present: J, O. Giles, Esq, (Chairman) H, H, Paynter, Esq., B. L. Clarkson, Esq., F. E. Venn, Esq. JOHN FREDERICK MULLEN, formerly manager of the National Bank, sworn and Examined: 9388.By the CHAIRMAN:I understand you have come here prepared or anxious to interview the commission in regard to certain matters; therefore. I invite you to make a statement?—I want to deal more particularly with the dairying industry because I believe I am acquainted with it. It seems a scandal that Western Australia should import one million pounds worth of dairy produce while we could produce it in the State. I gave an address at Bridgetown some time ago in advocacy of the establishment of a butter factory. I told the people they would have to produce a certain quantity of milk, and that they would require 700 cows before I could establish a factory. They formed a committee to find out what number of cows they could get produce from in the district, and they found only 120. I said I could not be like the government and build a factory without the produce was assured. If I leave a copy of my address with you that you that is almost sufficient evidence, I think. It was published in the Sunday Times of 25th July, 1915. They also published an interview with me in regard to dairy farming. Having had some experience in New South Wales and in the dry portion of Victoria, where they cannot produce butter without irrigation. I have had a great deal of experience in this matter. In the South-west they could carry on without irrigation by ensilage. But if there is irrigation, you can produce more butter. I only allude to the ordinary cows, not the "super-cows," and the ordinary cow, not the war time cow, will yield 250lbs, of butter in a year. I have papers here which explain the exact cost of a factory. A factory would cost about £1,300, that is, one which would turn out five or six tons per week. I will leave the papers I have with the commission to peruse. I think we should do here as they did in the Eastern States, namely, offer a bonus of so much per ton for butter exported. In Victoria, that brought about the existence of a lot of creameries. That will be the best way to put the industry on a sound footing even in this State.

9389. By Mr CLARKSON: Do you think it would be good policy for the Government in an indirect way to subsidise the farming industry by way of offering cheap freights and cheap water? - I think that would be a better policy than to allow a man to go off the land

(The witness retired.)

JAMES MORTIMER McFARLANE, Produce and Dairy Merchant, sworn and examined:

9390. By the CHAIRMAN: For how many years have you been established in the dairying business in Western Australia ?- About 15 years. I am the principal of the firm of McFarlane & Co. We are in business in Perth, Capel, and Kalgoorlie. We have a separating station for table cream at Capel, and buy milk from the farmers and separate it.

9391. Were you connected with the Busselton butter factory?- Yes, for 13½ years. Some 15 years ago I was approached by Mr Crawford, who was then the dairy expert to the Government, to take over the Busselton butter factory, which was then lying idle after having been run for a short period as a co-operative concern in which it failed. He wanted to know whether I would take it on with a view to handling it satisfactorily. The Government were good enough, with Mr. Paterson's assistance, to arrange for the co-operative company down there to give me a lease of the place for five years, the first year of which I was to be free of rent, a progressive rental running up to ¨£1 a week to go on afterwards. During the best week of the first year in which we were running, we made four boxes of butter, equivalent to 2cwt. I have been in the habit of looking upon the butter industry, and its kindred industries, as a side line to my trading business. I am an indentor and importer of lines, and out of these I make my living. We continued for several years at the time the prices being fairly good. The farmers had some help - in that we had a duty on butter, but with Federation altogether. The result of the wiping out of the duty was that the farmer was not able to get a very high price for his fats for butter making, and there was no encouragement to the industry to advance, or for men to go in for the industry. The duty constituted a protection in this State, and in the Eastern States for many years things were at low level in regard to the prices that were being paid. The London parity worked out in Victoria at something like 88s to 90s., and 100s was regarded as a high price. After the expiration of the first five years, we renewed for a further five years, sometimes had one. Then there was a third term of five years arranged for, and when 3½ years of that time had expired, Mr. Gale and one or