798. That was too long ago for us?—Never mind; I am an architect by training, and I followed up the construction of that silo. Some years ago I offered to erect a silo for Harvey at York for nothing, but he refused my offer.

799. If you do not know anything about the Wheat Scheme, we have nothing to ask you?—I know that there has been a terrible lot of dissatisfaction among the farmers with the Wheat Scheme.

(The witness retired.)

The Commission adjourned.

THURSDAY, 4th JULY, 1918.

(At Perth.)

Present:

Hon. W. C. Angwin, M.L.A. (Chairman), Hon. J. F. Allen, M.L.C. | Hon. R. G. Ardagh, M.L.C. S. M. Brown, Esq., M.L.A. | T. H. Harrison, Esq., M.L.A.

GEORGE LOWE SUTTON, Commissioner for the Wheat Belt, sworn and examined:

800. By the CHAIRMAN: The Commission is appointed with a view to making inquiries into the management of the Wheat Scheme in the past, and to make recommendations for its management in the future. We should be pleased if you would make a statement on this matter. You admit there has been a good deal of criticism?—That was expected at the beginning. It was obvious that there would be a good deal of misunderstanding. Certain matters were known to those who attended the first conference leading up the the establishment of the Scheme, but these matters could not be made public. Because certain matters could not be made known to the farmers and others who were interested, a good deal of misunderstanding arose which resulted in criticism. In the beginning the circumstances which led up to the establishment of the Pool were not generally known to the farmers, and it was difficult to make them understand that such circumstances existed. It was known at the time to those in Melbourne that freight was practically unobtainable. Therefore, although wheat might be sold for 7s. per bushel in London, as I believe was the case, it had no value until it was shipped to London. Rumours were floating about that freight could be obtained, but those who were intimately connected with the Scheme could not see any foundation for them. The wheat scheme was established because at the first conference of Ministers it became evident that unless something of this nature was done there would be no sale for the wheat, and financial chaos would result. A conference of the leading wheat merchants in the Eastern States was called in Melbourne. These people definitely stated that they would not be able to buy wheat beyond a certain limit, that once they knew they had bought wheat up to the capacity of the ships in sight they would then cease to buy. This meant that some of the farmers who were in first would, perhaps, get a reasonable price for their wheat, but that those who came afterwards would not get the same price. That was obviously unjust and very bad from the point of view of the States or the Commonwealth. Consideration of this aspect of the question led to the conclusion that the only solution was to pool the wheat, and dispose of it in bulk. This really amounted to co-operative selling, and led to the formation of the Pool. The details were then drawn up. At this particular stage very serious difficulty arose, because of the reluctance of the financial institutions to advance the necessary money, which involved an expenditure of something between 20 millions and 30 millions. Eventually these difficulties were overcome, and the principles underlying the Scheme were established. So far as I know these principles have not been altered, and indeed I have grave doubts as to whether they could be altered with advantage, even with the knowledge we now possess. The outcome of that conference was that the Australian Wheat Board and a committee consisting of the Prime Minister and the Minister of Agriculture from each of the wheat-growing States was formed and a central executive committee to work with the Prime Minister to deal with the Scheme matters. It was arranged that the financial institutions should advance 3s. for every bushel of wheat lodged with the Pool as security, and the Commonwealth and the States standing as guarantors at the back of the Wheat Scheme. The Ministers of each of the States had to arrange details for their particular States in order to carry out this arrangement, and this led to the formation of the State wheat marketing committees. In this State the farmers were in a rather less established condition than those in the Eastern States, and consequently it was advisable that they should be treated under this arrangement as liberally as possible. Further, because of our geographical position, we were less favourably situated with regard to handling charges. The wheat marketing committee consisted in this State of Mr. Dean Hammond, representing particularly the farmers' interests, Mr. Field, who acted specially as financial adviser, Mr. Goss, of Geo. Wills & Co., who was specially interested in shipping, and myself, representing the departmental interests as well as those of the farmers. On the establishment of that committee difficulty was experienced owing to the fact that wheat was already being delivered outside the Scheme, and it was necessary, in order to receive the Commonwealth support in this matter, that the whole of the wheat should be controlled by the Scheme, for otherwise there would be chaos. There was no legislation to deal with this matter, so that the difficulties were a good deal greater than they would have been had there been legislation. The only thing to do was to secure the co-operation of those who had been handling the wheat in the past, as to get them as far as possible to work in a public-spirited manner and to realise that the Pool was in the interests of the public. The business was new and of considerable magnitude, involving in this State the handling of about 15 million bushels of wheat valued, I suppose, at about three