The Gasoline ‘Strike’ of April ’40

CVA 1495-33 - What We Have We'll Hold! [David Spencer's Ltd. employees and unidentified man during gasoline strike of April 1940]_

CVA 1495-33 – David Spencer’s Ltd. employees and unidentified man during gasoline strike of April 1940.

The week-long, so-called ‘gasoline strike’ of April 1940 should probably more accurately be called an embargo or boycott. This wasn’t a withdrawal of labour, thus inconveniencing management and pressuring the latter to negotiate with labour’s trade union representatives (the common meaning of ‘strike’). Rather, this was an act of the oil companies of the day to pressure consumers to bring pressure to bear on their elected representatives. This episode had that effect, but probably not quite as the oil companies had in mind.

According to Vincent Bladen, in his Introduction to Political Economy, a central factor leading to the 1940 embargo was BC’s geography. He quotes Stephen Enke from an article written shortly after the embargo:

With a former base price at Vancouver of 27 cents an imperial gallon for ‘regular’ grade gasoline… retail prices in interior parts are in most cases 35 cents, and sometimes in excess of 45 cents. In the smaller towns retail margins are usually 7 cents and frequently more. Such spreads are not always a reflection on high retailing costs, however, but of collusion between a handful of dealers who know that the next settlement is 80 miles away. (Enke’s article from Quarterly Journal of Economics, May 1941 and quoted in Bladen)

The province of B.C. appointed a Coal and Petroleum Products Control Board in 1938; the Board issued an order fixing the retail price of gas.

That ‘tore it’ as far as Big Oil was concerned; an injunction was sought and a legal tussle was begun. The Supreme Court of Canada, in April 1940, ruled that the province was able to establish the Control Board.

Having failed to defeat the legislation in the courts, the oil companies decided to “strike”. On April 26, they agreed to furnish no gasoline to dealers in British Columbia. Stocks quickly ran out. (Bladen)

B.C. Premier, Duff Pattullo’s government took a surprisingly tough and activist stance vis-a-vis the oil companies. The Assembly amended the Act to allow the Province to

take over existing plants in the event of another emergency. Amendment after amendment proposed by opposition ranks went down to defeat as division after division revealed the government and C.C.F. members voting together against Conservative and individual Liberal support. (Chilliwack Progress, May 15, 1940)

A compromise agreement was reached between Big Oil and the Control Board. In most regions of the province, the consumer would enjoy a two-cent per gallon cut in gas prices. The retail dealers and wholesale distributors would each be expected to eat 1 cent of this cut.

The Gasoline ‘Strike’ of 1940 was over.

It isn’t clear to me whether the amended B.C. Act was ever proclaimed into law. It seems to me that it would have been vulnerable to legal challenge. The Supreme Court of Canada was not until 1949 the highest court of appeal. At this time, the oil companies could have sought leave to appeal to the Judicial Committee of the Privy Council in the U.K.

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