Over-Payment:

 

In 1924 the three provincial Wheat Pools set up and controlled a single marketing agency, called the Canadian Co-operative Wheat Producers Ltd. The central organization quickly became known as the Central Selling Agency.

Between declining world wheat prices and poor crops in the summer of 1929, the agricultural crisis was underway even before the dramatic stock market crash that autumn. Though they felt that their initial payment of one dollar was conservative, Pool officials denied concerns over wheat surpluses or financial difficulties:

“The commencement of a new crop year in August 1930 saw the pool directors steadfast in their optimism. Thus, despite a continuing decline in wheat prices, they promised farmers an initial payment of $1/bushel. The stunning drop in world commodity prices in late 1930 made a hash of these calculations. The pools headed for receivership and the farmers for poverty.” [Friesen, 1984, 384-5.]

 

With the onset of the Great Depression, and as a result of the overpayment, the three provincial pools went their separate directions. Small-scale pooling became a fraction of their business, and members were freed from the contracts that had, just years earlier, been so hard won. Saskatchewan's share of the $20 million dollar Central Selling Agency loss was $13,500,000. [Milliken, 15 March 1949.] From then on, the three provincial pools existed as elevator companies but their international marketing system ceased to function. The failure of their own reforms renewed farmer determination to replace the private grain trade with a government-controlled wheat marketing board.” [Friesen, 1984, 337.]

 

Letter from Bennett to McPhail, 1931. 181

“Although its pooling function was over and that informal title was no longer applicable, although it had virtually no employees, it remained in existence as a legal entity, “Canadian Co-operative Wheat Producers Ltd.” Under McFarland that paper corporation would in effect be a powerful government agency, the precursor of the wheat board.” [G. Fairbairn, 1984, 103.]

 

“On 15 September 1949 the Pool handed a $465,169.77 cheque to the Saskatchewan government, ending the long struggle to clear the $13.3 million debt for 1929/30 overpayments to farmers. The once crippling debt was removed two years ahead of schedule, with payment in full of more than $8 million in interest over the 18 years.” [G. Fairbairn, 1984, 164.]

 


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