(g) The competition by Associated Banks for business. (h) The more than forward policy of the Agricultural Bank. (I) The purchase of Estates for Soldier Settlements at high prices. (j) The period of high prices for produce—such prices were discounted by the diminishing purchasing power of the Australian £1—gave farmers a false idea of their prosperity.

  The whole industry was pyramided on good prices and lavish credit, without due inquiry being made into production costs, world production of wheat and the value of the assets on which such credit was being extended. The Government through the Lands Department and the Agricultural Bank, together with all classes of the trading community, including Associated Banks, are responsible for the accelerated and uneconomical development of the farming industry in Western Australia.

  The acceleration of the industry opened up an area of light land which did not pay to crop and in many cases settlers acquired too much land and became land poor having to pay land tax, road board rates, interest, instalments of principal, and land rents in land which was not producing.

  Had many of the farmers taken advantage of the good prices ruling in the early part on 1930, and sold straight out instead of storing their wheat and obtaining advances against such wheat from the wheat merchants, their financial position would not have been so bad as it is at present. In the 1929-30 harvest the farmer who stored, not only lost his market, but in many cases suffered a substantial monetary loss and may have to pay to the wheat merchant the difference between the amount of the advance made to him and the price at which the wheat was sold against him. It is estimated that the loss so suffered would be in excess of £470,879, being the amount now outstanding.

Small Wool grower:

  These settlers are in a very difficult position. Under the present conditions their holdings and stock are over-capitalised, due in some cases to high repurchasing costs, but due generally to the high cost of improvements and stock. The stock have been purchased at high prices relative to high prices of wool current at the time of purchase. The settlers showed a keen desire to purchase the stock at high values and their judgement together with that of the stock agent has been falsified.

  The settlers in districts where breeding can be accomplished are not in such prospective difficulties as those who are only able to run dry sheep.

  It has been suggested by the Katanning Chamber of Commerce that sheep should be appraised at present values, and the proportion of that value of the debt should continue to be considered as secured, and the balance should be carried as unsecured. This course, in the opinion of your Commissioners, would be very inequitable, but it must be emphasised that it is the duty of the stock agents (where they are concerned) to provide sustenance for the settler (which at present, in many cases, they are doing) and also for the sake of the combined interests to provide super. for top dressing to maintain the properties potentialities for raising stock and keeping their security in good and profitable condition.

  Your Commissioners are of the opinion that in order to develop means of making the farms more self-contained, and to extend their earning power, encouragement must be given to dairying, pig-raising and fat lamb production. In most of the districts affected so adversely, the rainfall is abundant although perhaps there may be some difficulty during the summer months to provide the requisite fodder. There are means to overcome this difficulty. Where a bill of sale over all live stock is held by financial institutions, it would be to their interest to provide funds to the settler for purchases of cows or pigs to enable him to increase his revenue and, where a clear security is possible, assistance in the same direction should be made available under the recommendations made by your Commissioners to provide the necessary funds.

  It is generally considered that wool will be the first to respond to better trading conditions.
  
  The Agricultural Bank should carefully scrutinise the holdings of some of the settlers, as some hold land which is only an encumbrance in the way of interest, land rents, rates, etc., as no attempt is made to profitably use it. It is important to encourage the farmers to continue slowly improving the carrying capacity of their properties, for only by this means is it possible to give hope for the future.

  Be the causes that they may, the whole farming community is now faced with an almost impossible position. The farmers in many cases are loaded to such an extent with liabilities that if the present depression of wheat and wool prices continues, their position seems hopeless. The farmers ask for a writing-down of the principal and interest payable under mortgage over their properties, and for a writing-down to their unsecured or partially secured debts. If this is not done, they say it is impossible for them to carry on as they have no "security of tenure."

  By this phase they mean that they have no certain expectation of being allowed to remain on their properties as by adverse action of mortgagees or creditors they may be dispossessed. What the farmers really ask for is a moratorium.

  Your Commissioners have attached to their report the following statements which should be read in conjunction with the statements of Mr Thomson, before mentioned:—
  (1)  Statement of the Wheat Pool—Appendix No.2.
  (2)  Extracts from Statements from the Nationalist Party, Appendix No 3, being—Part (1)—Pa. 2-8. Part (2)—Pa. 32-38.