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Chapter 1

The Hard Years - 1880's

A s the 1880's were ushered in, much of Western Canada, then called the North-West, was virgin country. Those farmers who came to Manitoba were truly some of the early pioneers of the country. Life, for many, was hard.

There was a Manitoba land boom which attracted many new settlers from Ontario and Great Britain which was suffering the effects of an agricultural depression. Manitoba's population had risen from over 25,000 in 1871 to over 62,000 by 1881. Meanwhile, the town had a good selection of businesses and churches by this time. The frenzied boom to buy up Manitoba real estate ironically began out of Portage la Prairie after the announcement that the CPR was coming through the town in 1880.

The boom abruptly halted in about 1882 and an agricultural depression loomed close. It wasn't until 1887 that farmers would see relief from low grain prices and poor crops. Droughts and early frosts hit hard in several years. But there were good crops in other years, and the promise of more attracted increasing numbers of settlers.

The fur trade had given way to the grain trade and wheat was the dominant crop. Similarly the horse gave way to his mechanical replacement, as steam was harnessed for farm power.

Portage la Prairie in 1884
Portage la Prairie in 1884                                                                          - Manitoba Archives

But to the Manitoba farmer of the 1880's, it was a period of uncertainty. Wheat prices hovered around 75¢ to 80¢ a bushel. While the last railroad spike driven in 1885 heralded a new era in Canadian history, ironically, the railroad and the milling companies became major sources of farm frustration.

These led to early farmer unions, grain associations and cooperatives. And, as the farm movement grew, it sparked the merging of two grain associations to form the United Grain Growers Ltd., after the turn of the century, and the establishment of provincial wheat pools. Farmer discontent over government farm policy on freight rates and other matters also hurled the Progressive or Farmer's Party to brief prominence in Provincial and Federal governments in the 1920's.

The year 1885 would also see a rebellious Metis leader, Louis Riel, hung after leading the North West Rebellion.

In 1883, Manitoba farmers complained bitterly about freight rates and grist tolls, according to the Nor'West Farmer and Miller. Portage had a new large grain elevator with capacity of 135,000 bushels (Elevator A) built adjacent to the Ogilvie mill. It was the largest in Manitoba.

Assiniboine Mills and Elevator - 'A'
Assiniboine Mills and Elevator "A"                                                           - Manitoba Archives

The town had become a major agricultural centre whose farmers were praised as some of the best in the North-West. Their efforts and successes contributed largely to the success of agricultural businesses and the town in general.

By 1883, the population had swelled to 3,500. But, by then, the land and building boom had ended. In the spring of 1884, many houses stood empty as sad reminders of the earlier boom.

The population of the place is now about 3,500, against 500 in 1880, and the buildings are all of a class equal to anything in Ontario in a place of the same size. Every implement manufactured of note in Ontario is represented here, and a number of the best American goods are sold here as well by local agents.

The Mercantile line, too, is quite up to the necessities of the country and the demands of the place. There are about twenty general dealers, some of whom do considerable jabbing and wholesaleing, for which, as we have shown above, the place is most admirably situated; eight or nine clothiers, five hardware dealers, three stationers, three druggists, two jewellers, three boot and shoe dealers, seven or eight grocers, and all the other classes

of trades usually found in a thriving go-ahead town. Rents are low, fuel cheap, cordwood, best, $3 to $4 per cord, and all the other requisites of house-keeping in proportion. These several advantages - the fact that every necessity for building, house-keeping, farming, etc. can be got here in many instances as cheap as in Ontario, and in all instances at the lowest Manitoba prices - should be strong inducements to the farmer as well as the mechanic to locate here. The "boom days" of the North-West are virtually at an end, and all new comers, as well as actual residents must now conclude that money to be made in this country must be made in the ordinary legitimate callings of life - farming, manufacturing and trading - excepting, of course, the professions.
from "The Nor'West Farmer & Miller"
First Board of Directors 1884
The Charter of 1884
The Charter of 1884

These and other concerns led early settlers to seek security. And out of this need rose The Portage la Prairie Farmers Mutual Fire Insurance Company.

Very little is recorded about the company's first years but listed in 1884 as its seven founding Directors were: Kenneth McKenzie (Sr.) president, Maxwell Wilton, Hugh Grant, Charles J. Green, George Tidsbury, Lachlan McLean and James Whimster.

All were active in community affairs and all but one were on the Portage Rural Municipal Council. Whimster and McLean, in fact, served on the very first council in 1879. There were 31 names listed on the charter as "freeholders" or policy holders.

Kenneth McKenzie
Kenneth McKenzie

Kenneth McKenzie

It was a time when men of leadership were needed. Kenneth McKenzie was such a man. Born in Scotland, he moved, like many of his neighbors, to Manitoba from Ontario. McKenzie was a respected member of the community, who took a keen interest in community affairs.

He was president of, and an active member in, a number of organizations and societies and farmed in what was eventually called Burnside near the bank of Rat Creek.

In 1883, McKenzie had roughly 700 acres under cultivation while his sons, further west, farmed about 1,000 acres.

In a letter to the Nor'West Farmer and Miller in January, 1884, McKenzie tells of farming in Manitoba since 1869 after 27 years in Ontario. He also chastised farmers, who had good crops in the past, for getting careless, neglecting fall ploughing and not seeding earlier and thus suffered more severely from the frost that hit in 1883. He also called for lower duties on lumber and agricultural implements.

McKenzie was President of the Portage Mutual from 1884 to 1887. In 1898, he was made Honorary President.

There are many theories why McKenzie and the others formed the company. It is generally believed that like many from Ontario, he had witnessed the creation of fire insurance companies and particularly farm mutuals.

The Directors appointed A.A. Watson as its first Manager and Secretary-Treasurer in 1884. His house was the first company office and much of the business was done there. Watson, a town Councillor in 1884, remained with The Portage Farmers Mutual for six years. In that time, the company did relatively well. In 1884, it wrote $61,000 in risks with 61 policies in force, rising quickly to 162 and $201,610 in risks by 1885, to $723,925 in 1887 and $787,080 in 1888.

However, in probably the first company scandal, Watson proved unfaithful to his trust. After burning some of the ledgers and minute books for the first four years of the company's existence, he left in 1890 or 1891 with $895 of the company's money under his arm. Subsequent company records show, in 1891, he offered $800 to the company to release him from liability.

Original Policy Register
(One of the books NOT destroyed by Mr. Watson)

Original Policy Register

Elias Brown
Elias Brown

Watson was replaced by Elias Brown, Ontario-born, a farmer and a school trustee, for one year. In 1888, Brown had been elected as president.

The same year, the Urban Mutual, another small Portage insurance company, opened its doors offering fire and lightning insurance for town residents and businesses.

At The Portage Farmers Mutual, policies were sold on the premium note basis. The early farmer Directors realized there was little cash available to the farmer until after harvest. Therefore, the applicant signed a premium note, and the Company carried the risk until the first of November each year, when his premium would fall due.

That later was changed to October 1. However, based on the amount of risk insured, the farmer was, and still is, assessed a premium. First, an insurance rate of from ¾% to roughly 2% was applied to the amount of insurance to get the premium note. A $50,000 policy, therefore, with a 2% insurance rate, would produce a $1,000 premium note.

A premium note of 1889
A premium note of 1889

The farmer signed the note guaranteeing to pay this premium. Then, once a year, a percentage assessment levy was made against the insurance. Today, the percentage is determined in April after the losses and operating costs for the year have been calculated. The farmer doesn't need to pay until October 1, however.

Until 1888, the assessment levy percentage was 10% but rose to about 20% of the premium note in the early 1940's. An assessment levy of 20% on a $1,000 premium note means a premium of $200. If the insurance rate and assessment levy remain the same for each of the three years, the farmer pays only $600 of the $1,000 premium note.

When cash premium policies were introduced much later, there appeared to be a wide gap between the premium paid on cash policies and those under the assessment system. Today, there is no difference in the premium for an equal risk under both forms of insurance.

The early Directors were required to take personal loans to cover claims and operating expenses until the yearly assessments could be collected. In fact, for the first few years until a cash reserve was built up, the Directors would collect the premiums more frequently than once a year - usually after a large loss. In 1889 to 1890, the Directors signed bank notes for sums ranging from $1,000 to $1,175, large amounts for the time.

The risk to the Directors was reduced by the fact they and community shared in the losses. A fire was a major event in the early farmers' lives and the isolation of farm families developed a certain kinship and concern for neighbors. When a house or barn burned, the community, including the Directors and policy holders, would help to rebuild it. This helped to defray company costs and kept the assessment levy low.

Page from an 1888 Cash Book.
Page from an 1888 Cash Book
Preface History Home Chapter 2
Please note: The information provided within this page was originally published in 1984. Any "current", "new", "present" or other such references within this information were correct in 1984 but are not necessarily so now.
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