millions sterling. No one had had any experience in this connection before. Even the agents who had been handling the wheat in the past were new to this particular phase of the work, which was more or less of a public character, and which had to be dealt with entirely apart from its commercial aspect. In order to place the matter upon a business basis two agreements had to be drawn up: an agreement with the millers and an agreement with the shippers. These were drawn up after many consultations. The shippers' agreement, which was the first to be finalised, was a simpler agreement than that with the millers, because in the case of the shippers they had not purchased any wheat prior to the Scheme being put into operation on the 1st December. During the first year the shippers worked co-operatively with us. I believe most of them realised that this was a form of war work, and they gave us a great deal of co-operation. There was some trouble at the beginning in connection with the appointment of agents. The desire was not to disturb any more than was necessary the existing channels of trade and to pass this business through those channels which previously operated. A good many applications were received for the appointment of agents. Eventually all, with the exception of four or five of the principal agents, were rejected. Included amongst the agents was the Westralian Farmers, Ltd., who previously had not done wheat agency business in the State. As far as I can remember the reason for their inclusion was that even had this Pool not been in existence the Westralian Farmers intended to take up this line of work, and in addition they were a co-operative institution, and it was desired to assist the co-operative movement. The Pool was regarded largely as a co-operative marketing of wheat. The Farmers' Mercantile Union, which had been operating before, was not accepted as an agent, because while these negotiations were going on the union had adopted methods which were not considered very satisfactory. When called upon to do so by the Minister, the Mercantile Union refused to give a bond that they would carry out the promises which they had made, and because of that the company were not accepted as an agent, though it had been desired to appoint it as an agent if possible, because, to a certain extent, it was a co-operative company. The arrangement with the millers was complicated because, following the practice in the past and possible accentuated by the fact that the Pool was likely to come into existence, the millers had secured a supply of early wheat in order to carry on their business, making contracts and taking orders as has been their custom.

801. By Mr. HARRISON: They had made forward contracts for both buying and selling?—So I was given to understand, and afterwards we found out that that was the case. The forward contracts for selling included not only export flour but also local flour. In this connection a difficulty arose, because the Commonwealth had required that all the wheat should come into the Pool; therefore, we had to make some arrangement to get this in. Here is where legislation would have been of vast assistance if we had had it. As it was, it just became a question of mutual arrangement between the millers and the Scheme. Eventually an arrangement was made by which the wheat was dealt with through the Pool, the millers tendering at the rate at which they had originally purchased it. The reason was that the millers stated they had made contracts which would not permit of their dealing with the wheat in accordance with the price which the Pool might eventually realise.

802. By Hon. R. G. ARDAGH: About what date was this?—These negotiations were going on in November and December of 1915. We were trying to finalise matters before the 1st December, but I do not think we succeeded. The actual details of the matters to which I refer can be ascertained from the files. Eventually an arrangement was decided upon and Western Australia joined the Commonwealth Scheme. In this connection South Australia did not adopt quite the same attitude. Later we learnt that one of the South Australian millers had purchased 250,000 bags of wheat prior to the formation of the Pool, and that he was allowed to retain that wheat. That course would probably have been easier for this State to adopt, but at the time we felt that in order to keep our promise to the Commonwealth it was necessary that all the wheat handled from the 1st December, whether purchased by forward contract or not, should go through the Pool. We realised that unless we handled all the wheat, a great many anomalies and objectionable features might creep in. This stage having been reached, the business of the Pool was carried on with the aid of the Advisory Committee and of the Minister. The Minister was naturally the executive officer, taking a very great interest in the work; in fact, without that interest it would have been practically impossible to keep the Scheme in close relationship with the Commonwealth and conserve the interests of the farmers. From time to time, as we went on, it was found that various matters had to be adjusted. As I have stated, the Scheme was new and things cropped up which could not have been foreseen, and those things were dealt with. Usually they were dealt with in a very reasonable way, and matters proceeded fairly smoothly except as regards the contract wheat of the millers. We invariably had a good deal of trouble with the contract millers, because we could not get the returns which were promised to us, and there was great difficulty in enforcing our demands. All through, I wish to point out, as well as the farmers' interests the State's interests had to be considered, and the economic value of a mill to the community is by no means small. This, and technical difficulties, made it very difficult indeed to enforce what we required in connection with the contract millers. The millers felt that we were not conserving their interests. They were asking for what we regarded as concessions but which they regarded as rights. In this connection perhaps I may be pardoned for mentioning a personal matter, which will illustrate what I mean. As chairman of the Committee I came in contact with these millers, and naturally I was trying to conserve the rights of the farmers. On one occasion a miller in this State wrote to his principal in another State a letter, which I saw, to the effect that he could not expect to get justice from Sutton as he was too much of a farmers' advocate. Yet, on another occasion, when I was fighting in Melbourne to obtain more orders for flour milled in this State, and when I took one of our millers, Mr. Ockerby, with me to assist me in this fight with the committee advising the Australian Wheat Board, the committee greeted me with the hail. "Here comes the millers' friend." I think those two incidents show that I was trying to hold the balance fairly between the various interests I had to consider. We were limited in connection with export flour sales. The Australian Wheat Board fixed the price at which we could sell the wheat to the millers, and the price for the Imperial flour contracts was fixed by the Imperial Government—I think it was £11 7s. 6d. or £11 8s. per ton. Our millers were complaining bitterly that they were not being well treated, that the prices fixed were higher than those being charged millers in the Eastern States, and did not allow them a sufficient margin of profit. On comparing the rates which the farmers were receiving, I found that millers were paying and that our farmers were getting at least 1d. per bushel more than the Eastern States farmers, that is at the country sidings. I believe those are the main items that occurred during the first year of the work. You have asked me to express my opinion, and I wish to state my belief that, taking into consideration the magnitude and newness of the Scheme, it worked wonderfully well, and compares more than favourably with the corresponding Schemes in the Eastern States. I reported to that effect after one of my visits to the Eastern States when I went through all the States. My report to that effect has since been supported, I believe by unofficial statements of men coming from the other States, and also by Mr. Field, a member of our board who visited the Eastern States towards the end of 1916. I think, and on his return stated to Mr. Mitchell, at one of our meetings, that it was not to be forgotten that the Scheme in Western Australia had been economically and efficiently administered and compared most favourably with the administration in the other States. I was intimately associated with the Scheme until the charge of Government, when Mr. Frank Wilson came into power. From that time I was still associated with the Scheme, but not so intimately, until the end of that year. Between myself and Mr. Mitchell, who was administering the Scheme, there was never that confidence which there was in the first year, when I was administering under Mr. Johnson. Consequently I was never so intimate with it during that period as I was at first. I am now again associated with the Scheme, but though I am Chairman of the Wheat Marketing Advisory Board I have not obtained that intimate touch with the Scheme