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Saskatchewan, 1930-1935

Published online by Cambridge University Press:  07 November 2014

G. E. Britnell
G. E. Britnell*
Affiliation:
The University of Saskatchewan
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Extract

In this article an attempt is made to present in summary form a description of the impact of drought and depression on Saskatchewan. Important problems of public policy and difficult problems of economic analysis arise in the course of the description, but a full treatment of these problems has been postponed. It seemed that the intelligent discussion of national problems could best be promoted at the present time by making available an account of the facts relating to this one province.

Type
Articles
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Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 2 , Issue 2 , May 1936 , pp. 143 - 166
Copyright
Copyright © Canadian Political Science Association 1936

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References

1 An earlier discussion of the “Depression in Rural Saskatchewan” of which the present paper is in some measure a continuation, was contributed by the author to The Canadian Economy and its Problems, edited by Innis, H. A. and Plumptre, A. F. W. (Toronto, 1934), pp. 97–110.Google Scholar A more complete study is in preparation as one of a series on “standards of living” sponsored by the Institute of Pacific Relations and the Canadian Institute of International Affairs.

2 Mackintosh, W. A. et al., Economic Problems of the Prairie Provinces (Canadian Frontiers of Settlement, IV, Toronto, 1935), pp. 26–8.Google Scholar

3 Allen, Wm. and Hope, E. C., The Farm Outlook for Saskatchewan, 1935 (Saskatoon, 1935), pp. 1–2.Google Scholar

4 See particularly Mackintosh et al., Economic Problems of the Prairie Provinces; McQueen, R., “Economic Aspects of Federalism, A Prairie View” (Canadian Journal of Economics and Political Science, vol. I, no. 3, 08, 1935)Google Scholar; Innis and Plumptre, The Canadian Economy and its Problems; Innis, H. A., Problems of Staple Production in Canada (Toronto, 1933)Google Scholar, and “Notes on Problems of Adjustment in Canada” (Journal of Political Economy, 12, 1935).Google Scholar

5 The estimate for 1935 (subject to revision) is $95,112,000 made up as follows: wheat, $68,400,000; coarse grains and flax seed, $5,515,000; livestock, $11,813,000; dairy products, $6,250,000; poultry, $3,000,000; wool, $134,000.

6 On the prairie plains wheat commonly accounts for 90 per cent. of all cash receipts.

7 Two other items which are supplying increasing, although as yet relatively very small, proportions of the farm income are the wool-clip—which has shown a marked increase in volume as certain sections, particularly the south-west, have expanded their sheep production—and honey, the production of which also increased substantially between 1928 and 1934.

8 The farm price of wheat excludes certain fixed charges of about 20 cents a bushel for freight, elevator handling charges, inspection and grading fees, commissions, etc.

9 Farmers in well-established districts on the better soil types of the province sometimes have outside resources. See Studies of Farm Indebtedness and Financial Progress of Saskatchewan Farmers: Report no. 3: Surveys made at Indian Head and Balcarres; Grenfell and Wolseley, and Neudorf and Lemberg, contributed by Department of Farm Management, University of Saskatchewan, Saskatoon, College of Agriculture, Bulletin no. 68, 1935, p. 29.

10 From materials of surveys made by the Department of Farm Management, University of Saskatchewan at Kindersley; Turtleford; Davidson; Richmond, Golden Prairie, and Burstall; Maple Creek and Hatton; Rosemount and Reford; Scott, Wellington, and Brokenshell; Indian Head and Balcarres, Grenfell and Wolseley, Neudorf and Lemberg; and Humboldt.

11 See Hansen, W. F., “Some Facts Concerning Life Insurance in South-western Saskatchewan” (Economic Annalist, vol. VI, no. 1, 02, 1936, pp. 6–10).Google Scholar

12 Mackintosh, et al., Economic Problems of the Prairie Provinces, pp. 28–32.Google Scholar “Net cash income” is defined for his purposes as follows: “By multiplying the average wheat yield per acre in each district by the average farm price received, the average gross income per acre of wheat may be obtained. By deducting from these calculated gross income figures the operating expense figure (adjusted for differences in yield) … average net income figures for each crop reporting district are obtained. This calculated net income includes the amount available for the payment of interest on indebtedness, interest on owned capital and profits for the farm enterprise. … It is the fund which must carry the fixed charges of both the individual enterprise and the agricultural community at large” (pp. 30-1).

13 Ibid., p. 30.

14 Quoted in Innis, and Plumptre, , The Canadian Economy and its Problems, p. 101.Google Scholar

15 See Bladen, V. W., “The Theory of Cost in an Economy Based on the Production of Staples: Canada and Wheat” (Innis, and Plumptre, , The Canadian Economy and its Problems, pp. 135–42).Google Scholar

16 Since the farmer receives the bulk of his revenue in the fall of the year, he is likely, under the pressure of his creditors, to pay out more than he can really afford to do, with the result that his standard of living may be seriously impaired for a large part of the following year.

17 The estimated average yield for 1935 is 10.2 bushels per acre, which at the farm price of 60 cents would give a gross return of $5.22 per acre, when seed requirements had been deducted.

18 This sum does not include all highway expenditures during these years as much larger amounts were spent on the gravelling of provincial highways.

19 See the study of Municipal Finance contributed by W. W. Swanson to The Economic Problems of the Prairie Provinces, chaps. vii-xi. The importance of the drought, 1929-31, is there discussed.

20 Statutes of Saskatchewan, 22 Geo. V (1932), c. 74.

21 See Daniel, C. B., Report of the General Manager of the Saskatchewan Relief Commission: A Summary of the Activities of the Commission, including the Full Programme for the Years ending August 31, 1932, and August 31, 1933, and a Portion of the Programme for the Year ending August 31, 1934 (Regina, 06, 1934, typewritten).Google Scholar

22 In addition to expenditures made through the Commission, the provincial government guaranteed advances up to $150 per quarter section made by mortgagees for seed grain (Statutes of Saskatchewan, 21 Geo. V (1931), c. 61, and c. 62).

23 Daniel, , Report of the General Manager of the Saskatchewan Relief Commission, p. 3.Google Scholar

24 The $5,669,000 received by Saskatchewan farmers under the 5 cents a bushel bonus paid by the Dominion government on the 1931 crop (Statutes of Canada, 21-22 Geo. V, c. 60) might also be looked upon as a contribution to agricultural relief though it helped most those farmers who needed it least.

25 See Daniel, , Report of the General Manager of the Saskatchewan Relief Commission, p. 16.Google Scholar Of the 249 carloads, the United Church donated 135; the Roman Catholic Church, 62; the Presbyterian Church, 10; the Lutheran, 8; the Moravian Church, 3; while other organizations and individuals contributed the remaining 31.

26 Information by correspondence from the Rev. Dr. George Dorey, secretary of the Saskatchewan Voluntary Rural Relief Committee, Regina, July, 1935. In addition to the activities outlined above, the Committee received between September 1, 1932, and July 12, 1935, cash contributions of $32,235 of which $22,000 came from the provincial government. “The government money was used to purchase bedding and clothing (mostly children's clothing). Numerous cases of distress for which no provision was made by the government have been taken care of by the Committee.”

27 Daniel, , Report of the General Manager of the Saskatchewan Relief Commission, pp. 7–8.Google Scholar “The Commission has never attempted to enforce the collection of direct relief advances, other than to send a statement of account to the individual or the provision of relief work, which latter was applicable only to Northern areas. Attention should be drawn, however, to the fact that up to May 31, 1934, we have received voluntary repayments of direct relief to an aggregate sum of $40,542.54 and aggregate repayments on account of advances made for seed and seeding operations of $2,469,495.58 of which sum $714,442.30 represents the return of binder twine advances” (ibid., p. 19). Relief notes to the amount of approximately $10,000,000 on the 1931-2 advances have since been cancelled by the Dominion and provincial governments, arousing considerable dissatisfaction among recipients who had repaid advances in cash or worked them out in whole or in part by labour on the roads.

28 Information by correspondence from A. Perring Taylor, deputy provincial treasurer, Regina, Sept., 1935. The rural municipalities' share of the Commission disbursements was $493,778 but this amount had to be advanced by the province. The Dominion contribution was approximately one-third of the direct relief.

29 See Statutes of Saskatchewan, 25 Geo. V (1934-35), c. 33; c. 34; c. 37. The province also continued to guarantee advances made by mortgagees for agricultural aid up to $150 per quarter section (25 Geo. V, c. 61).

30 Information by interview and correspondence from Bureau of Public Welfare and Northern Settlers' Re-establishment Branch, Department of Municipal Affairs, Regina, July, 1935-April, 1936.

31 See Budget Speech delivered by the Hon. W. J. Patterson, premier and provincial treasurer in the Legislative Assembly of Saskatchewan, March 3, 1936 (Regina, King's Printer, 1936). “Relief and agricultural aid continues to be the most serious problem facing the Province. Following the serious crop failure of 1934, it became necessary last spring to supply the largest quantity of seed and seeding supplies ever required in the history of the Province. The total cost of seed and seeding supplies was approximately $8,000,000. Winter feed, grain and fodder, was also a very large item of expenditure, running into a total of $5,400,000. A portion of this expended in the drouth area will be assumed by the Federal Government. Last summer assistance for summer-fallowing was given to the extent of $730,000, all of this being supplied from provincial funds” (p. 11).

32 Information by correspondence from Bureau of Labour and Public Welfare, Department of Municipal Affairs, Regina, Dec., 1935. Government assistance was being given in some 225 municipalities and local improvement districts at the end of 1935; the municipalities accepted responsibility for one-third of the cost in each case, but a large number were unable to make any contribution to immediate expenditures.

33 See Budget Speech of the Hon. W. J. Patterson, 1936, p. 11.

34 The public debt of the province increased from $65,742,143 as at September 1, 1929, to $177,552,669 at the end of 1935. See Budget Speeches of provincial treasurers, 1935 and 1936.

36 See Wm. Allen, Studies of Farm Indebtedness and Financial Progress of Saskatchewan Farmers: Report no. 1: Survey Made in the Rural Municipalities of Rosemount, no. 378, and Reford, no. 379, in 1932 (Saskatoon, College of Agriculture, Bulletin no. 60, 1934), p. 45.Google Scholar

36 Evidence of Dr.Allen, Wm., Proceedings of the Royal Commission on Banking and Currency, 1933, vol. III, p. 1327 (mimeo.).Google Scholar

37 See Allen, Wm. and Hope, E. C., The Farm Outlook for Saskatchewan, 1933, p. 3 Google Scholar; 1934, p. 2; 1935, p. 2 (Saskatoon, 1933, 1934, 1935).

38 An Act to Facilitate the Adjustment of Agricultural Debts, Statutes of Saskatchewan, 21 Geo. V (1931), c. 59; 22 Geo. V (1932), c. 51; 23 Geo. V (1933), c. 82; 24 Geo. V (1934), c. 59; 25 Geo. V (1935), c. 88; An Act respecting the Postponement of Issue of Certificate of Title to Land Sold for Taxes, 21 Geo. V, c. 50; 22 Geo. V, c. 37, c. 38; 23 Geo. V, c. 34, c. 35; 24 Geo. V, c. 28, c. 29; 25 Geo. V, c. 39, c. 40; An Act Providing for Certain Temporary Changes in the Statute Law, 21 Geo. V, c. 51; 22 Geo. V, c. 36; 23 Geo. V, c. 33; An Act to Amend the Arrears of Taxes Act, 22 Geo. V, c. 33; 23 Geo. V, c. 32; 24 Geo. V, c. 24; 25 Geo. V, c. 35; An Act to Provide for the Consolidation of Certain Taxes, 23 Geo. V, c. 36; 24 Geo. V, c. 30; 25 Geo. V, c. 41; An Act respecting the Limitation of Certain Civil Rights, 23 Geo. V, c. 83; 24 Geo. V, c. 60; 25 Geo. V, c. 89.

39 23 Geo. V, c. 82. Another section provided that in all future sales of farm machinery for more than $100 (except binders), the vendor's right to recover unpaid purchase money should be restricted to his lien upon the article sold and his right of re-possession and sale.

40 23 Geo. V, c. 83.

41 25 Geo. V, c. 89. “The vendor's or mortgagee's right to recover the unpaid balance due shall be restricted to the land sold or mortgaged and to cancellation of the agreement for sale or foreclosure of the mortgage or sale of the property, and no action shall lie on the covenant for payment contained in the agreement for sale or mortgage.”

42 See Studies of Farm Indebtedness and Financial Progress of Saskatchewan Farmers: Report no. 1: Survey Made in the Rural Municipalities of Rosemount, no. 378, and Reford, no. 379, in 1932 (Saskatoon, College of Agriculture, Bulletin no. 60, 1934), p. 25 Google Scholar; Report no. 2: Surveys Made in the Rural Municipalities of Brokenshell, no. 68, Wellington, no. 97, and Scott, no. 98, in 1932 (Saskatoon, College of Agriculture, Bulletin no. 65, 1935), pp. 30–1Google Scholar; Report no. 3: Surveys Made at Indian Head and Balcarres, Grenfell and Wolseley, and Neudorf and Lemberg, in 1933 (Saskatoon, College of Agriculture, Bulletin no. 68, 1935), pp. 28–9.Google Scholar

43 At the close of 1933 Professor E. C. Hope of the Farm Management Department at Saskatchewan estimated that it would require the expenditure of at least $140,000,000 to restore the 136,000 farms of Saskatchewan to the condition of 1929. Depreciation has continued almost unchecked for more than two years since that time, so that $200,000,000 does not appear an unreasonable estimate for the spring of 1936.

44 In the crop year 1931-2 payments of debts averaged $438, of which $152 went for interest, for the 243 farms at Rosemount and Reford, but the indebtedness per farm showed a net increase of $183 during the year. “Decreases in debt were reported by 37 farmers, but most of these decreases were small excepting where cancellations of obligations occurred with the loss of nominal ownership of real estate” (Studies of Farm Indebtedness, Report no. 1, p. 48).

45 “No significant decreases in debt were reported. The increases were due in large part to the accumulation of interest on obligations relating to farm real estate and equipment, to the advances made for relief, and to unpaid taxes. Some adjustments of indebtedness were reported to have been made previous to these surveys, and others have been effected since that time, but records of these are not available. It is generally considered that in each of these areas further increases of indebtedness have taken place since the surveys were made in 1932” (Studies of Farm Indebtedness, Report no. 2, p. 53).

46 “Since the districts were visited in 1933, some improvement in conditions has been observed but it seems unlikely that any progress with the reduction of farm indebtedness has been achieved” (Studies of Farm Indebtedness, Report no. 3, p. 51).

47 From unpublished material on 459 farms at Humboldt supplied by Dr. Allen (subject to revision).

48 87 per cent. of the operators at Balcarres-Indian Head, Grenfell-Wolseley, and Neudorf-Lemberg required new credit for the 1932-3 crop year. The average new credit per farm, excluding interest accrued on earlier indebtedness, for all farms in these districts was $317, $226, and $152 respectively. In the previous year new credit of this kind at Scott had been $1,293; at Wellington, $822; and Brokenshell, $571.

49 Allen, Wm., Research in Farm Finance: A Preliminary Report of Field Studies Conducted in the Summer of 1933 for the Saskatchewan Agricultural Research Foundation (Saskatoon, College of Agriculture, 1934), p. 4.Google Scholar

50 “With the increase in the size of the farms the total debt per farm increased, but the average debt per acre of cropland declined. Under normal yields and prices the greater debt of the larger farms can be taken care of more easily than the smaller debt on farms of lesser size, but when revenues decline below the operating costs of the efficient farmers, those having the larger farms are at a disadvantage, particularly if they have a considerable debt” (Studies of Farm Indebtedness, Report no. 1, p. 37).

51 Few land sales are for cash, a fact which has frequently made for inflated land values. In the majority of cases an initial payment of from 10 to 20 per cent. is made and the agreement of sale stipulates that a one-half share of the proceeds of the crop grown on the purchased land each year be turned over to the vendor to be applied in payment of interest and reduction of outstanding principal. The last ten years have seen further adaptations of the system of land purchase to meet the problem of income variability in that some contracts have provided for the acceptance of a stated number of bushels of wheat, usually no. 2 Northern, instead of a stated number of dollars. At Kindersley in 1930 it was found that about one-fifth of the farm lands sold in the previous five years had been sold on this bushel basis. (See Murchie, R. W. et al., Agricultural Progress on the Prairie Frontier (Canadian Frontiers of Settlement, V, Toronto, 1936), p. 245.Google Scholar)

52 Mackintosh, W. A. (Economic Problems of the Prairie Provinces, p. 259)Google Scholar gives as a conservative estimate of the total agricultural debt of the Prairie Provinces, $650,000,000, in 1931.

53 “This registered debt is not necessarily the amount of mortgage debt due or accruing due, but is the original amount, actually loaned on the security of farm land mortgages, which still appears in the records of the Land Titles Offices, on the titles to the said lands, as undischarged mortgages. We have compared the amount originally lent with the amount of principal, interest and other charges now owing to a number of mortgage corporations carrying on a large mortgage lending business in Saskatchewan and find their experiences vary. Some have considerably more owing to-day than the amount originally lent while others have considerably less. Their relative position depends chiefly upon two factors: First, whether loans, in any considerable amount, have been made since 1928, and secondly, whether loans have been made in that part of the province which has been afflicted by a series of crop failures, due to drought. Generally speaking loans made prior to 1929, even in the drought area have a lesser amount outstanding than the original loan, while loans made in 1929 or after have a considerably larger amount outstanding than was originally lent. Again loans in the drought area are in the main increased in amount while those in that part of the province which has not suffered so greatly from the ravages of drought are reduced as compared with the amount originally lent. One company with $8,000,000.00 outstanding in mortgage loans, chiefly in the drought portion of the province, on that portion of the moneys lent prior to 1929 has 14% less owing to-day for principal, interest and other charges, than the amount originally lent; while by adding the loans made in 1929 and after, the present total amount outstanding is 14% greater than the amount originally lent. The same company's experience with loans made in that portion of the province which has been comparatively free from drought, but which has suffered equally from low prices, shows that of $5,298,000.00 originally lent the present amount outstanding, for principal, interest and other charges is 6% less than the original loans. Another company, with loans throughout the entire province, but which has made no loans since 1928, has 4% less owing to-day than the amount originally lent…. The total mortgage debt registered against the farm lands of Saskatchewan is the sum of $207,551,980.00 of which $172,277,936.00 represents first mortgages, i.e., they are a first charge against the land mortgaged, subject to taxes, relief and seed liens and any charges in favour of the Crown; while $35,274,040.00 are second or subsequent mortgages being preceded by a previous mortgage, a mechanics lien or some like charge” (Report of the Debt Survey Committee, 1934, Province of Saskatchewan, Regina, 1935, part IV, pp. 312-3).

54 “On the basis of the information available, it would appear that the average debt for the province is probably not less than $12 per acre of cropland” (Evidence of Dr.Allen, Wm., Proceedings of the Royal Commission on Banking and Currency, 1933, vol. III, p. 1336).Google Scholar

55 Statutes of Canada, 24-25 Geo. V, c. 53.

56 At March 1, 1936, the total reductions effected through federal and provincial debt adjustment agencies amounted to $6,166,645.15 made up as follows: Saskatchewan Provincial Debt Adjustment Board, 1,661 cases, $1,745,505.73; Farmers' Creditors Arrangement Act: Official Receivers in Saskatchewan, 602 cases, $2,042,751.77; Board of Review for Saskatchewan, 759 cases, $2,378,387.65. Information by correspondence from secretary, Debt Adjustment Board, Regina; Commissioner, Farmers' Creditors Arrangement Act, Ottawa; registrar, Board of Review for Saskatchewan, Regina, March-April, 1936.