The national fallacy and the wheat economy : nineteenth century origins of the Western Canadian grain trade

Abstract

Scholars have long assumed that the Western Canadian wheat economy of the early twentieth century was the consequence of a nineteenth century federal government program, known as the 'national policy', inspired by Sir John A. Macdonald. However, when the basic elements of this alleged policy are investigated, it becomes apparent that no systematic strategy to promote an agricultural staple economy was forwarded by the federal Conservative government. Indeed, the concept of fostering another export staple economy was anathema to nineteenth century Canadian toryism. As such, the development of the Western Canadian grain industry must be re-examined from a perspective that recognizes alternative causation. When the various components of the developing nineteenth century grain trade are unravelled, the immense impetus provided by indigenous regional elements becomes apparent. Hamstrung by federal government policies, early western branch line construction was made possible only through the financial aid of the Manitoba legislature and the municipal bonusing craze. Although the initial impetus was provided by CPR regulations, the pressures of world economic deflation caused local grain men to develop and utilize vast grain elevator networks. Also, by virtue of the contrary designs of the Eastern Canadian milling establishment, Winnipeg grain interests were forced to erect a powerful, centralized marketing apparatus to secure international demand for Western grain. Operating in tandem, these components created a great wheat funnel which was able to competatively spout the prairie staple onto the world's markets and usher in the wheat 'boom' of the earlier twentieth century.