Academic journal article Canadian Journal of Administrative Sciences

It All Depends on Your Point of View: An Historical Account of an Ethical Conundrum in Grain Handling, Ca. 1931

Academic journal article Canadian Journal of Administrative Sciences

It All Depends on Your Point of View: An Historical Account of an Ethical Conundrum in Grain Handling, Ca. 1931

Article excerpt

Abstract

In 1931, charges against Manitoba Pool Elevators of cheating their members on weights and grades in order to conceal losses on their grain elevators - and of concealing these activities - were proven accurate by a provincial Royal Commission. This was ironic given that these were the same practices that the Pool had condemned in the private grain trade for 30 years, and that, they had pledged, the Pool would put an end to. This paper describes these events and examines the ethical issues from the perspective of Reinhold Niebuhr's thought. It then briefly examines more current events in the western Canadian grain business to show how they are illuminated by Niebuhr's insights and why certain problems in the grain industry have been so intractable for the last half century. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

JEL Classification: N52

Keywords: grain, weights, dishonesty, Manitoba Pool Elevators, Reinhold Niebuhr

Résumé

En 1931, une Commission royale provinciale a mis en évidence le bien-fondé des accusations portées contre la Manitoba Pool Elevators. Celle-ci était notamment accusée de truquer les poids et les grades - puis de camoufler ces activités - pour dissimuler les pertes qu'elle subissait dans ses silos. La situation était d'autant plus ironique que la Manitoba Pool avait, pendant trente ans, dénoncé les mêmes pratiques dans le commerce privé des céréales, et s'était engagée à y mettre un terme. Le présent article décrit ces événements et examine les questions éthiques dans la perspective de la pensée de Reinhold Niebuhr. Il examine ensuite brièvement les événements contemporains et récents de l'industrie céréalière dans l'ouest canadien et montre que ceux-ci peuvent être interprétés à la lumière de la pensée de Niebuhr. L'article analyse aussi les raisons pour lesquelles certains problèmes qui minent ce secteur ont été si difficiles à gérer au cours des cinquante dernières années. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

Mots-clés: céréales, poids, malhonnêteté, Manitoba Pool Elevators, Reinhold Niebuhr

This paper provides an historical account of an ethical conundrum that arose in the western Canadian grain industry in the early 1930s. The basic facts can be quickly summarized. Since the beginning of grain production in Western Canada in the late 1800s, farmers had complained of the abuse of market power by the private grain trade. In response, they created four large cooperative grain handling and marketing firms to compete wkh the existing companies: the Grain Growers Grain Company (later called United Grain Growers) in 1906 and me three provincial Wheat Pools in 1923 and 1924. The latter came to dominate the grain industry until almost the end of the twentieth century. While me primary objective of all four co-ops was to achieve better prices for farmers, another major point of concern was the belief that the privately owned grain companies cheated them on weights and grades. Fair weights and grades were therefore a major promise made by the Pools to attract business to their elevators.

Notwithstanding this commitment, in 1931 Manitoba Pool Elevators (MPE) was accused of underweighing and undergrading their members' grain in order to pay for a lavish and over-built elevator system. Outraged, the Pool demanded an immediate inquiry to clear their name and so Manitoba Premier, John Bracken, appointed a provincial Royal Commission to investigate the accusations. Astoundingly and ironically, the Commission found MPE guilty as charged. The Pool officials were furious, claiming that they had done nothing wrong and that no one gained personally from what had happened. They then called a special meeting of their farmer delegates, who expressed their "entire disapproval" of the report and fully endorsed the actions of the Pool directors and management (Hamilton, 1975, p. 146).

So here's the conundrum: The company is caught red-handed doing exactly what they had condemned for 30 years. …

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