PART 2. PLANS SUBMITTED FOR LIQUIDATION OF FARMERS' DEBTS. Plans were submitted by—

(a) Mr Thomson, Westralian Farmers; Limited.

(b) Nationalist Party of Western Australia.

(c) Wheatgrowers' Union of Western Australia.

(d) Katanning Chamber of Commerce.

(e) Kellerberrin Zone of the Wheatgrowers' Union.

(f) Council of Industries of Western Australia.

(g) Mr White, Director under The Farmers' Debt Adjustment Act.

(h) Southern Woolgrowers' Association.

Certain of these plans incorporate the schemes submitted to the Government of the State as mentioned in the Commission. A synopsis of each of these plans, with accompanying comments of your Commissioners, appear in Appendix No.4 to this report. Statements in regard to the Wheat Industry, with no accompanying plan, were submitted by the following bodies:—

(a) Trustees' Wheat Pool of Western Australia.

(b) The Executive Primary Producers' Association.

(c) Labour Party of Western Australia.

Not only have past debts to be considered, but finance has to be arranged for future cropping for at least two seasons, as by that time wheat and wool prices may improve and some adjustment of debts may be made on stable values. the cropping for 1931-1932 harvest has be financed in part by—

(1) The Agricultural Bank finding sustenance and super. for many of their clients with moneys provided under the Finance and Development Board Act;

(2) The Merchants and Storekeepers allowing considerable payments to them for last season to be handed to the farmer for the purpose of cropping; and

(3) The Associated Banks and private investors assisting their clients by giving the necessary financial assistance to carry on cropping operations.

It will be seen, therefore, that finance will be required for taking off the 1931-1932 harvest and finance should also provide for the cropping and harvesting of 1932-1933 season. Should the State be asked to assist in the payment or part-payment of past debts and to find part of the finance for the above purposes?

It is generally conceded that it would be a bad principle and precedent for the State to find funds to pay past debts, as it must be remembered, creditors practically joined with the farmers in their expectancy of payable prices for their products, and it cannot be asserted that the State should be involved in private obligations. Further, by focusing on the needs of assistance to farmers for future production, correlates the best chance of enabling creditors to recover or partly recover the past debts.

The predictability of any plan and the finances needed to carry same into effect had to be carefully considered, also the effect of any plan on the investing public and the mercantile community had also to be taken into account.

It has been suggested that the conditions of Western Australia at the present time call for interference with contractual obligations. Your Commissioners cannot agree with this principle. Finance at the present time is sufficiently difficult without being accentuated.

It is the considered opinion of your Commissioners that any such interference at the present time would be in the worst interests of the farmers. The flow of such credit as exists at the present time would be stopped, and capital would be driven out of the State. If the present high level costs of production and the existing low level prices of wool and wheat continue, it is immaterial what amounts are written off the liabilities, or to what low rate interest is reduced, as in such circumstances nothing can save the industries of wool and wheat, and a very decreased production must be looked for. It is well for the people of this State to realise this fact and to realise it at once. If the State had money or could command credit for taking off 1931-1932 harvest and putting in the 1932-1933 crop, some of the plans submitted might have received more favourable consideration than they have done. It must be apparent that the State at the present time cannot find any cash for the farming industry.

The financial year closed with the State having a deficit of one and a-quarter million pounds, and the Loan Market is closed against it. Your Commissioners realise the hard position of so many farmers, and that an extension of time is necessary to enable them to meet their obligations and retain their farms. The farmer must, however, realise the position of the State, the pastoralists, and the commercial community as whole is akin to his own.

All must insist on a reduction of production costs, as without such reduction we cannot look for any amelioration in the condition of our key industries—wool and wheat. At the same time, we should not be disheartened but look forward to higher price levels.

You Commissioners do not think it wise to recommend any plan for adjustment of debts with a fifteen years' spread, as at the present time any plan, to be practical, must be limited. Even for a plan limited as to scope and time, finance is essential, and the plan must be so framed that finance can be obtained and capital allowed to remain in the industries and not driven out by reason of writing-down, unnecessary compulsion, or interference with contractual obligations.