Class Notes (808,146)
Canada (493,092)
Brock University (11,905)
Economics (195)
ECON 2P19 (11)

Chapter 11.docx

7 Pages
Unlock Document

Brock University
Indra Hardeen

Chapter 11 – Agriculture The Prairie Wheat Economy • There are four reasons for the level of attention it has received • First, plans to develop the plains for agricultural settlement were a motive for Confederation and the focus of the national policy • Prairie settlement became the most viable barometer of the success of the new federation – the basis for the doubt and pessimism to 1896 and the exuberance and confidence thereafter • Second, when settlement did come, it did so with dramatic effect • By 1911, the three Prairie provinces had a combined population of 1.3 million, and Saskatchewan was the largest • Canada had grown to be a major presence, in 1909, Winnipeg handled more wheat than any other centre in the world • Third, the settlement of the Prairies affected more than just that region, as indeed was the hope of Canadian politicians and business leaders from the outset • Wheat transformed more earned their livelihood by preparing the region for the settlement, supplying the equipment needed to produce the grain, transporting the grain to its markets, and providing for the needs of the farm families • Wheat also created two new provinces and a regional identify and political perspective that have continued to the present • Fourth, for a generation or more of economic historians, wheat garnered attention as a perfect example of the staples thesis • Settlement and transportation systems all flowed from the belief in the importance of western development • Wheat joined the staples pantheon of furs and timber as one of the great exports in Canadian history Planning for Prairie Settlement • The Hudson’s Bay Company gave up its claim to the region, contained in the 1670 charter, in exchange for a lump sum payment of $300000, land in the vicinity of its trading posts not to exceed a total of 2000 hectares, and one- twentieth of the fertile belt • There were considerable variations within that fertile belt • The northern portion was parkland, a treed and relatively well watered region with mixtures of flat and rolling terrain • To the south were the true prairie grasslands, flat and open, although often traversed by sharp coulees and similar features • What really mattered was that Canada now had a continuous agricultural frontier to replace the one that had been filled in Ontario • The slow process of clearing that affected pioneer operations in the Canada was a minimal problem throughout much of the Prairies Land Policy • A system was formally approved in 1869, based on townships divided into 36 sections, with each section containing 640 acres, like those in the U.S. and unlike the 800 acre sections in central Canada • There were also provisions for road allowances, correction lines, and areas set aside for colonization companies • There were, as a consequence of this system, a variety of ways in which prospective immigrants could obtain land in the Canadian Prairies • The most important types of land acquisition was that of free homesteads • The first Dominion Lands Act, in 172, provided for homesteads of ¼ section for a fee of $10 and a minimum of three years’ residence, but only outside a belt of 32 km on either side of a proposed transcontinental rail line • Free homestead policy changed as the prospect of a transcontinental rail line came nearer • The main changes related to the possibility of taking out a second homestead and to tightening the definitions of the residence requirements and improvements necessary for patenting • Next to free homesteads, the railway land grant was the pillar of Dominion land policy • Railways were thus in the land as well as the freight business • In short, the railway land grant was seen as an incentive system that made the railways’ interests identical with those of the government • The grant actually made to the CPR amounted to 25 million acres • Pre-emptions and purchased homesteads were reintroduced in 1908, partly out of concern that 160 acre farms were too small, but mainly because the government wanted the revenue to finance railway grants • Land policy came under considerable scrutiny at the time of settlements, and has attracted the attention of researchers more recently • The beneficiaries of the revenue were different, but the effects on the rate of settlement must have been quite similar • Railways land grants have been both criticized and praised • They assisted in advertising the region, subsiding immigrants, and disseminating agricultural techniques • Freezing land until railway sections were completed allowed settlement of the poorer and drier areas to be at least postponed • The traditional view of free homesteads is that, although some undeniable waste and inequities were associated with them, by promoting rapid and extensive settlement they served the purposes of the Dominion well • Some homestead were allocated on a first come, first served basis, settlers were forced to claim them before they were economically viable • They had to work them to retain the claim, so capital and labour were committed prematurely • Ward concluded that although the national policy was appropriate to induce settlement, much of the settlement that did occur before 1900 was premature A Transcontinental Railway • The Canadian government also required that the railway have an all Canadian route, passing north of the Great Lakes through the Canadian Shield, a region of low population and high construction costs • The Canadian government recognized that without an all Canadian route, the likely beneficiaries of the Canadian wheat trade would be the American railways and manufacturers • The Canadian government required that the owners of the transcontinental railway be Canadian, not American • The Grand Trunk Railway Company was the obvious candidate to build the line, but even with a considerable government subsidy, the company refused to build a transcontinental railway under the Canadian government’s terms • The GTR counter offered to build rail lines on the Canadian Prairies but insisted on linking the western Canadian rail lines with U.S. lines rather than constructing an all Canadian route • The GTR also had no intention of building the line all at once and ahead of demand – the construction of western Canadian rail lines would be done incrementally as those areas were settled • A charter was drawn up in 1873, authorizing the CPR Company – an amalgam of two earlier contenders – to construct a line from Lake Nipissing to some point on the Pacific Ocean • The plan broke down with the resignation of the Macdonald government in 1873, over a scandal involving political contributions from the railway’s silent American backers • The Liberal government of Alexander Mackenzie was unable to interest another company in the project, and ended up constructing pieces between waterways and American lines • In exchange for constructing a line of Union Pacific quality from Montreal to the Pacific Ocean via the Yellowhead Pass, the CPR received numerous from the government • The land had to be fairly fit for settlement, meaning that acreage in the railway belt deemed unfit could be exchanged for better land elsewhere • There were less valuable concessions, including exemption from taxation for the railway and its grounds and buildings, and similar exemption for the land grants for 20 years • Construction of the line began almost immediately and was completed in 1885, with the last spike being driven in by the Honourable Donald Smith at Craigellachie, BC, on the morning of November 7 • Branch lines were built quickly, though not quickly enough to satisfy the settlers who depended on them • In the east, CPR through purchase and construction, extended the line to Toronto and Montreal and established connections through American railways to Portland, Maine • The CPR was a tremendously successful company, and its founders were lionized in the business journals of the day as the epitome of business acumen • There is a certain irony in this, for two reasons • First, these businessmen were successful, in part because of the vast government subsidies that underwrote the railway • Second, at the time of construction, and for a while after, few thought much of the railway’s prospects • Because the railway had to be built all at once, the project was an indivisible investment • Under these conditions, the holder of the transcontinental railway project had an incentive to delay the investment when the project’s future profits were uncertain • Free land and a transcontinental railway notwithstanding, there was no wheat boom before 1896 The Wheat Boom • Canada was able to capture an increasing share of a secularly rising world wheat trade • The main markets for export grains in the 19 century were in Europe, particularly Britain • Demand grew in these countries, but the main factor behind the shift to international specialization was a dramatic decline in the costs of getting grain from the farm gate to Liverpool • Ocean rates fell as steel replaced iron and wood in ships, as the vessels became larger, as marine engines improved in efficiency, and as associated port costs fell • Inland rates declined as steel rails were introduced and as engines and rolling stock were improved • Canada was a relative latecomer to this growing international wheat trade • Prairie agricultural land was now attractive because transport costs had declined, cereal prices had risen, the costs of inputs to agriculture had fallen relatively, interest rates were at their lowest level in recorded history, international capital and labour flows were increasing, the technology to farm the Prairies and to store and transport the product to market was not available, and last, but for the commission certainly not least, Dominion land, transportation, and immigration policies were supportive • Finally, the provisions of the national policy were the same in 1896 as they had been
More Less

Related notes for ECON 2P19

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.