THURSDAY, 17th OCTOBER, 1918. (At Perth.) — — — — — — Present: Hon. W. C. Angwin, M.L.A., Chairman. Hon. J. F. Allen, M. L. C. / S. M. Brown, Esq., M.L.A. T. H. Harisson, Esq., M.L.A. — — — — — — KNIGHT HENRY WATSON, Inspector of Accounts, Wheat Marketing Scheme, sworn and examined :

7573. By the CHAIRMAN: What system is adopted in the checking of the mills as regards the output?—The mill returns are checked with the milling returns book, which is checked with the returns they render to the Scheme each week.

7574. Do the millers keep a tally regarding the output?—Yes, all mills, with one exception, have shift mill returns which record the quantity of flour, bran and pollard made. These are signed in most cases by the miller in charge of the shift, and the packer man.

7575. You check that with the quantity of wheat also?—Yes; it usually shows the number of bags of wheat shot but not in all cases the weight of that wheat.

7576. You estimate it on the number of bags?—Yes, or usually on the products that are milled.

7577. It might save time if you were to make a statement regarding what you know?—I do not think there is much further to add in connection with the mill returns. They seem to be fairly reliable, but of course we cannot tell exactly without an actual clean up of their stock. They might make mistakes, unless they have a good check on their millings. In some mills the check is not very complete. The Perth mill has a very excellent system of checking and we can always rely on their returns being fairly accurate. In each shift, say from midnight to 8 a.m., products made are kept separate, and the storeman counts same with the miller going off duty. That count of the products milled during the shift should agree with the quantity shown on the shift return. If there is any discrepancy the return is corrected to show the actual quantity of products milled. Their milling returns book and stock book are entered up from returns and the deliveries are shown on the opposite side. The balance between the two sides represents their stock on hand (book stock).

7578. Were you an inspector prior to the 3rd November of last year?—No, I started on the 10th December of last year.

7579. You found some difficulty at various mills in checking the actual stock on hand on the 3rd November of last year, when the gristing agreement was entered into?—Yes.

7580. Have you finalised most of the mills now?—Yes.

7581. Do you think you have it accurately, or is it as near as possible?—I should say it is correct. Stocks were worked back taking into account the millers' records of what was milled and delivered, and the stock, which was counted by one of the Scheme's inspectors at various dates to the date to which we worked back, namely 3rd November, 1917.

7582. I notice from the file dealing with the Cottesloe mill that in July of this year you were of the impression that you had it correct. You put in a long report?—I think the working back on their stocks was for the 22nd April. I did not complete it until some time afterwards, and there were then two or three items subject to adjustment in connection with the stocks at 3rd November.

7583. Owing to the fact that the stock was not properly stored?—Yes; and there was also one dispute in connection with 290 sacks of flour which Ockerby's forwarded from Cottesloe mill to their Kellerberrin mill. On the 8th January I counted the entire stock, including those 290 sacks. Ockerby's contended that the 290 sacks were not in the mill when I counted the stock, and claimed that the stock at that date should be increased by the 290 sacks which they said were in transit between the two mills. This was not so.

7584. After that you reported to the scheme that, owing to some errors discovered by the manager, Mr. Jackman, all your work was rendered useless?—I think that was before July. In going through their different records I found a number of discrepancies, and it rendered the first work back of the stocks useless.

7585. Again, in September you found another alteration which meant that the Cottesloe mill was credited with quantities of flour not there, and you had to make another inspection?—Yes.

7586. Does not that prove that by the Scheme taking over the Stocks on the 3rd November of last year, without having a proper count, there was a possibility of discrepancies occurring in all the mills?—There would be such a possibility, but I think that in most of the mills the margin would be very small.

7587. You think it advisable in entering into a new contract to start on a new foundation?—Most decidedly.

7588. The action which was taken last year should not recur?—No.

7589. It would relieve you of a great deal of difficulty?—Yes, and would be much more satisfactory.

7590. You have been milling as well?—Yes.

7591. Are you able to give the Commission any information as to the cost of gristing?—I have not had much chance of going into the matter. I understand that some of the other officers have given you estimates of the cost of production.

7592. We have not had any evidence as to the cost of production?—It could be worked out fairly closely, on the working costs of a mill working to its full capacity all the time. The cost of the production is increased in the event of any stoppage, breakdown, or accident to machinery. Some of the mills have had a pretty good run, but in other cases there have been stoppages and consequently their actual cost of production has gone up considerably.

7593. Can you give any information as to the cost of gristing in pre-war days?—I should say that without bags at a mill like Padbury's or the mills at Cottesloe, or Northam, the working costs would come out at about 15s. a ton.

7594. Would that include administration?—I do not know that it would cover the entire cost of administration. Cost of bags might run into 5s. a ton.

7595. You think that the cost of administration and interest, sinking fund and depreciation, would go on top of that?—I have allowed for interest and depreciation, etc., in the 15s. I am speaking of the big mills in quoting this figure.

7596. Would you agree with an estimate which was dealt with by the Scheme prior to your taking on the work of 20s. per ton to cover the cost of gristing?—I should think it would in the case of a mill like the Cottesloe mill, including bags.

7597. Do you find much difference in the quality of the flour which is going through the mills?—I have not much to do with it. Inspector Gillespie has all to do with that. I am practically only engaged on the accounts, returns, percentages, payments, etc.

7598. Are the millers putting in proper weekly returns?—Yes. At present they are up to date or to within a week or so.

7599. Some months elapsed before the millers began putting in these returns?—Five or six months.

7600. Was that owing to the delay caused by the Minister in not signing the agreement?—That may have had some bearing on it, but it is not, I think, sufficient excuse for their not rendering returns.

7601. Was the question raised regarding the agreement in your presence by the millers?—The millers have spoken about it not having been completed by the Minister, that the position was unsatisfactory, that they did not know how they stood, and that they were working practically in the blind, etc.

7602. Owing to the agreement not being properly executed, they felt they were not bound by the conditions until it was properly executed?—That seems to have been their attitude. There was also a lot of confusion with them in regard to the manner in which the returns were to be filled in.

7603. You are the officer who principally came into contact with the millers?—Yes.