essential. Those improvements were permanent. We agreed to supply seed wheat and fertiliser for the first crop. I considered that in the nature of capital expenditure, and I was anxious that when a settler had his 400 acres cleared he should not be in a hole and have to go to merchants to get extra credit to put to his first crop in. The money was to be repaid from the first year's crop. The settlers agreed to that. I told them they should not go into a scheme of this kind blindfolded, and that we would advance and the direction in which the advances would be made. They would thus know what they would have to provide to make the scheme a success. I then had a circular prepared and sent to each settler. This was the circular:— Perth, 30th May, 1912. I have the honour to forward herewith a copy of the general conditions which I propose shall regulate the advances made to settlers in the Esperance wheat areas, in view of the fact (1) that water conservation is absolutely necessary; (2) that the average man can work 200 acres; (3) that fallowing is necessary and profitable in the district; (4) that seed wheat and fertiliser for the first crop have been promised. I propose, before authorising advances for other improvements, and when dealing with holdings upon which the maximum amount of £500 can be advanced, to reserve sufficient to cover 75/80 percent. of the cost for (1) excavation of a tank of approximately 600 yards capacity; (2) clearing 400 acres; (3) preparing and planting 200 acres; (4) seed and fertiliser for the first crop. I may explain in connection with the 75 to 80 percent. advance the object I had in view was to insist that the settlers should even in the permanent improvements made put some of their money or labour into them, and thus share the risk the Government were taking. Those were the lines laid down then, and while I have been connected with the development of the area, those have been followed pretty generally. I do not think there are many eases in which advances have been made for other improvements. I remember one or two applications for fencing which were submitted to me. I refused these on general lines until the settlers had something to protect, and with regard to the subdivision fences I never entertained a proposition until the settler outlined to me what his views were with regard to the eventual and permanent subdivision of the farm. In that way I had some control over the operations, and was able to compel them to adopt what I considered good methods. That is all I think I can say with regard to that development. I would like to say in connection with the tests, I prepared a schedule for the settlers showing how they could construct tanks which would give them maximum holding capacity with a minimum surface area, thus preventing evaporation. When approval for the conservation of water supply was granted the tanks had to be in accordance with the schedule.

899. How was the scheme succeeded?— It has not succeeded very well, because the settlers have not carried out their part of the obligation. In very rare instances, if any, have they repaid the cost of seed and fertiliser supplied them out of the first crop.

900. How much of the £50,000 did you expend?— I should say in the neighbourhood of £9,000 or £10,000. In my annual report it is shown.

901. Up to about £11,000, I think?— I will say from £9,000 to £11,000.

902. Would you say if you were directing this scheme over again that you would work on the same plan?— Very likely. However, I would exercise care in selecting the settlers.

903. Would you do so much rolling at the one time, 200 acres for one man who had no labour to employ. It is a big task?— It is a big task, but it is no use a man getting implements and a plant until he has sufficient area cleared to warrant the use of implements. I would certainly recommend that at least 200 acres should be cleared and the other 200 in the process of clearing. It may be necessary to see that he has the labour to get it done.

904. has it not occurred to you that probably we should make haste slowly in this district?— No; because of what I have stated in connection with wheat growing it does not pay to crop small areas, and it does not pay to have the plant capable of cropping a large area and utilising it on a small one.

905. But the position is, that it takes a certain number of years to get the land fit to grow a crop. We saw on our visit to the district many good crops growing this season?— Take the case of a man like Sweet. I understand he has managed to keep his 400 acres under crop, or 200 acres out of the 400.

906. There is a deal of money behind Sweet. He is not an ordinary individual?— Still he has done most of the work himself.

907. With the assistance of another paid man?— The principle of having a quantity of ground cleared is not wrong. It may be necessary to add to that to give him sufficient labour to keep it cleared.

908. The position is that it has cost more to clear the land than was reckoned?— More than the settlers reckoned. When the men first went there they thought all they had to do was to roll the roller over the scrub and burn it.

909. Tell us why your operations were not continued in advancing to the settlers?— They are. They have simply been transferred to another body. That is how I understand it.

910. Are they transferred now?— I believe they are. I do not know exactly the position. The last I heard was that the matter had been transferred to the Industries Board. There was some little hitch. The Industries Board could not take the matter up at once, and the Minister requested me to deal with the matter, and I did so. Since the Industries Board has been reorganised I do not know quite what the position is.

911. You are not directing it now?— No; I take it the Industries Board are controlling it.

912. You know we visited the district recently and saw good crops growing. Are we justified in attributing those of the better class to cultivation?— I would expect better cultivation would be practised now. The cultivation in the first year was extremely bad. I pointed out to the settlers that it was only because of the dire necessity of the settlers and the promise which had been given them that they should receive assistance at once for putting in the crops that I would approve of any advance to put in crops during the first year.

913. You mentioned in the letter to the Minister dated 4/8/16, that the discouraging reports were probably due to the unsuitable methods of cultivation, the