construction standards with a minimum capacity of 25,000 bushels. By 1890
there were ninety elevators—so-called Prairie sentinels—in western Canada,
with a total capacity of 4.3 million bushels. Many of these were built specu-
latively by small investors. Districts looking for settler farmers would use their
‘elevator rows’as a draw.
In 1897 western Canadian wheat began to be traded at the Winnipeg Grain
and Produce Exchange. It became the nucleus of the prairie grain business,
introducing futures trading from 1904. Between 1896 and 1911, Manitoba
quadrupled its wheat harvest, producing 60 million bushels—equivalent to
two-thirds of the wheat harvested in Australia that year.
The CPR was obliged to compete for traffic with the US railways from its
inception, keeping freight costs in check to the benefit of farmers and traders.
In 1884, for instance, CPR introduced a special east-bound grain rate with the
express intention of drawing trade from the cross-border route (Innis 1923,
p. 179). It faced further competition from the Canadian Northern Railway,
completed in 1900, that linked the prairies to the Great Lakes though the port
of Thunder Bay, 300 km north of Duluth, Minnesota.
The heirs to Peavey’s US grain empire entered the Canadian boom by
building a network offifty elevators along the Canadian Pacific in Saskatch-
ewan. But from 1910 onwards there was increasing political pressure from
farmers demanding government intervention to curb the power of what they
regarded as local private monopolies. State governments largely resisted the
calls for nationalization, instead offering assistance for the establishment of
farmers’cooperatives (Storey 2006). Thus, the Canadian grain market came to
be dominated by growers’cooperatives for the next eighty years, notably the
Saskatchewan Wheat Pool. Crucially, however, the bulk-handling stream was
well established by 1910, influenced by the model developed in the USA and
thanks to heavy private investment—albeit with government incentives—to
establish a network of large-scale, efficient elevators across the prairies. The
proximity to the American Northwest and the expansion of railways across
the border, including Northern Pacific, introduced an element of competition,
driving down freight prices and giving farmers some choice in the market.
The effect was to ensure that Canadian producers, like their American neigh-
bours, could benefit from the maximization of prices thanks to futures trading
and the ability to store large quantities of grain. While pricesfluctuated, the
dominance of the Canadian export market and its competitive handling costs
allowed producers the assurance of steady demand in good years and bad.
By the end of the 1920s Canada was producing more than a third of world
grain exports. Even more so than in the USA, the Canadian grain-handling
system operated as a complete and integrated whole. There were 5,400 coun-
try elevators with a capacity of 180 million bushels. The thirty-eight public
elevators could store half as much again. They were linked seamlessly by
Barons versus Bureaucrats