May 11, 1925

CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

This bill is one of the most important measures before the Parliament of Canada and it deserves our closest study and the most impartial consideration. It applies not only to the producer of grain but to the system of elevators, which really are, in a sense, common carriers; also to the buying, selling and milling of grain. It affects all these interests, and particularly it affects the producer. A revision of the act is due, as I think all will agree. The act as it stands no doubt served a very good purpose, but conditions in Canada with respect to the marketing of grain have outgrown, during the last few years, the provisions of the present law.

While you have ruled, Mr. Chairman, that the introduction of this legislation by resolution comes within the rules of parliament, the method employed does handicap us in discussing the matter at this stage-and I am not saying this in any spirit of criticism. I approach this bill after years of study of the problem, with an open mind and a desire to co-operate with other hon. members in the enactment of legislation that will meet the growing needs of this vast business known as the grain trade. But I say we are handicapped in discussing the matter at this stage. Indeed, I would be willing to let the resolution pass and say not a word except for this: that the bill will go immediately to a committee of which I am not a member-of which, indeed, only a limited number of hon. gentlemen are members; consequently we cannot have much opportunity to discuss the bill until it comes back from that committee. That is one reason why I had hoped that we should have an opportunity at this stage to discuss the general provisions of the legislation. For instance, if the minister had stated that he wa3 going to treat the question of screenings along some general line we could have had a very useful discussion on that phase of it. Then, there is the question of grading. If it were revealed to us at this stage what the government intended to do, a useful discussion might follow which would guide hon. members who are fortunate enough to be on the committee. I would therefore at this stage crave the indulgence of the committee for a few minutes while I very briefly discuss one or two phases of the question. I want the minister and the government to understand that I am not attacking anything, because there is nothing before us to attack. What I say now I offer merely because I shall have no other opportunity of doing so until the bill comes back from the Agriculture committee.

Take the question of screenings. For the last seven years at least in this House I have contended with all t'he vigour of which I am capable that the producer of the graint is entitled to the full value of the screenings that are taken out of his grain when it passes through the elevator. With very few exceptions the producer and owner of the grain has not received anything like the full value of his screenings. In other words-and I do not like to use the word " rob " carelessly, but I can find no other to meet the case-he has been systematically robbed of his screenings. I told hon. members of the House in 1919 when we were discussing the Grain Act, at the time the House was sitting in1 the Museum -and the famous Price, Waterhouse audit of that time disclosed 'beyond any possibility of cavil that the case was as I 'stated it- that the farmer was not getting the value of his screenings at all; in fact, in most eases he was not even getting a Map accounting for any of it. It is possible-and I ask the Agriculture committee to consider this, because I shall not have the privilege of being on that committee-to give to the farmer or producer the full value of his screenings. That was demonstrated for one year-and only for oner year, I am very sorry to say- in the government elevator at Vancouver. For some unknown reason they have abandoned the system and this year have adopted the method followed in other places, that of reoleaning the screenings. Now, suppose a car of grain is brought to a terminal elevator and is put through the cleaning machine. Out of that grain is taken certain refuse, cracked and broken grain, dirt, and so on; or, if it is wheat, there is removed from it oats or other grain seeds. These screenings are the property of the vendor and he ought to get the full benefit of them. The practice is to run the first screenings through the "money making machines," as they are called; extract from them all the valuable feed seeds, and then say to the farmer or the shipper: "Here is a certificate; you can have the remainder,"-which is nothing 'but refuse screenings and in most cases worthless. In fact, hundreds of thousands of tons of this material have been dumped into the lake or burned up or sold for next to nothing. The original screenings, on the other hand, is a very valuable product. So I say that in this revision of the act steps should be taken to provide that the shipper of the grain shall receive the full value of his screenings.

Then, there is the question of overages. I venture to say that it will foe shown by the annual report of the grain commission

Canada Grain Act

for any year during the last ten or twelve years that without a single exception the overages in all the terminal elevators occur in the top grades, No. 1 and No. 2. Now, how is it done? It is well known to a great many I think who have given it study; it is a simple process. In the fixing of the contract grades of grain, there is a margin between the maximum and the minimum of those grades. For instance, we will take No. 1 grade. It is possible to take say two carloads, one near the maximum of No. 1 grade and the other simply No. 2 grade, and to mix those two carloads and still produce at the elevator two carloads of No. 1 grade. That is constantly done; there is no question about it whatever, and the elevator at the end of the year will find itself short of the lower grades, because it will always grade up, and it will find itself over on the upper grades. An examination of the annual weigh-up and of the annual returns of the grain commission upon any terminal elevator will show the correctness of what I am stating. It is almost as regular as the sunrise that the overage will occur in the higher grades, and if there are any Shortages, they will foe in the lower grades.

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PRO

Thomas Sales

Progressive

Mr. SALES:

Does the hon. member include public terminals, as well as private, in that statement?

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Yes, certainly. I am

treading on dangerous ground, I know, in the eyes of some, but I want to say this: I think a public terminal elevator-we will use the term " terminal elevator ", an elevator that is used for the handling of other people's goods; I am not talking now of the private elevator belonging to a flour mill or something of that kind-I think as a matter of right a terminal elevator should not be allowed to make any overages at all. I argued this in 1919, and I want to say to my hon. friends to my left that had it not been for their representatives who were then in the House-

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PRO
CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Here is one (Mr. Knox) staring me right in the face. You had about nine or ten representatives including your late leader, the hon. member for Marquette (Mr. Crerar) who though, well, somewhat regularly absent is an honoured member of this chamber, also Mr. J. F. Reid, formerly the member for Mackenzie, also Mr. Maharg, Mr. Levi Thomson, and one or two others. I am not saying this in any spirit of recrimination

at all; I am merely citing a fact. I took the stand then that there should not be allowed any overages, but these gentlemen took the stand1 that an overage should be allowed, and the result was that the present act was amended in 1919. Mr. A. K. Maclean, now Mr. Justice Maclean of the Exchequer Court, was Acting Minister of Trade and Commerce at the time, and he accepted the advice of the hon. gentlemen to whom I have referred, and the act was accordingly framed to permit terminal elevators to create an overage of one-quarter of one per cent. That may seem a very small amount, but if a railway company, for instance, were allowed to extract from the cars that pass along its lines one-quarter of one per cent of the grain it hauls, it would have a mighty nice revenue at the end of the year. My argument is this, and I submit it in all earnestness and seriousness, that a terminal elevator is a common carrier, just like a railway; it acts the same as a common carrier; it is the liaison between the railway and the water, and passes the grain from the railway into the ship; it is really a part of the carrying system of grain;

I look upon a terminal elevator as a common carrier, with no more right to exact from its earnings a portion of the commodity it handles than has a railway or a steamship.

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PRO
CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

I will come to mixing in a minute. I say they have no right whatever to extract any portion of the goods they are handling in trust for other people.

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PRO

Andrew Knox

Progressive

Mr. KNOX:

Is the hon. member not

somewhat confused in his references to overages and mixing?

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Not at all; I think I understand this. I do not want to be dogmatic.

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PRO

Andrew Knox

Progressive

Mr. KNOX:

I admit the hon. member

knows a good deal of the grain trade for a man not interested in the raising of grain.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

That is a nice little touch, but I am interested in the raising of grain as a matter of fact.

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PRO

John Morrison

Progressive

Mr. MORRISON:

What would the hon.

member recommend doing when the elevator has a shortage? One-quarter of one per cent is a pretty small overage, and if you can find sufficient weighmen throughout the country to weigh as closely as that, you would be a pretty able man.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

I will come to that; it is part of the argument. But I want to establish this first: As a matter of right no elevator

Canada Grain Act

has a right to take a portion of the goods it handles, any more than the railway has. Let us lay that down as a principle. Now I come to the point my hon. friend raises. The point he raises is this-and this is the only defence the elevator can offer. The elevator argues: But we sometimes make a shortage. Now I checked up these shortages-I took the Price-Waterhouse report which was put in the possession of the House some years ago,-and I have checked up dozens of others since, and I find that the percentage of shortage is infinitesimal compared with the overage; it is a mere atom, as it were. I say: Give to the elevator a fair rate of remuneration for the service it renders. I think that rate is pretty good now; as a matter of fact, if I recollect correctly, the average earnings of the elevators at the head of the lakes, without overages, was something like thirteen per cent per annum over a period of years, and if you take away the advantages from screenings it was in the neighbourhood of nine per cent, showing that they were making a fair earning without these extra advantages; and some of them made an earning of one hundred per cent on the capital invested when overages were included in their revenue. I say this: Let the elevator have a fair return for the service it renders, for elevating, storing, handling, insuring, and so forth, the grain. But the moment you say to an elevator or to any common carrier that in order to provide against loss it is permissible for them to take a portion of their cargo or their storage, and that is exactly what the elevators have been doing the last two or three years, and we have been encouraging them so to weigh the grain-I will come to the weighmaster's part of this transaction in a moment-that there would be an overage at the end of the year -it was revealed, it is all on record before this House, that some of the elevators actually paid their superintendents a salary plus a percentage of th% overage that they created, thus putting a premium upon extracting in some way or other a portion of the grain that did not belong to them-

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Yes, it was actually

demonstrated; it is part of the records of this House.

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PRO
CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

The Price-Waterhouse

report to which I have referred. There is no question of it whatever. I have mentioned it time and again in the House, not in the

last couple of years, because this subject has been sub judice during that period.

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PRO

Donald MacBeth Kennedy

Progressive

Mr. KENNEDY (Edmonton):

I do not think that is correct, that the Price-Waterhouse report was laid on the table.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

It was laid on the table of the House in 1919. I handled it myself, and worked on it myself, a nice leather-bound report of about 125 sheets of foolscap, comprising the most complete report I have ever seen.

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PRO

May 11, 1925