Wheat (1) - Part 1

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is that the bulk of the Australian wheat harvest of 1915 lies deteriorating on the wharves of the Commonwealth. As indications of the general dissatisfaction existing in this State with the position of affairs, we would draw your attention to the letters of two business men, Messrs. A. H. Mallock and John Stewart, which appeared in the issues of the West Australian newspaper of September 4 and 9 respectively. We are all prepared to make sacrifices at the present time for the benefit of the common cause, but so far as we can see neither the wheat-growers of Australia nor the Commonwealth as a whole have benefited one iota from the limiting of chartering to two firms of chartering brokers. On the contrary, the policy hitherto pursued with regard to the freights appears to have placed the wheat industry and even the Commonwealth itself in a position of the greatest danger, and in our opinion, if tonnage is to be secured in adequate quantities, before it is too late, it is absolutely necessary that the chartering should revert to the firms who formerly did this business, who should be authorised to offer market rates of freight without delay. We many mention that no compensation has been paid or consideration of any kind shown to us by the Federal Government. The business, to the working up of which we devoted years of faithful service, has for time being been absolutely taken away from us and handed over to two firms who, so far as West Australian wheat shippers are concerned, had not, so far as we can learn, ever chartered a ship to load here. It appears that Barker, on the 7th July, sent to London the following cable:— "Telegraph indication freight steamers sailers December January also prospects good supply tonnage record harvest expected." And on the following day he received this reply— "Possibly limited supply steamers about 70 shillings sailers about 60 shillings." You never heard of that before?— No. Mr. Johnson may have brought it up but I do not remember it. Those are just the sort of statements that were being made at the time.

840. If it is true that the Commonwealth was not entering the market at a fair market rate, was that not leaving the Commonwealth open to the risk of a big loss?— It was, but even that cablegram indicates that shipping was scarce. If there had been competition among the States for the limited freight the States would have been outbidding one another for it. I do not remember the details disclosed at the conference, but I know I came away satisfied that the Commonwealth charterers had done the best in the interests of the Commonwealth and the States.

841. Then you do not think there is much in the contention that they failed to get shipping because they would not pay the price?— No.

842. You say you had some difficulty with the millers. Were you present at the interview between Mr. Johnson and the millers, when the question of the contract wheat was fixed up?— Not at the last meeting.

843. Were you present when they gave the quantity of wheat they required?— No, but on later occasions it was admitted by the firms in question that that statement had been made.

844. What was the reason why you did not enforce payment for the wheat that was gristed?—Various reasons cropped up from time to time. On several occasions we insisted upon legal action being taken. There were technical reasons in some instances, and in others there were disputes, comprising claims and counter claims, all of which made for delay.

845. Did you take into consideration the local demand for bran and pollard when you decided it was advisable to have the gristing done?—Yes, and we also took into consideration the fact that by sending away flour instead of wheat we were economising in shipping space. Moreover, we were anxious to get as many flour orders as possible. Our millers had started to trade with Java and Egypt, and we were anxious that the State should not lose that trade.

846. Then, if that were so, and the millers were merely gristing the wheat at the request of the Committee, perhaps you thought that you were justified in allowing the accounts to stand unpaid?—No. They should have paid what they agreed, and should have paid for the wheat as they got it.

847. Had the millers not been specially asked by the Committee to take the wheat from the Pool, do you think they would have done so owing to their overseas trade, to which you have referred?—Yes, they were anxious to grist all that they could.

848. Just now you told us that you got the millers to grist because you wanted bran and pollard?—No, they were already gristing, but that influenced us in not closing down the mills on the score that the millers did not pay promptly for the wheat which they used.

849. They were gristing to supply orders, and not to oblige the Committee had not been lenient with them?—No, but they were often gristing in anticipation of orders.

850. Do you think they would have closed down their mills if the Committee had not been lenient with them?—No, but to enforce our wishes we might have had to close down their mills.

851. I want to get from you whether the mills in their ordinary run of business would have demanded this wheat for the carrying out of their orders?—They would have had that wheat if they had had orders to fulfil, and they would have had it if they could have anticipated orders, but they would not have continued gristing if we had insisted upon being paid for the wheat as it was received, the flour from which would have to remain in the mill, carrying interest.

852. In other words, under normal conditions, the millers would have acquired this wheat and would have had to pay interest on their outlay?—Yes, but they would have had a free hand in regard to sales, and would only have acquired it at such a rate as would enable them to pay that interest.

853. Under the conditions you consider the committee were justified in allowing the accounts to stand and letting the farmer pay the interest?—No, nobody was paying interest. We allowed the millers to grist wheat in anticipation of orders, and in connection with the Imperial order we asked them to do so, but we rebated the interest because if they had not gristed, the wheat would be in the stacks, and when the ships came for the flour, we would not have had flour to put on board. It did not matter to the farmer whether he had his wheat in the stack as wheat, or in the mill as flour.

854. But in the ordinary course of business it is necessary for the millers to keep stock on hand; in this case those stocks were gristed from wheat which belonged to the farmer and for which the millers had not paid?—But their operations were so controlled that they could not carry on their ordinary business. They could not go into the open market and sell, because we controlled the price which they had to pay.

855. But the price of flour was raised a little to make up for it?—I think the gristing allowance as fixed by the Commonwealth Prices Commissioner was 30s. That, based on 4s. 9d. wheat, which, plus the 30s., brought flour to £11 8s. or £11 10s.

856. In your opinion the fact that the millers' accounts were not being paid did not involve any loss to the farmer?—Yes. It was a loss to the farmers when the millers were not paying.

857. So the farmers were paying interest on £60,000 for the benefit of the millers?—I cannot say what the amount was. In respect of any accounts which were rendered and which were not paid, the farmer, instead of the miller, was paying the interest.

858. Could not some scheme be devised under which the miller requiring wheat for his general trade would pay for it as he did before the war; why could not he do for the Pool exactly what he previously had to do for the farmers?—That was the arrangement made in the millers' agreement; they were to buy the wheat as they required it.

859. But, prior to the war they did not have to buy it on a fortnight's basis. Why should not they buy their own stocks?—I think it would all amount to the same in the end.

860. The agreement has not been carried out?—I have just recalled that one of the objects of the pooling was to stop speculation. If we allowed the miller to buy 300,000 bags of wheat at 4s., the price fixed at the beginning of the Scheme, the miller would have speculated to that extent and as a result of the operations of the Scheme the wheat might have gone up to 4s. 9d. and the miller would in consequence have gained 9d. per bushel.