1931

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It is suggested that the overdrafts be apportioned to the trading banks either on the basis of their present interests in the industry or in ratio to total deposits in this State.

Part 2 of the Plan should operate until 31st March, 1933, and may then be renewed by legislation.

CONDITIONING DEBTS.

As already stated, the compulsory adjustment of debts shall proceed only in respect of settlers admitted to Part 2 of the Plan. The measure of relief shall be ascertained accordingly to the productive value of the settler's farm and its capacity to pay interest on mortgage at 5 per cent. and other fixed charges, each case to be dealt with on its merits. The excess liability thus arrived at should be apportioned amongst creditors rateably, according to their interest in the settler's debts—unsecured creditors abating before secured creditors—placed in suspense for such a period as the Trustees may determine, not exceeding five years, and be free of interest charges.

Upon return of the industry to normal conditions at any time within the period of give years, and at the discretion of the Trustees, accounts shall be reviewed and the then estimated excess of liabilities over assets value finally written off.

FLOUR ACQUISITION.

In view of the fact that the community received its flour for home consumption at a price something below the cost of production, your Commissioners recommend the introduction of a Flour Acquisition Act, which will enable the Government to fix a price for home consumption. The Flour Acquisition Act should be operative only until such time as the wider proposal for the fixation of Australian price on wheat for home consumption or other ameliorative effort shall have been made effective by Federal legislation.

Your Commissioners recommend the moneys derived under the Act be paid to the Trustees and used as a contribution to the "Fund," and at the close of the fund the residue of the Flour Acquisition contribution be paid into Consolidated Revenue.

CO-OPTING SERVICES OF AGRICULTURAL BANK INSPECTORS.

The Commission recommends that in the present crisis the Trustees of the Agricultural Bank make the services of their field inspectors available to "controlling creditors" under the Plan and to Receivers under the Farmers' Debts Adjustment Act, for purposes of periodical reports. This facility should make for all-round efficiency in supervision with little or no additional expense.

COSTS OF ADMINISTRATION OF PLAN.

The following payments shall be made by the Trustees from the "Fund":—

(a) All expenses incurred by the Trustees in carrying Part 2 of the Plan into effect, including rent of offices, salaries or wages of any person employed by them.

(b) Such remuneration of the Trustees as may be determined by the Government in terms of appointment.

RECEIVERS.

A Receiver appointed under the Plan shall be entitled to deduct from the gross farm revenue such remuneration and expenses as are prescribed under the provisions of the Farmers' Debts Act, 1930-31.

PART 4.

AGRICULTURAL BANK.

As the State through the Agricultural Bank has approximately ten million pounds invested in the wheat and wool industries with an outstanding interest bill thereon, approximately of a million pounds, it would not have been possible for your Commissioners to make inquiries into these industries without in part considering the affairs of the bank its method of finance, and administration.

Out of the 12,500 settlers who have liabilities on which your Commissions are asked to report, 8,830 are clients of the bank. The exact figures showing the liabilities of settlers to the bank are given in answer to Question 3009 of evidence of Mr. McLarty. Under the Agricultural Bank Act, 1906-30, the affairs of the bank are administered by three Trustees, viz., the Managing Trustee (a permanent official) and two co-Trustees who are appointed by the Governor in Council for a term of two years. The remuneration paid to these two trustees is five guineas each for every sitting, but the maximum amount to be paid to each Trustee is fixed at £250 a year. The two Trustees are also paid three guineas a sitting, when sitting as members of the Industries Assistance Board: the latter payment is not taken into account when arriving at the £250. The two co-Trustees have outside interests to which the major part of their time is devoted.

Your Commissioners thus find that a fund of over fourteen million pounds—that is if all clients of the bank, including wheat and sheep farmers, are included—is now being administered by one gentleman giving his whole time to the business and two others giving part of their time to such business.

The evidence of the officials indicates that insufficient supervision is given to the accounts of the clients.

The Managing Trustee has been over-loaded with work, not only is he the Managing Trustee of the bank, but also of the Soldier Settlement,

Group Settlement, and the Industries Assistance Board.

The Farmers Finance and Development Act, 1930, has apparently introduced a fresh element of control in the management of the Agricultural Bank affairs.

Under that Act a Board of three members has been appointed. The Chairman of the Board is the Managing Trustee of the Agricultural Bank; one