member is the Under Treasurer for the time being of the State, and the third is nominated by the Government.

Under Section 12 of the Act, all securities and assets of the Agricultural Bank are vested in the Board, and the Board is to have sole control of all funds, and it is to have sole discretion as to the amount of money to be advanced by the Agricultural Bank (Section 32).

Your Commissioners find on inquiry that the third member of the Board nominated by the government is the Public Service Commissioner of the State.

It is difficult to conceive at the present juncture of affairs in Western Australia what time the Under Treasurer and the Public Service Commissioner of the State can afford to devote to the affairs of the Agricultural Bank, Soldier Settlement, Group Settlement, and Industries Assistance Board.

The Commissioners realise that it may have been necessary to pass the above-mentioned Act for the purpose of finance to enable the '31-32 crop to be put in and taken off by the Agricultural Bank clients. Your Commissioners, however, are of the opinion that the conduct of the business of the Agricultural Bank, Soldier Settlement, Group Settlement, and Industries assistance board, should be left to the Trustees of the Bank.

Your Commissioners recommend that:—

(a) The development of new wheat and sheep areas should cease and a policy of consolidation be adopted.

(b) Settler's accounts should be reviewed systematically. The principle enunciated by Mr. McLarty in his reply to Questions 3035 to 3038 may be quite correct in theory, but in practice it has failed lamentably. Not only has there been a large accumulation of interest, but the supervision of the farmer's spendings, farming methods, and care of plant and stock has been most lax.

(c) Advances for fallowing should be discontinued. The creditors get all the benefit of the fallowing, and the Bank has to add the costs thereof to its capital cost.

(d) A Chief Inspector should be appointed, whose duty would be to travel and inspect all accounts at the offices of the District Inspectors, and report fully from time to time in respect thereof to the Trustees, and confer with them thereon.

(e) Two Trustees should be appointed to assist the Managing Trustee. The term of their appointment should be for at least five years, at a proper remuneration. The two co-Trustees should devote the whole of their time to the business of the Bank.

Your Commissioners are of opinion that the last recommendation is the most important one. If two permanent co-Trustees were appointed, it is thought they would be able, with assistance of the Managing Trustee, to restore order into the affairs of the Bank.

The appointments of all Trustees should be constituted that they would be free from any possibility of interference by Members of the Cabinet or Members of Parliament, and further, that the officials of the Bank should be under the control of the Trustees. Your Commissioners suggest that the major problems awaiting solution by the Trustees at the present time are:—

1. Esperance settlement 2. Miner's settlement, South of Southern Cross. 3. All wheat areas outside the 20 Mile radius of existing railways. 4. sheep areas West of the Great southern Railway. 5. The placing of the duties of the District Inspectors on a more business-like basis.

In order that the importance of paragraph 5 may be appreciated, your Commissioners quote give of the areas and amounts advanced as controlled by each District Inspector under the Agricultural Bank.

NARROGIN. District Inspector Mitchell, area 13,500 square miles embracing 8,640,000 acres, amounts advanced therein £1,853,529, capital: outstanding interest thereon £231,713—number of settlers 1,580.

ESPERANCE. District Inspector Rodgers, area 1,620 square miles embracing 1,136,800 acres, amount advanced £500,00, outstanding interest £86,000—number of settlers 359.

BRUCE ROCK. District Inspector Gillies, area 4,500 square miles, embracing 2,880,000 acres, amount advanced £1,127,000, outstanding interest £91,700—number of settlers 840.

KELLERBERRIN District Inspector Buttfield, area 5,000 square miles, embracing 3,200,00 acres, amounts advanced therein £1,515,357, outstanding interest £139,900—number of settlers 1,000.

KATANNING District Inspector Kelso, area 17,000 square miles, embracing 9,680,00 acres, amounts advanced therein £835,397, outstanding interest £108,022—number of settlers 1,440.

Your Commissioners examined at length Mr. E. A. McLarty, Managing Trustee, and Messrs. C. D. Mitchell, E. G. Kelson, L. D. Buttfield, G. S. Gillies, and H. F. Rodgers, District Inspectors of the Agricultural Bank.

Perusal of the evidence of these gentlemen will be illuminating to any person who wishes to appreciate the unsatisfactory position of the affairs of the Bank and the need for improved business methods being introduced into the management of its affairs.

Mr. Carlisle, one of your Commissioners, is an Officer of the Agricultural Bank, and from considerations of propriety does not wish to be associated with this part of your Commissioner's report or to comment thereon.