the farmers took it up. One cannot expect them to take up an industry in which the prices are not remunerative.

9399. By the CHAIRMAN: The trouble of getting suitable trains has to do with the cream not coming along? - When a farmer has surplus cream we always tell him not to mind putting another cow on to the farm. We will take all the surplus and do what we can to encourage the farmer to make butter for himself and supply it to his neighbour. The farmer has to be shown how to make every shilling he spends pay. The Eastern Goldfields line is the best line for carrying this class of produce, because of the express trains running at night in the summer time.

9400. By the CHAIRMAN: Is there any other firm manufacturing butter in Perth? - No.

9401. By Mr. CLARKSON: What do you pay per gallon, on the average, for milk in Perth? - My contracts are made with the people in the outer suburban areas, because they give us two deliveries a day including Sundays. We contract at 1s. 1d. per gallon. I know that there are contracts made from 1s. up to as high as 1s. 3d., but the milk is only supplied in certain months of the year. We take it from the outer suburban people all the year round, and it is our business to get out of our contract on the right side. During the summer time the contract supply is really short of our requirements. If we get a four days' heat wave in Perth, all the milk supply we have is a mouthful compared with the requirements of the drinking public.

9402. Could you not buy milk from the country? - I am only dealing in milk in a small way compared with what I used to do. It takes 2½ gallons of milk to make 1lb. of butter on the average. In order to stimulate the industry here we need something besides butter factories. We need some means by which the farmer can see that he is going to get a proper reward for his labour, and a factory will not do that. We are always in competition with the Eastern States. I believe, after the war, things will revert to what they were before the war, namely, that there will be a low price again. There is one thing which hit up the industry very badly from the point of view of the farmer, and that is the minimum freights. The railways have what they call a zone system. I have been urging upon Ministers during the time I have been associated with the business to have this minimum freight abolished. This is a heavy impost on the butter fat that the farmer is sending in and also interferes with the quality. A farmer can send in 10 gallons of milk, or cream, for say, 9d. If he was actually sending that 10 gallons, he would have no reason to complain of the cost per pound of fat, but to enable us to make decent butter, before the cream goes bad, owing to the lack of facilities for holding it, the farmer has to send the cream in two or three times a week, though even this method does not supply the butter factory's requirements. The result is, he has to cut that 10 gallons down to three, but has to pay the same amount for three gallons as he would have to pay for the 10. Another difficulty is in respect to cans. On the face of it the railways seem to be treating the industry liberally, but the loss in respect to cans is a very severe one. The non-delivery of the cans is vexatious enough, but the loss is even worse. I had an experience between here and Capel for which I can vouch. We have a very close system of checking with our cans, and have them numbered and our name on at both ends. Our rail notes are made out in triplicate. Immediately the cans are put on the rails to be consigned they are signed for by the railways, and we take every precaution against loss on our own part. During the last 12 moths we have lost three cans valued at 30s. We put in claims against the Railway Department but the other day we received a reply from the Commissioner stating that he would not entertain the claim as the cans were consigned at owner's risk. I asked what rate we would have to pay if the cans were consigned at the Commissioner's risk, and I was informed that I would have to pay full parcels rates, which would equal to 3s a can. I can think of no more direst hit against the industry than such a thing.

9403. By Mr VENN: Are the cans stolen? - The Railway Department say that they are stolen. As soon as a can is found to be missing at the other end we put in a claim, but our cans are never picked up. We are told that the railways carry them for nothing and that they go back free of charge. I have asked that they should impose a charge and accept some of the responsibility, but I am informed that this would involve a costly system of book-keeping and would not do. There is no relief in this respect, and it is a serious handicap to a struggling industry.

9404. By the CHAIRMAN: What are you paying for butter fat? - 1s 5d. When the proclamation came in the Federal Prices Adjustment Board fixed the price at 1s. 4d. This amount has been paid up to a little while ago when we voluntarily raised it to 1s. 5d. We are not allowed to sell above a certain price because the selling price was also fixed by regulation. In connection with the moisture and overrun, we are also tied up in regard to the profit we get out of it. We are paying 1s. 5d. now and are selling at 1s. 5d. That is the wholesale price. The retail price is 1s. 7d. The overrun is our profit and is what we work on. We are supposed to have 16 per cent. of overrun, but we find, taking the moisture tests, that this runs from 12 per cent. to 16 per cent. Very much depends upon the condition of the cream that comes in, its temperature, and so forth. I have just returned from a trip East, where I have been looking into the dairying business with a view to bringing our Perth factory up to date, but in view of Mr, Mitchell's remarks, as reported this morning, and other remarks which have been made lately, it has taken the snap out of my intentions, and I am afraid I shall not put more money into the concern. The handling of mixed cream requires close attention and I see the necessity of establishing the matter here on the same basis as on the other side, so that we may raise the tone and quality of the butter we are selling.

9405. You will have to go in for pasteurisers? - Yes, at present we have the old-fashioned churn and worker, and we would have to bring the factory up to date.

9406. What proportion of your total receipts of cream does the what belt bear to the rest of the State? - About one-third. During the good months of last year we were making between two and three tons of butter per week.

9407. If you can control that quantity of cream you would kill any other factory that was established? - Not if the Government are prepared to lose money. Take Bunbury, the best example we have in