2. Pending final adjustment, the settler is protected from the pressing demands of creditors.

3. Pending final adjustment, the settler is relieved of interest burden on debts not represented by asset values.

4. Settlers are made to feel they possess some security of tenure, with the hope of retrieving their position.

5. The responsibility of keeping deserving settlers on their holdings is spread amongst all classes of creditors.

6. The hopeless, inefficient settler can be eliminated in the ordinary process.

7. A fund would be established to which any merchant or trader may subscribe.

8. Settlers would be assured of supplies for current requirements—cropping charges on a cash basis and harvesting charges on a credit basis. The latter provision would considerably relieve the fund.

9. Each estate would bear its due share of expense and thus relieve the Public Account to that extent.

10. Existing creditors would benefit by securing to them the future business of their present clients, and they would be assured of eventual payment therefor.

11. Settlers' prospects would be dependent upon the success of their individual effort.

12. In co-opting the services of departmental inspectors for reports only, an efficient supervision may be developed.

13. By utilising the services of experienced public accountants as receivers, the settler is relieved of anxiety on the business side and is assured of having his financial affairs properly attended to. This will enable him to concentrate on the work of the farm. The creditors would also feel secure in having their decisions carried out impartially.

14. Existing departmental machinery would function without any overlapping or appreciably increased cost. PLAN-SOUTHERN WOOLGROWERS' ASSOCIATION.

Synopsis.

Control. Appointment of separate Board of Trustees, one of whom at least should have a practical first-hand knowledge of the industry. Trustees to have the assistance of Agricultural field officers.

Admission to Plan. All farmers unable to meet commitments to be brought under the control. Trustees to have power to refuse admission to hopeless cases.

Finance. Proceeds of 1931 operations to be used to finance:—

(a) 1932 production. (b) Expenses 1931 production. (c) Any surplus remaining to be used to increase productivity of holding.

Capital expenditure 1931 to be added to past debts. Where 1931 proceeds are not sufficient to finance 1932 production, settler to be carried on through a Government fund, on a conservative basis.

Cost of Administration. To be borne by the community. It was considered that as the finance would be practically provided from outside sources, an effective check would be had on mounting costs of administration.

Moratorium and Writing Down of Debts. Moratorium to operate for all growers admitted to the plan. All past debts, including deficiency on 1931 operations arrived at as set out, to be funded for five years, interest at 3 per cent. per annum. All debts to be revised at end of five years and placed on permanent basis.

Comment. The requirements of the plan are reasonable. The funding of debts at 3 per cent. interest however, will probably not give as equitable a result as the proposals embodied in your Commissioners' recommendation, whereby excess liabilities are suspended free of interest for a period and the remainder made subject to 5 per cent. interest on unsecured debts, and varying rates on secured debts according to agreement. As regards the provision for carrying on operations, it is felt that the plan recommended will meet all requirements in that connection.

APPENDIX No. 5.

COST OF PRODUCTION.

Average figures covering 12 typical farms as supplied by the Hon. T. H. Bath. Horse Traction (No Sheep). Average acreage - 1,002 acres Estimated cropped for market - 280 acres Average yield - 4,106 bushels 30 acres used for growing 40 tons hay for 8 horses. 20 acres used for growing seed wheat. Total area cropped - 330 acres Superphosphate - £102 - 14s. - 0d. Wages (excluding own remuneration) - £184 - 18s. - 0d. Machinery parts and repairs - £52 - 2s. - 0d. Oil, bluestone, and sundries - £31 - 6s. - 0d. Cornsacks and twine - £76 - 10s. - 0d. Rates and taxes - £32 - 8s. - 0d. Interest on borrowed money - £115 - 14s. - 0d. Insurance - £30 - 14s. - 0d. £626 - 6s. - 0d.

Notes: (1) These costs do not include— (a) Farmer's own remuneration. (b) Oats for horses. (c) Depreciation. (2) The above cost is equivalent to 44s. 9d. per acre of acres marketed = 3s. per bushel, or 38s. per acre cropped. (3) Adding 4s. per acre of acreage marketed to cover depreciation, and assuming that for a relatively small area cropped the wages (£184 18s.), would provide the farmer with sustenance and casual wages, the costs work out at 49s. and 41s. 5d. per acre respectively, or 3s. 3d. per bushel marketed.