negotiated for settlement the particular items of negligence for which we considered deductions should be made, as, for instance:—In protecting and caretaking: (a) delay well into wet months before roofing and screening was effected; (b) covering by tarpaulin instead of roofing by ordinary method of g.e. iron; (c) failure to patch or sew burst bags; (d) insufficient and inefficient screening; (e) bad stacking with insufficient ties, dunnage, and drainage; (f) not taking prompt remedial measures in re-stacking, re-roofing, etc., after damage once caused, whether by weevil, flooding from below, mice plague, or fire, etc. In re-conditioning, re-bagging, etc.: (g) extravagant use of sacks; (h) undue cost of secondhand sacks; (I) protracted delay in work of reconditioning; (j) exorbitant rates for labour; (k) lax supervision. Where no negligence has been alleged by the Scheme to the agents, and the working costs and re-bagging percentages are responsible, the agents' claims are paid in full. After duly considering the first year, in wheat handling for the Scheme, we have fixed as a limit of country stacks the following rates as the maxima which we should not allow as being excluded from the charge of negligence (any-thing over these rates we regarded as being the causes of negligence in one or other of the directions indicated above):—Working costs of re-conditioning including price of sacks, 3½ d. per bag, or alternatively price of sacks purchased, 7s. 9d. per dozen, with working costs 2¼ d. per bag. Percentage of bags in stack to be re-bagged, 21 per cent. At the port of Fremantle the maximum rate that we propose paying to an agent for re-conditioning is 1.3d. per bag of the total quantity of the wheat handled there.