THE PRESIDENT, Sir William Hearst, introduced Governor Preus who was received with loud applause.
Mr. President and Gentlemen,--Last spring after I had spoken in Winnipeg on the Non-Partisan League and its connection with Socialism, I was somewhat surprised to receive a letter from Mr. Parsons asking me to come to Toronto and talk on the same subject. I thought you would be so far away from the centre of the activities of the NonPartisan League that you would not be interested in its history and its aims. But even if the league itself has not reached into your territory, I assume you will be interested in hearing something about its connections, for the league is but a manifestation of that organized effort, the like of which the world has never seen before, which is at work in every
Mr. Preus is a graduate of Luther College and of the University of Minnesota. He was Commmissioner of Insurance for four years and later State Auditor. Because of his successful administration of these offices, his business ability and his gifts as a speaker, he was chosen Governor of Minnesota in 1920 by a very large majority and endorsed for reelection by a large vote in 1922. He is a strong advocate of co-operative marketing as a better remedy for farming troubles than is state ownership. He is a supporter of the campaign for improvement of the St. Lawrence to permit ocean ships to come to ports on the Great Lakes.
country in the civilized world trying to destroy not only sound government, but seeking to tear apart the economic structure upon which has been built progress. And at the same time as they are trying to destroy our economic organization, they are trying also to destroy those institutions which we hold dearest of all, our homes, our marriage ties, and our religion.
We had had socialists and a Socialistic party in practically every state in the United States for a number of years, but outside of a few localities, they had made no great progress, because most of our farmers and our labouring people as well, knew that they had greater advantages under the present economic system than they might have under socialism and public ownership. But six or seven years ago, the farmers of North Dakota, especially the western part of the state, were in bad shape. In the greater part of the state, wheat is the principal crop, and when there is insufficient rain, as is often the case, so that the wheat crop fails, they have nothing to fall back on. In addition to this they had grievances against the buyers and middlemen in the terminal markets, some of them at least justified. They were not ready to accept socialism as a remedy, because they knew what it was, but they were in a frame of mind where they were willing to try any other remedy offered to them. So some of the socialists in that and adjoining states, many of them prominent and nationally known, organized the Non-Partisan League and offered it as a sure cure for all suffering. Under this new name, socialism proved more palatable.
The Socialist party in North Dakota was bodily removed into the Republican party, captured the Republican primary in 1916, and carried the election in the fall. For a period of nearly five years, after winning three successive elections, the Non-Partisan League was in the saddle of the government of North Dakota. Last November, the Industrial Commission, consisting of the Governor, the AttorneyGeneral, and the Commissioner of Labour and Agriculture, were removed from office by a referendum vote, the first election of its kind held in any state of the Union, resulting in the recall of the Governor or any other state official.
The appeal generally made for votes in North Dakota, as well as in other states, was this: "Mr. Farmer, there is too much difference between what you receive for your raw product and what you pay for the finished product. The middleman must be removed. There must be direct contact between the producer and the consumer. The remedy is state ownership. Let the state be bonded, let industries be established, let the state buy from the farmer what he produces and manufacture it into finished articles and distribute them to the consumer." To carry this programme through, the Industrial Commission of North Dakota was created by the legislature which was also of Non-Partisan persuasion. The Commission consisted of the Governor, the Attorney-General and the Commissioner of Labour and Industries. This Commission was charged with selling bonds, with establishing a state mill at Drake, North Dakota, another one at Grand Forks, North Dakota, the establishment of the Bank of North Dakota, the establishment of State Workingmen's Compensation Insurance, State hail insurance, and other institutions which are purely socialistic in their character. These and kindred schemes are socialism in its purest form. The United States Government was founded not on the Socialist system but on the Capitalist system. A capitalist is any person who owns property and makes money thereon. Socialism forbids this system and declares that you shall not own a liberty bond and draw interest thereon, that you shall not own stock in a corporation and get your dividends, that you shall not own a farm and make money therefrom, but that all property which produces wealth shall belong to all the people, shall be jointly managed for the benefit of all. The plan of government in North Dakota was therefore a complete overthrow of the very idea which populated that country, which brought immigrants from the old world, namely, the hope of more personal wealth and greater comfort than in the country from which they sailed. Most of the people of the northwest came to America to improve their financial conditions, to get more of private property, and did not come, as did many of the early settlers of the United States, to get religious freedom, witness, the Puritans in New England, the Quakers in Pennsylvania, and the Catholics in Maryland.
This scheme as carried out in North Dakota was the platform of the Non-Partisan League in the State of Minnesota. Where this movement would have ended, if they had been successful two years ago in our state, it is difficult to say. In our state, we have the largest school fund of any state in the Union, with a possible exception of one. We have more than forty-two millions of dollars invested in municipal, state and government bonds, the interest accretions on which are used for educating the children in our state. With that government in power, this fund could quickly have been seized. Minnesota is probably the. leading mining state in the Union, for it produces from sixty to seventy per cent. of the iron ore produced in the United States each year, and in recent years has produced close to one-fourth that produced in the entire world:- In addition, thereto, Minnesota is among the leading agricultural states in the Union. It is generally called the "bread and butter state" for the reason that it has outranked the other states in these two products. Their plans were thwarted by a narrow margin in our elections in Minnesota, but the lugubrious eyes of socialism can still be seen where mental darkness prevails in that part of the country as well as in your own.
My object in speaking to you upon this subject is this: When socialism takes hold in this country, it will not first proceed in as radical a fashion perhaps as was done in North Dakota, but little by little the socialists will seek to take business out of private hands and place the management thereof in the state. I hope that such a time will never come. A state should never endeavour to do for individuals what they are able to do for themselves. The people who are governed the least are the most happy.
Socialism is everywhere the same. Its father is Karl Marx. He and Frederick Engel gave to the world the Communist Manifesto in London in 1847. The Communist Manifesto defines Capitalism and Socialism as I have defined them. The one place on earth where socialism has been carried to its logical conclusion is Russia. The First article of the Russian Constitution as adopted on July 10, 1918, declared all lands, agricultural and mineral, or means of production, including factories in the cities and farm machinery on the farms as confiscated, taken over by the government to be managed by the government for the mutual and equal benefit of all. I am glad to know that Lenine in his letters addressed to the Duma states frankly that the capitalist system must again to some extent be embraced. This is the only hope in the rehabilitation and establishment of Russia for the benefit of its own people, as well as for its position in the sisterhood of nations on earth. Carried to its logical conclusion, socialism has most tragic effects upon the constitutions which we love the most. Immediately after the Bolsheviki had taken charge of the Russian Government, all church property was confiscated, all life insurance contracts were cancelled, the priesthood and ministry were disfranchised with every person who maintained his right to private property or right to profit from the services of any person. The laws of inheritance were destroyed. The state promised to take care of dependents and to bring them up properly. This is not your and my kind of government. Your aim and mine is that when we die, we shall leave our dependents in as nearly the same position as they were while we were with them, so far as finances and comforts are concerned, that they may be deprived of our society alone when we depart. The effects of socialism upon church and home wherever carried to its logical conclusion means the destruction of these institutions. A young man having no dependents cares little about private property. When he is married, he has a new incentive for private property.
Every socialist knows that so long as there are family ties and obligations, private property would be demanded. You and I might be satisfied with a slip-shod life, from day to day, depending upon a wise government if we had neither wives nor children, but with the coming of these obligations, we demand private property. Such is human nature.
Again, the church teaches that you should have family ties and obligations and therefore the socialist says the blessings of socialism are such that you can well afford to destroy your family obligations and ties. Inasmuch as the doctrines of the church conflict with this idea, it is necessary to destroy the church and to destroy the marriage obligations.
They did not forbid marriage in Russia, but they made marriage and divorce purely a matter of registration subject to the affirmative action of both or either one who had contracted martial obligations. This was the most sinister way that could possibly have been devised for the destruction of the home. As to the church, it appeared as if they would emphasize the socialist attitude toward the church in that Russian Government. As stated before, Karl Marx is the father of socialism, together with his associate, Frederick Engel. Karl Marx once said "We can know nothing of God. Socialism destroys all religion and all morality." Frederick Engel says there are three things which block the way to human progress: religion, marriage and private property. On Easter morning, it has been the custom in Russia for many years under the old Czarist regime to instruct the newspapers influenced by the government to print these words in bold-faced type across the top of the paper: "Christ is Risen." When the socialists took charge, they instructed the papers not to print the sacred sentiment referred to, but to print instead the words: "One hundred years ago today Karl Marx was born." There you have the ideals of America, where you have the right of life, liberty and private property, contrasted to the socialist Russia, where you have neither religion nor right to reap the fruits of your own labour.
But socialism was not defeated in the northwest merely by calling attention to these points. Socialism was defeated, and we hope for some years to come, because our good farmers in our state were made to realize that the scheme of the state going into business could not successfully compete with private enterprise. The mills of North Dakota are destined to failure when they cannot compete with the mills which are privately owned in Minneapolis. The insurance system established in North Dakota, will, in my opinion, fail for the reasons that people who insure in that country are not satisfied with the delay in settlements and the high rates. Private enterprise will doubtless eventually be permitted to compete with the State of North Dakota, and when it does, history will repeat itself, the state will be driven out of business. State business cannot be operated successfully in competition with private enterprise, for the simple reason that people working for the state are too often inclined not to have interest in the success of the work in which they are engaged, but in receiving higher salaries, shorter hours and pensions in old age.
Contrasted to these ideas, a programme of cooperative marketing was submitted in Minnesota to relieve the farmer with reference to those things which he complains of, namely, that there is too much difference between what he receives for what he produces on the farm and what he pays for the product made therefrom and distributed to farmers and others through the retailer.
Co-operation is the opposite of state ownership. Co-operation develops the individual farmer's authority over his own business, inasmuch as he remains in charge of his business, and when it becomes too big for him to handle as an individual, he and other farmers handle their business collectively. One farmer alone cannot have the advantage of shipping and selling his produce which he can obtain by combining the efforts of a large number of farmers.
State ownership would take the authority away from the individual and place it in the hands of the state as a whole. The farmers' business would then become political.
An example of successful co-operation can be found in the case of the citrus growers in California. Every person is familiar with the "Sunkist" lemons and oranges. These fruits have been marketed by the farmers of California through their own marketing agency and are sold directly to your storekeeper from the farmers' co-operative exchange belonging to and operated by the fruit growers of California. The farmer has given up his right to individually sell his fruit to whomsoever he wishes and has combined with his farmer associates to jointly sell his product with them. In 1919, the citrus fruit growers of California did a business of nearly $120,000,000.
Our farmers of Minnesota have been awakened to the benefits which can be derived through co-operative exchanges. We have today approximately 4,000 such societies. A federal census report issued last November, states that in 1919, Minnesota farmers marketed 43.9 percent of their products through co-operative associations.
The first permanently successful co-operative societies in Minnesota were the "township mutual" fire insurance companies. The first two of these were organized about 1867. Today we have 163 of them, and on January 1st, 1922, they had $696; 309,000 insurance in force. The cost of insurance in these companies has averaged about eighteen cents per $100 per year. The rate of stock companies which still solicit this business is forty-six cents per hundred per year on three-year contracts. Four-fifths of our farmers are insured in these companies.
The co-operative society that has done most for Minnesota is the co-operative creamery. The first of these was started in 1884, but the idea did not take general hold until in the nineties. What creameries we had were unsanitary and mismanaged, and were selling their butter at eight to twelve cents per pound. The co-operative creameries were receiving twenty-two cents per pound. They made dairying profitable, not only because of the direct return, but because it conserves soil fertility, and it removes the hazard of one-crop farming. In thirty years, from 1890 to 1920, the total number of cows in our state has increased from 566,000 to 1; 395,000, the average price of butter from twelve to fifty-seven cents per pound, and the average yield of butter per cow from 128 to 194 pounds per year, so that the gross return for dairy products has increased from $8,700,000 in 1890 to $154,000,000 in 1920. Sixty-eight percent of the butter made in Minnesota is made in co-operative creameries, and ten percent more in local independent creameries. The co-operatives pay the farmers on the average 91.3 percent of what the consumer pays for the butter. A report made by the dairy commissioner of North Dakota, in the fall of 1918 states that the producer there is receiving only forty-five cents per pound for butter fat for which the consumer pays sixty-five to seventy cents, that in 1917 only 18.3 percent of the cream sold by the farmers of that state was made into butter at local creameries, and not all of these co-operative. He reports that for 1918, the amount of butter fat made into butter at local creameries was only 8.4 percent of the total marketable product. He states that the producers received an average of 34.3 cents per pound of butter fat in 1917 and 42.07 in 1918. The reports of the Dairy and Food Commissioner of Minnesota show that the Minnesota farmers received an average of 44.3 and 52.7 cents per pound the same years.
A little less than half the grain sold by Minnesota farmers last year went through farmers' elevators, our state having 417 of these elevators. We had last year 650 livestock shipping associations and they handled sixty-five per cent. of the livestock going to terminal markets. Our state is also a great potato-growing state, and we have 110 local potato warehouses and shipping associations. We have 1,648 rural telephone companies. Many of these operate but a single line, but some of them cover large communities. We have one farmers' packing plant, one milk marketing association, and a great variety of egg-shipping, wool-shipping and horse and livestock breeding associations.
Until a couple of years ago, our co-operative societies usually acted independently, but now we have legislation permitting them to join and form terminal marketing associations, to hold stock in other corporations in our state or other states. We also have legislation declaring our grain and live-stock exchanges open markets and permitting farmers' organizations to have membership therein. More than half our creameries are members of the Minnesota Co-operative Creameries Association, which is not only a marketing agency, but which also supervises manufacture so as to standardize and improve quality. The potato associations have joined in forming the Minnesota Potato Exchange, which last year handled about three-fourths of the shipments of the local associations. Last year there was also organized the Central Co-operative Commission Association, which in its first five months of existence handled $5,000,000 worth of livestock at terminal markets.
The United Grain Growers of Canada now has a membership of 35,000 farmers. It is a stock company. The stockholders are all farmers. The capital stock was until recently $5,000,000, and a member can hold 100 shares of the value of $25 each, but he is entitled to only vote, thereby recognizing the mutual or co-operative idea, which is not based on the amount of stock which any one person holds. No one but a farmer can purchase such stock. The company has an elevator at Fort William, which is leased to it by the Canadian Pacific Railway, and has a capacity of 2,500,000. It has another elevator at Port Arthur with a capacity of 3,500,000. These elevators have both made money for the farmer-stockholders by way of setting aside a surplus for developing the business of declaring dividends. The record of these two elevators is very much better than that of the government-owned elevators.
"The United Grain Growers, Limited," has a marketing service covering both country and terminal elevators for grain, and also engages in export business. It has a separate livestock business and sells its stock at regular markets and supplies stockers and feeders for farmers. It has a cooperative machinery business and handles farm implements and other supplies. It buys and sells farm lands for its members, as well as others, and operates this business in conjunction with an insurance department. It also has some standing timber and operates a mill thereon.
In Minnesota, such an association can be organized under the co-operative organization act. If such an association is organized with its stock company for marketing and purchasing farm products and supplies, it can purchase a membership in the Chamber of Commerce of Minneapolis and Duluth on behalf of the farmers of the State of Michigan. This company, owned by the farmers, controlled by the farmers, and having equal right of purchasing and selling in the Chamber of Commerce, could engage on a competitive basis with the middleman now found between the producer and the consumer of farm products in any business in which the members of the Chamber of Commerce now engage. If the farmers view this plan with skepticism and doubt, they may with all propriety do their own buying and selling without the aid of the Chamber of Commerce, provided they are sufficiently large and have an amount of business sufficient to make it practicable. The Farmers' Equity Exchange, of Saint Paul, is following the latter plan. In connection with co-operation in Canada, let it not escape your attention that originally the farmers in Canada wanted terminal elevators to be owned and operated by the government. They found after experience that it was a failure and turned to co-operation as the solution of their problems. Our Minnesota farmers have made rapid progress in improving their marketing facilities, but I believe they are determined to have control of terminal marketing in some lines where they do not now have it. They have not in mind the state-owned plan, for although we are considered an agricultural state, only 40.5 percent of our population is strictly rural, and the remaining 59.5 percent live in the cities and villages, and are desirous of lower prices on farm produce, and a state-owned market would be under the control of politicians who got three-fifths of their votes in the cities and villages: Under the cooperative plan, the butter marketing agency is controlled and owned entirely by dairymen, the potato exchange by potato growers, and so on.
Then, after the farmers are organized by groups, to take care of each line of marketing, they have the Farm Bureau, which looks after the general interests of the farmer, and gives them a common meeting place. In the ten years since it was started it has been a most potent agency, not only in promoting co-operative marketing, but also in spreading the gospel of better farming, better cattle, better seed and better cultivation. Those things, after all, mean more to the prosperity of the farmer than anything that can be done by your legislative and administrative officials. But there are some things which your officials can and should do, to see that we get better rural credits, reasonable freight rates, and things of that sort. In such matters, the federation is the farmers' spokesman, and when their officers tell us what they want, we know they are speaking for the common farmer, instead of merely using the farmer as a tool to advance their own ideas. No wonder, then, that the federation has grown until it has more than a million members. The federation has proceeded along safe and sane lines, and it has not attempted to overthrow our American ideals of life, liberty and private property, but it is working for the continuation and the perfection of those institutions which have made the American farmer the most prosperous in the world, and which have brought the American republic to its present state of power and influence in the struggle for the welfare of mankind.
MR. H. C. HOCKEN, M.P., expressed the thanks of the Club to Governor Preus for his valuable address, the members rising and applauding.