and depreciation on £40,000, instead of interest and depreciation on something like £90,000. The interest on the trading capital should be borne by the sales. I maintain the cost of production is the actual cost of production on trucks in Perth. Anything beyond that should be put on a percentage to cover it.

10313. By Mr CLARKSON : Is the control at present in force satisfactory from your point of view?—It was not. I have written often on the subject. The system that was in vogue was that whilst I administered the whole of the affairs of the works and carried on other work in connection with sales, the actual spending of the money on the sales and depot was undertaken by the head office. I always maintain that inasmuch as I had to find the money to put the extraneous matters right I should have a voice in seeing that it was economically expended. The system of having one portion in Perth and another in Fremantle did not lend to efficiency. It meant overlapping. Where you probably would do with a staff of 66 per cent . of the two staffs, we had to maintain the two staffs. That is, if we have one staff in Perth and another in Fremantle, by having them all in Fremantle we would probably do the job with 66 per cent of them.

10314. Is that system of control in force now?—The system is exactly the same, but now that the Westralian Framers are going to take over practically the whole of the selling business, I am of opinion that probably the intermediate business will disappear. For instance, I do not see how it would be possible to maintain a place in Marquis-street, Perth, whilst the Westralian Framers have the whole of the country to exploit for sales.

10315. As an actual fact, the conditions you find fault with exist to-day?—Yes, but the change over takes place tomorrow.

10316. You have not received notice that the conditions of control will be changed?—No; I asked to be relieved in July, and an advertisement was inserted for applications. I received a letter telling me of the change that would take place and the system laid down for the conduct of the whole business, but this was not to take place until the new manager was appointed. That proposition was that the manager should control the works at Fremantle as works manager. He would have nothing to do with selling or buying. He would be a works manager pure and simple. The accountant or somebody under the name of general or sales manager, would be in Perth who would do the whole business. Since that time the Westralian Farmers have come on the job, which I presume will upset that arrangement and perhaps what would further upset the arrangement is the fact that the new manager has not arrived and may not arrive.

10317. Which would be in the best interest of the works, that system or that the manager should have sole control and do his own buying, etc? —My idea is that the manager should control the whole staff connected with the works, the accountancy, etc., to be located at North Fremantle, and that the selling should be either in the hands of the Westralian Farmers or their equivalent. The outside methods of dealing with these matters are better uninterfered with red-tape or circumlocution. There should be no one in connection with the production under the manager.

10318. Do the works suffer to any extent by the present system of buying material?—I do not think so. A good deal has been said about the Tender Board, but I think a manager acting with reason has no trouble. For instances, the Tender Board is to safeguard the public, and they would safeguard economy. If I knew there would be a loss I would anticipate Tender Board approval.

10319. Is there any matter in connection with these works that we have not touched upon that you would care to bring under our notice?—We are endeavouring to get a highly efficient machine of standardized type, and not to work on the idea that spare parts should pay our way. The general trend of affairs is that the men are increasingly taking more interest and the foremen are also getting more alive to the fact that in addition to being foreman they are there for the purpose of furthering the concern generally, therefore helping towards the desired end, efficiency.

10320. By Mr PAYNTER: Could you tell us the number before you took over?—The day I arrived there were 602 employees; twelve months after that date we had something like 350, and today we have 247. The output for the first year I was there was very considerable and the output was much greater pro rata to the number of employees when reduced. The final figures for last year's operations are now in course of preparation and are not complete.

10321. By Mr. CLARKSON : When will that report be available?—I should say in three weeks, unless you particularly want it before, when I can give you the information, but not the report.

10322. We should feel obliged if you would give the Commission those particulars?—There is one point I did not mention. The general engineering has increased. Last year the general engineering, practically speaking, equaled the implements.

( The witness retired)

The Commission adjourned.