 A. H. Benton, M.S. 
 Professor Farm Management and Rural Economics, Manitoba Agricultural College 
 
 Farm records and accounts may be divided into 
 simple accounts and cost accounts. Simple farm 
 accounts include an inventory at the beginning and 
 end of the year, records of cash expenses and receipts, 
 and a summary at the end of the year. Farm cost 
 accounts include not only the foregoing records, 
 but also feed, labor and production records. 
 
 It has been found most satisfactory, as far as 
 farm accounts are concerned, to take the inventory 
 March 1st and April 1st. At this time the farmer 
 is looking forward to the coming farming season, 
 and has usually disposed of all grain and feed not 
 necessary for feeding his stock until next crop. In 
 the last few years, however, a new factor has 
 entered, namely, the reports required under the 
 Income War Tax Act. These are required for the 
 calendar year, and for this reason January 1st is 
 a very logical time for taking inventories. 
 
 An inventory is an itemized Ust of property 
 owned, with values assigned to the various items. 
 The value of an inventory consists of at least three 
 things: 
 
 First — All other records deahng with divisions of 
 the farm business are incomplete and almost 
 valueless without it. For example, a record show- 
 ing large receipts from live stock conveys little 
 information unless the amount and value of the 
 live stock on hand at the beginning and end of the 
 year is known; hkewise, large expenses on produc- 
 tive enterprises mean little unless considered in 
 relation to the inventory. 
 
 Second — The difference between inventories at 
 the beginning and end of the year will show the 
 Pnancial progress or lack of progress made during 
 the year. It will not give any indication however, 
 of where gains or losses have occurred or the 
 amounts of the expenses or receipts. 
 
 Third — ^A comparison of the divisions of the farm 
 inventory will give an indication of the stability 
 or the change in the character of the business. If 
 one inventory shows a much larger investment in 
 cattle than the previous inventory and a smaller 
 investment in horses, it would indicate a change 
 toward a more productive use of the capital invested 
 in live stock, and possibly a substitution of tractor 
 for horse power. 
 
 Next to the inventory in importance are the 
 records of cash receipts and expenses. These 
 records should include cash receipts and expenses 
 on crops, machinery, live stock and live stock 
 products, such as eggs and milk. They are valuable, 
 first, because they show where the cash receipts 
 come from and where the expenses are incurred. 
 They may also indicate profitable enterprises or 
 sources of loss; for example, the amount paid for 
 labor might show at a glance that it was too large 
 for the size of the business. Second the cash 
 expenses and receipts records furnish a large part 
 of the details asked for in the income tax reports. 
 Third, a record of cash business transactions fre- 
 quently serves to protect a person in case of dis- 
 agreement over the payment or non-payment of 
 accounts. 
 
 A record of notes and accounts payable and re- 
 ceivable is easily kept, and is equally as important 
 
 as cash records. Outstanding obligations often 
 change seeming profits into losses. 
 
 Crop production records, time of seeding, and 
 amount of seed used, are not necessary in simple 
 farm accounts but they are highly desirable. They 
 give the history of past operations, and enable the 
 farmer to decide on the best farm practice. There 
 is a best way of doing things, and this record helps 
 one to find it. 
 
 A simple set of farm records including inven- 
 tories at the beginning and end of the year and 
 records of expenses and receipts make it possible 
 to summarize the business for the year. The final 
 statement should show the total value of the farm, 
 the receipts from live stock and crops including 
 increase of inventory and also expenses with 
 decrease of inventory in case there is any. The 
 difference between the total receipts and total 
 expenses can then be secured, this difference is 
 known as the farm income, and shows the return 
 above operating expenses for the work of the 
 farmer, and the earnings on the capital invested. 
 In business organizations the salaries of all those 
 employed are included in expenses, and the amount 
 left over is profit; the rate of interest earned on the 
 capital invested may then be calculated, and it 
 serves as a measure of profitableness of the business 
 enterprise. This system cannot be used, however, 
 in the average farm business. Those interested in 
 farm management or in the business side of farming, 
 have found it impossible to satisfactorily calculate 
 farm profits in a similar manner, since the farmer 
 is not paid any regular salary and there is no 
 standard by which it can be accurately estimated. 
 To overcome this, the interest is calculated on the 
 farm capital at that rate of interest which could be 
 secured for the money in an equally safe invest- 
 ment. This amount is deducted from the farm 
 income and the amount remaining is the return 
 to the farmer for his labor and management, and 
 is called the operator's labor income. 
 
 RECORDS HELP TO SECURE LOANS 
 
 A set of records as outlined will enable the farmer 
 to make a satisfactory statement to the bank, the 
 Rural Credits Society or a land mortgage loan 
 organization in case he wishes to borrow money. 
 In other words, farm accounts aid farmers in 
 securing both long and short time loans. A set ot 
 records will prevent the farnrer's daily routine 
 from obscuring the essential idea in up-to-date 
 farming, namely, efficiency in farm operations. 
 
 High net returns, either from increased produc- 
 tion or reduced cost, or better still, a combination 
 of the two, are essential to the best development of 
 rural Ufe and prosperity. A set of farm accounts 
 is one of the essentials in attaining this goal. The 
 time required to keep a simple set of farm records 
 as outlined will not be burdensome. Farmers have 
 time if they can be convinced that the time spent 
 is well paid for and an essential part of their busi- 
 ness, l^ive or ten minutes a day, except when 
 inventories are being taken, or when the annual 
 summary is being made, is entirely sufficient on 
 average farm.s. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 49 
 
 As stated, a set of cost accounts, including the 
 records already discussed, should be kept, but in 
 addition to these, there are labor, feed and pro- 
 dUctioh records. The labor and feed records entail 
 much more work than the cash receipts and inven- 
 tory. The summary also is much more in detail, 
 but the data that may be secured is well worth the 
 effort to the farmer who is deeply interested in the 
 work, and who will devote the necessary time to it. 
 The most valuable point in favor of farm cost 
 accounts is that the farmer has definite data for 
 determining the profitable or unprofitable portions 
 of his business. To find out if a class of live stock 
 is paying, or which one of several classes is paying 
 best, the cost of feed and labor must be accurately 
 known, as they make up the two largest items of 
 expense; the necessity for feed and labor records is 
 thus apparent. Labor records enable the farmer to 
 find the amount of horse and man labor required, 
 and the time at which it is required. The labor 
 problem may b'e carefully studied and plans evolved 
 for more efficient use of the labor. Feed records 
 will show how much grain or feed was used during 
 the year, and in what proportions it was fed; the 
 acreage of crops needed and the amount of grain 
 and feed for the coming year can then be more 
 accurately estimated. By comparing gains on 
 stock one year, and the kind and proportion of 
 feeds used, with the gains made on stock another 
 year, and the kind and proportions of feed used, 
 the farmer is able to decide on the most profitable 
 system of feeding. 
 
 In making a summary, not only must inventories 
 and cash receipts and expenses be considered, but 
 also the horse and man labor, the machinery and 
 equipment charges, interest on amount invested in 
 live stock, rent on the land, and general expenses, 
 such as taxes and insurance. A complete set of 
 cost accounts must include household accounts, so 
 far, at least, as the household affects the farm busi- 
 ness. All farm products used in the household 
 should be credited to the enterprise furnishing them. 
 The total will often be surprisingly large, and make 
 a favorable balance on some enterprise otherwise 
 seeming unprofitable. 
 
 Decisions in regard to the business based on cost 
 accounts must be made with great care; for example, 
 the beef cattle enterprise may show a loss using 
 the ordinary farm prices for feed and the 
 usual rate for farm labor, but if the cattle were 
 disposed of, a large amount of the feed would be 
 unused and bring in no return at all; likewise labor 
 used during the winter would remain idle. The 
 manure received in addition may be one of the 
 sources of profit in crop production. 
 
 All progressive farmers keep some records, and a 
 number are finding it necessary and profitable to 
 keep simple farm accounts as outlined. The more 
 involved system of cost accounts will be used only 
 by the few who are willing to put in the extra time 
 on them in order to secure the additional and more 
 detailed information. 
 
 g 
 
50 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 Live Stock Markets and Marketing 
 
 stock Yards Act— Various Yards in Operation— Importance of American 
 Markets— Market Quotations— Co-operative Shipping 
 
 D. M. Johnson, B.S.A. 
 Supervisor of Stock Yards, Dominion of Canada 
 
 As prescribed under the Live Stock and Live limit the right of any drover, farmer or other 
 
 btock Products Act, 1917, regulations are now m person to sell his own live stock at any stock- 
 
 torce which make provision for the Federal control yards; or the right of any farmer, drover or other 
 
 ot stock-yards. These regulations are admirastered person to buy live stock at any stock-yard." 
 
 by the Live Stock Branch of the Dominion Depart- In all this Act gives the Dominion Government 
 
 ment of Agriculture, through the Chief Markets supervision over all the live stock markets in 
 
 Ufhcer at the various stock-yards, under the direc- Canada that now exist or may in future be built, 
 
 tion ot the Supervisor of Live Stock Yards. The so that the markets may be open for persons who 
 
 regulations under the Act became effective on may wisn to use them. Complaint may be inves- 
 
 August 21st, 1919. These regulations dealt with tigated and reforms instituted if necessary. This 
 
 the construction and equipment, operation and should give confidence to the producers of live 
 
 maintenance of stock-yards. Under the heading of stock in Canada 
 
 Ss™ari°aske'd^: "^'^'P"''^^' ^^^ f°^l°"'"g '"''^"'- union stock yards, st. boniface, man. 
 
 (1) Stock-yards to be suitably constructed. The Province of Manitoba possesses one of the 
 
 (2) Plans of alterations or additions submitted. finest stock yards in Canada, situated in the city of 
 
 (3) Suitable covered buildings. St. Boniface. Prior to 1913 the only live-stock 
 
 (4) Water supply. market in the province was the Canadian Pacific 
 
 (5) Office accommodation. Railway yards on Logan Ave. West. These yards 
 
 (6) Weigh scales with type register beam. had been built for a good many years, and it was 
 Under the heading of operation and maintenance, seen that the live-stock industry was about to 
 
 some of the most important points are: grow very rapidly, and new yards would have to 
 
 (1) Unloading and delivery of stock. be erected. The three railway companies, namely, 
 
 (2) Ascertaining off-car weights. C.P.R., C.N.R. and G.T.P., formed a company 
 
 (3) Live stock to be handled to prevent injury. known as the Public Markets, Ltd., to build and 
 
 (4) Feed and supplies and prices. operate a stock yard served by direct connection 
 
 (5) Operation of scales. with each road. In the fall of the year 1913 the 
 
 (6) Complete record on scale ticket. Union Stock Yards, St. Boniface, was opened for 
 
 (7) Fire insurance. business, managed and operated by a company not 
 
 (8) Record of stock sales. ' interested in the buying or selling of live stock. This 
 
 (9) Record of receipts and disposition. company was incorporated by special Act of the 
 
 (10) The loading out of stock. Manitoba Legislature, the Government having one 
 
 (11) Disposition of deads and crippled animals. director on the Board of Directors. The growth of 
 Under the Act a Live Stock Exchange is required these yards has been exceedingly rapid, and the 
 
 at each stock-yard. The rules, regulations and capacity of the yards has been trebled by con- 
 by-laws of each Live Stock Exchange must be struction carried out during the past three years, 
 approved by the Minister of Agriculture for Canada The following table will show the amounts of hve 
 before such exchanges may operate. stock handled to date: 
 Some new conditions are set forth, Cattle Hogs Sheep Horses 
 
 (1) Every commission merchant must become a 1914 110,452 461,889 15,017 5,928 
 
 member of the Live Stock Exchange. 1915 138,534 484,997 13,801 6,214 
 
 (2) Commission merchants must give a Bond for 1916 158,949 317,821 20,590 10,761 
 
 $10,000.00. 1917 286,651 372,168 23,579 13,574 
 
 (3) Each scale ticket must have full information 1918 320,207 362,675 38,762 7,951 ■ 
 
 on it, including the price and correspond to account 1919 367,944 268,628 53,372 6,025 
 
 (4) Complaints may be registered against any 6 Years. 1,382,737 2,268,178 165,121 50,453 
 member of the exchange under subsection "B" of (3,866,489) 
 
 the regulations under the Act. The company owns 200 acres of land, of which 
 
 (5) The rates of commission are approved by the about 50 acres are now used for pens, loading and 
 Minister. unloading platforms, storage space, trackage and 
 
 (6) All rules, regulations or by-laws cannot be buildings. At present the yards have: 
 rescinded or altered or no new regulation put into 77 loading and unloading chutes, 
 force without the consent of the Minister. 750 cattle pens. 
 
 One of the main points under the Act is that all 15 cattle corrals, 
 
 stock-yards are made free and open to every 130 hog pens, 
 
 person. 80 sheep pens. 
 
 Subsection 2 of Section 3 of the Act reads as The yards have a capacity for: 
 
 follows: 10,000 cattle. 
 
 "Nothing in this Act or in any regulation made 6,000 hogs. 
 
 hereunder shall take away or in any manner 4.000 sheep. 
 
RURAL CREDITS SOCIETIES OF MANITOBA 
 
 51 
 
 There are four large stock scales for weighing 
 stock, equipped with type register beams. In the 
 yards, there are five and a half miles of alleys, six 
 miles of sewers. The company operates its own 
 switch engine and maintains six and a half miles of 
 tracks. For supplying water the company has an 
 artesian well with a capacity of 600 gallons per 
 minute. For taking water about the yards, there are 
 five miles of water mains and 300 valves at hydrants. 
 For fire protection there are 10 fire hydrants avail- 
 able. 
 
 PARTIES OPERATING ON YARDS 
 
 There are thirteen commission firms and about 
 twenty-five live-stock dealers operating on the 
 yards. All the large packers have buyers on the 
 market. To facilitate prompt handling of business, 
 the Yard Company allocates certain pens to each 
 dealer, so all the latter's business will be concen- 
 trated at one point. All railroads have direct 
 access to the yards, the C.P.R. entering on the 
 west end, C.N.R. and G.T.P. on the east side of 
 the yards. The Stockyard Company derives its 
 revenue from yardage charges and from the sale 
 of feed. All charges are approved under the Live 
 Stock and Live Stock Products Act. 
 
 Yard.age — Cattle 25c 
 
 Calves... 15c 
 
 Horses . . 25c 
 
 Hogs 07c 
 
 Sheep 06c 
 
 Loading cars $1.00 per car 
 
 Through billed car 2.00 per car 
 
 Feed charges and supplies for each calendar 
 month shall be determined by adding to the whole- 
 sale market price for the preceeding month a per- 
 centage plus a fixed charge for handhng added. 
 The charges are all filsd before the tenth of each 
 month 
 
 IMPORTANCE OF AMERICAN MARKETS 
 
 Since the placing of an embargo against Canadian 
 cattle entering England for feeding purposes, a very 
 large trade has sprung up with the United States. 
 This export trade has been heavy from both Eastern 
 and Western Canada. This past year the shipments 
 from Western Canada have been extremely heavy, 
 Oiving to the drought in Saskatchewan and Alberta. 
 Under normal trade conditions Western Canada 
 has a steady trade with the country south of us 
 through the South St. Paul stockyards. American 
 cattle feeders have found that Canadian feeders 
 respond rapidly to feed consumed, and prove to 
 be good money makers. The Canadian feeder 
 steer has thus found a place in the feed lot of the 
 corn belt states. The following table shows tne 
 extent of our exports to United States from the 
 Union Stock Yards, St. Boniface: 
 
 Exports to 
 Receipts U.S.A. Per Cent. 
 
 1914 110,4.52 33,7C9 30.5 
 
 1915 138,534 63,783 46. 
 
 1916 158,949 34,119 21. 
 
 1917... . 286,651 52,013 18. 
 
 1918 320,207 77,459 24. 
 
 1919 367,944 145,146 39. 
 
 These figures reveal the fact that during the 
 first part of the war cattle liVere not in a great de- 
 mand in Canada, and our export trade flourished, 
 during which time too many stocker cattle were 
 shipped from the West. During 1916-1917 cattle 
 
 prices were rapidly advancing, and our packers were 
 anxious for beef to fill war contracts. Western 
 stock raisers were also anxious to buy stockers and 
 feeders, as cattle were always advancing in price, 
 and the business looked good from every stand- 
 point. During 1918 prices reached the high point, 
 and with the termination of the war, coupled with 
 falling prices, the Western stocker trade was not 
 nearly so good. To take care of our surplus, which 
 was increased by a certain amount of liquidation, 
 owing to bad crop conditions, the American market 
 helped considerably to give our producers a good 
 market. It might be pointed out, the American 
 feeder buyers want first quality cattle, owing to 
 these cattle being fed on high priced land, with 
 high priced feeds, they are not open to buy inferior 
 stock. If the Western farmers are raising feeder 
 cattle, they must keep quality in mind, as other- 
 wise the prices realized for stockers or feeders will 
 not be what it should be. It is not good poUcy for 
 this country to export stocker cattle. They should 
 be raised on the farms, so that they become feeders 
 or light butcher cattle. During the past year the 
 stock marketed at the St. Boniface Stock Yards 
 was disposed of as follows: 
 Local East West South 
 
 122,971 67,977 31,889 145,146 
 
 33.4% 18.4% 8.7% 39.5% 
 
 These figures show that during 1919 the largest 
 percentage of our stock was shipped to points in 
 the United States. One thing to bear in mind is 
 that all cattle marketed should have quality and 
 size. For many years to come Western Canada 
 will sell a large percentage of feeder cattle. Let 
 what we offer for sale help to further our position 
 as raisers of good quality cattle. There are too 
 many ill-bred, half finished cattle being marketed 
 in Western Canada every year. 
 
 Farmers must realize thoroughly that they can 
 no longer depend entirely on the grass which nature 
 has so abundantly provided, but must supplement 
 their pastures with feeds cheaply produced, which 
 will prevent loss during winter or in summer when 
 chmatic conditions are unfavorable. The most 
 successful stock raiser of the future will be he who 
 studies and works out means and methods of in- 
 creasing the carrying capacity of his grass lands, 
 grows crops which will yield the largest amount 
 of nutriment per acre; harvests and stores his feed 
 in the best manner, supplementing concentrates 
 when necessary to increase its efficiency. In 
 addition to his ability as a farmer and feeder, he 
 must possess a sufficient knowledge of live stock to 
 select the type of cattle which will most economically 
 turn the products of his farm into meat and at the 
 same time be a desirable feeder, and when marketed 
 make a first-class carcass. Another factor which 
 will contribute to his success will be a study of 
 market conditions, so his product may be cashed 
 when most in demand. Stockmen who thor- 
 oughly master all phases of the business, and change 
 their methods and ideas as new conditions confront 
 them, will be able to compete successfully with 
 others who cling to old ways. The Uve-stock 
 business is one that demands a large investment of 
 brains as well as capital. The cost of producing 
 beef, although never constant, may be reduced by 
 the apphcation of business methods to the problem. 
 Clear thinking is needed in this era of high beef 
 prices, if producers are to get the proper returns. 
 Perhaps the main thing needed is for every beef 
 
52 
 
 RURAL CREDITS SOCIETIES OF MANITOBA 
 
 producer, no matter how small or large his opera- 
 tions, to consider carefully the experience of the 
 best live-stock farmers in his community. During 
 times of high priced beef, live-stock men sometimes 
 get into the habit of breeding everything that will 
 produce. The real purpose of the meat-producing 
 business is to raise a maximum number of pounds 
 of good meat, and not breed a huge number of 
 skinny animals. Pounds of quality beef and not 
 the number of animals should be the keynote in 
 the movement for high class live stock. Get rid 
 of the scrub bull. There are far too many in the 
 province to-day. 
 
 MARKET QUOTATIONS 
 
 As the public stockyards are the centres where 
 supply and demand are best indicated, and where 
 an index to the general live-stock conditions can 
 best be secured, representatives of the Dominion 
 Live Stock Branch are stationed at all the large 
 central live-stock yards in the Dominion. These 
 officers, specially selected for the work, classify all 
 the live stock offered for sale, according to quality 
 and price, ascertain and make a record of the point 
 of origin of the stock from each province, record 
 actual sales, ascertain average prices, and report 
 on the conditions under which sales are made. 
 This information is forwarded to Ottawa by mail 
 and telegraph, and is recorded, co-ordinaLed, ed.ted 
 and used as a source from which a weekly market 
 news service is derived. These reports prepared at 
 the Department, which are in general use by the 
 farm press of Canada, cover the grading, average 
 price, price range for the bulk of sales, and top 
 price of all live stock marketed at the stockyards 
 situated at Montreal, Toronto, Winnipeg, Calgary 
 and Edmonton. Weekly comments are given in 
 detail on the supply, demand arid distribution of 
 the livestock after selling, whether to the packer 
 and butcher trade, shipment back to country points, 
 or on export account. In addition to the weekly 
 markets report, the Division is now supplying a 
 daily telegraph news service to the daily press of 
 Canada over the wires of the Associated Press. 
 Recognizing the value of standard quality reports 
 from an impartial source, dealing with standard 
 grades, the daily press in Canada are taking full 
 advantage of this service, which it is hoped will do 
 much to keep the farmer and the trade in close 
 touch with their market. In Western Canada the 
 markets representatives supply the local press with 
 all sorts of information covering transactions in the 
 yards. In addition to the daily service for the 
 newspapers, there exists an inter-stock-yards tele- 
 graph service. As soon as the day's market is 
 established at each stockyard, the markets repre- 
 sentative wires the analysis of the conditions at 
 his yards to the other yards. This information is 
 posted in a conspicuous place, so that all interested 
 in the purchase and sale of live stock may have 
 proper knowledge of conditions on the other stock 
 yards. Telegraphed reports of conditions on the 
 American markets in-so-far as they influence prices 
 on Canadian stock yards, are received from Buffalo, 
 St. Paul and Chicago markets during the heaviest 
 market days of the week. These telegrams are 
 posted on a bulletin board in the exchange building. 
 
 CO-OPERATIVE SHIPPING OF LIVE STOCK 
 
 Co-operation in the marketing of farm products 
 of all kinds has been the practice of European coun- 
 tries for many years. Up to the time of the war. 
 
 nearly every kind of farm produce was marketed 
 imder the co-operative plan. Why was it neces- 
 sary to adopt this method? In Europe the agricul- 
 tural land is limited in extent and thus extremely 
 expensive to purchase. The countries were thrown 
 into cbmpetition, with new nations with cheaper 
 lands. And sb they were forced to adopt more 
 economic methods. They worked out and adopted 
 various co-operative enterprises. The increased 
 price of land in our own country is giving rise to 
 the same conditions which forced organization of 
 co-operative associations in Europe. If the Western 
 farmer is to successfully compete with other nations, 
 and obtain a reasonable rate upon his labor and 
 capital, he must not only resort to scientific methods 
 of production, but must find the shortest and most 
 inexpensive route from the producer to the^ con- 
 sumer. Every unnecessary expense in the distribu- 
 tion of farm products and farm supplies must be 
 eliminated. It appears singular when an analysis 
 of the subject of co-operative marketing is riiade, 
 that so many co-Operative movements should be 
 bom and reared in fields foreign to the shipping of 
 live stock. There are no farm products so easy to 
 market as live stock, yet many highly specialized 
 co-opsrative marketing movements much more 
 complex have been successfully conducted for years. 
 It is singular, then, that the live-stock shipping 
 movement in the co-operative field is so young. 
 Compare live-stock marketing with other co-opera- 
 tive movements. There are to-day co-operative 
 concerns handling eggs, fruits, vegetables, milk, 
 cheese, etc. These associations have found it 
 necessary to construct large storage houses where 
 their products are sometimes held for months until 
 they are sold for the reserved price. This method 
 causes expense, as it is necessary to tie up large 
 sums of capital. All these large co-operative con- 
 cerns have had to spend vast sums in advertising 
 schemes to aid in selling their product. Much 
 attention and expense is given to the method of 
 placing the product before the public. Live-stock 
 shipping is less expensive in nature, as in the first 
 place no capital is needed; it is not necessary to 
 have buildings or a warehouse and no expensive 
 storage problem exists. The whole thing resolves 
 itself down to a quick movement from the farm- to 
 the nearest market of the stock to be sold. It has 
 always seemed very strange that this simple 
 method of marketing has not been used by our live- 
 stock raisers to a greater extent. Very few farmers 
 are able to ship a full carload of stock. The logical 
 conclusion is that several farmers bind themselves 
 together by forming an association for the purpose 
 of shipping co-operatively. This affords the oppof- 
 tunity for the small live-stock producer to be in a 
 position to sell his small offering on the open market. 
 Co-operative selling tends towards the improve- 
 ment of live stock: 
 
 (1) Farmers pay more attention to market 
 reports. 
 
 (2) They are encouraged to raise the grades of 
 stock that bring the best price. 
 
 (3) Tends towards raising pure breds and first step 
 towards community breeding. 
 
 The first step to be taken by an association of a 
 group of fanners for the co-operative shipping of 
 live stock is the engaging of a competent manager. 
 A manager of ability is the mainstay of the associa- 
 tion. He must be honest and capable, possess a 
 
KUKAL CKEDirS SOCIETIES OF MANITOBA 
 
 53 
 
 knowledge of live stock, know how to secure the 
 best results in selling his shipments, and have a 
 grasp of business principles. Too much emphasis 
 cannot be laid on the securing of the right kind of a 
 man for manager. In some cases men who have 
 for years been shipping live stock to the market 
 have become managers of shipping associations. 
 After a suitable manager has been secured and an 
 organization perfected, the next step is to decide 
 from what shipping station shipments are to be 
 made, and on what days. In many places one day 
 in each week is decided upon for a shipping dav. If 
 but little stock is available, once in every two weeks 
 may be sufficient. Farmers who have stock ready 
 to ship report to the manager by telephone or 
 letter, stating the kind, number and \i eight of stock 
 ready for shipment, statine date thev wish to ship. 
 A record of this is made in the office of the manager, 
 and when sufficient stock is on the books, the 
 manager notifies the farmers who have reported 
 the day delivery will be expected at the local yards. 
 On delivery day at the local yards, the manager 
 receives the stock and weighs it. Some places do 
 not have scales, so the stock cannot be weighed. A 
 receipt showing the number of animals, their weight 
 and mark used, is then given each individual ship- 
 per. All receipts for stock received should be 
 made out in duplicate, the farmer receiving the 
 original and the manager keeping the duplicate for 
 his office record. Stock received from each indi- 
 vidual shipper is marked so the animals may be 
 identified at the terminal stock yards. This method 
 is adopted so that each farmer may receive the exact 
 amount his live stock brings on the day it is sold. 
 Most live-stock shipping associations clip Roman 
 numerals on the hips of the cattle and calves with 
 a small pair of scissors, specially made for clipping 
 marks on animals. This is done when the cattle 
 are received by the local manager at the shipping 
 point. Each person shipping in a car is given a 
 number, this number being the one dipped on the 
 animals. In the case of a cow with a small calf 
 at foot, which are to be sold together, the number 
 is clipped on the right shoulder of both cow arid 
 calf. The reason for marking the cow and calf in 
 this way is that it may indicate to the commission 
 man at the terminal stockyards that the cow is 
 not to be sold to the butcher, but she is a milch 
 cow and has a calf at foot. Sheep are usually 
 marked with paint of different colors, and m dif- 
 ferent places, as on the head, the top of the shoulder 
 or on the right or left hip. This is a very simple 
 method of marking sheep. Hogs are not generally 
 marked, but are graded according to weight 
 Hogs between 140 and 250 pounds are known and 
 listed as "selects." The rest are known as 'cut- 
 outs" and consist of sows, heavies, stags and boars. 
 Each owner's cut-outs are marked m a different 
 place, and are described as "green-back," "green- 
 rump," etc. By shipping five stock co-operatively 
 a farmer who may only have half a dozen cattle to 
 sell is able to place these on the market with just 
 the same expense per head as if he owned a carload. 
 
 PAYMENT FOR STOCK 
 
 The manager makes no payment to local shipper^ 
 when the live stock is delivered, but waits until he 
 has received full returns. A complete statement 
 may either be made by the manager or by the com- 
 mission firm handling the shipment. Making out 
 individual statements is called "pro-rating." A 
 small charge is made by the comimission firm for 
 this service. A complete statement gives the selling 
 weight, price per pound, gross proceeds, expenses, 
 net proceeds. Associations have various ways of 
 paying their manager, sometimes he receives a 
 straight salary, and sometimes so much per hundred 
 pound weight. Some associations set aside so 
 much for a sinking fund. This fund if created 
 enables the manager to pay for animals lost or 
 injured in transit. Some associations carry transit 
 insurance. The sinking fund sometimes is used 
 for the building of a shed at the shipping point and 
 for the purchasing of stock scales to be used 
 by the association for weighing. Some co-operative 
 shipping associations use their manager for pur- 
 chasing feeding and breeding stock at the terminal 
 market. Live stock may be purchased by him 
 when he is on the terminal market and taken back 
 for members wishing same. 
 
 Speakers Thanked — Delegates Invited 
 to Opening of House 
 
 Mr. Prout: "There is nothing that I want to 
 say to you now. My heart is just as full as yours. 
 I live in Winnipeg. I meet the citizens of Winni- 
 peg, and those who are the thinkers say that they 
 have never seen a convention of a higher grade of 
 men than this convention. I think I should say 
 that. I believe that. I know that. You are 
 doing wonderful work in the country. You have 
 listened to wonderful speeches here, and to the 
 no less wonderful speeches and talks of your leaders 
 and directors. The session of the House is called 
 for the 22nd January. I wish to say to any director 
 who happens to be in the city at that time, that he 
 can get an invitation to attend the opening of the 
 House if he will write the Rural Credits office. I 
 am speaking on behalf of the Government, which 
 is extending this invitation. The members of the 
 Government are busy just now with the approach- 
 ing session, and receiving delegations. The Premier 
 of the province or the Provincial Treasurer would 
 be here if they were not occupied by the affairs of 
 state. On behalf of the Government, I wish to 
 thank you, and thank you again, for your wonderful 
 attendance, and for your wonderful attention to 
 everything which has happened here. We all of 
 us, Mr. Weir, Mr. Gifford and everybody who has 
 come in contact with you, are immeasurably richer 
 by having been associated with you for these few 
 days. I know you will understand me when I say 
 that I speak with a heart that is full." 
 
 "God Save the King"