to the point of disposal, also those expenses which will be incurred in the caretaking, together with any possible damage that may result through long storing, all go to make a most indefinite quantity to be put into statements which would purport to represent the state of this Pool. It is, in fact, in my opinion, not possible at the present time to present a set of statements for the 1916-17 Pool that will give any reliable idea as to the ultimate realisation. Statements could be prepared showing the actual amount of expenditure to date on the different services, together with the total realisation on that portion sold and also showing the total amount advanced to growers on certificates and against the big debt balance that would show could be inserted the quantity of wheat still in the country, but this would not give very much satisfaction to anyone seeking to know what they were likely to receive as the total payment per bushel on wheat delivered to this Pool. For 1917-18 wheat has yet been disposed of and any Balance Sheet presented for that Pool would, to all intents and purposes, be just a statement of the expenditure incurred acquiring and storing to date, plus the amount paid out on certificates as against the value for the total acquirements of the season. The following is a statement of the operations of the Australian Wheat Board as regards the accounts and the separation of the accounts of the different Pools: — Operations of the Australian Wheat Board (2 synopses) are, as far as concerns the Accounts Branch, (1) to bring to account the proceeds of all overseas sale and to arrange for the disposition of such proceeds amongst the States included in the Pool; (2) it negotiates and records various transactions made on behalf of the various States for the purchase of various materials that a State may require, which in connection with our State has been limited to roofing iron; (3) it records the financial relationship of the various States and issues all instructions with regard to the working up of various figures, on which interest and proceeds, etc., are apportioned to the various States; (4) it issues periodically summaries of the financial position of the different States and also figures showing the movements of the wheat; (5) it inquires into and advises upon the various financial and accounts questions which crop up from time to time. Funds. — The Australian Wheat Board holds practically no funds of its own but, acting as an intermediary between various States and the buyers, it distributes the proceeds of all sales to the various States as it deems desirable in the interest of the General Pool. Financial. — Right from the inception of the Pool payments exceeded income, for at the time the first advance of 3s. less freight was made on the first Pool, no income practically has accrued, consequently a very large overdraft was soon established. In Western Australia this overdraft reached £1,004,107 by the middle of April, 1916. Commencing in June, we began to receive our appointment of the advance by the Imperial Government to the Australian Wheat Board of £11,000,000, and this, together with the proceeds of local sales, immediately commenced to reduce the overdraft at the banks very considerably. Since that date this overdraft has fluctuated considerably, but has never exceeded the amount mentioned, and at the weekly settlement with the banks on the 8th inst. the overdraft for this State was £553,902 9s. 7d. We effect a weekly balance with the banks here, so that on Monday night we know exactly the balance of all accounts as at the close of the business on Monday, and those figures are wired to Melbourne on Monday night. To explain the financial position between the different States it will be necessary to state how the proceeds of the various sales and the expenses are allocated. Expenses — Each State bears the whole of its expenditure up to the time the wheat f.o.b. that is to say where wheat is supplied for local consumption the whole of the expenses up to the point of sale are borne by the State and where the wheat is sold on overseas contracts all expenses up to the point of placing on board are borne by the State. As from the placing on board of the wheat the whole of the expenditure becomes a general pool item and is finally subject to appointment between all States. Proceeds of sales — Sales are of three classes — 1. Sales for local consumption — These include all sales to millers for consumption in the Commonwealth and sales to millers for flour for consumption on transports and other overseas vessels for consumption on the outward voyage only. 2. Sales to millers for flour for private export — Up to the 1st July, 2017, all such sales were on account of the individual States, but as from and after that date all these sales are now pooled, any proceeds being subject to the apportionment as mentioned in the next item. 3. Overseas sales — These include sales of wheat overseas and overseas sales of flour under contracts made by the Australian Wheat Board. The whole of the gross proceeds of these sales are credited in the books of the Australian Wheat Board, so far as quantities are concerned, to the States making such shipments. The gross cash proceeds are shown as general income on account of the Pool. Finally on these gross cash proceeds will be debited all the various expenses as from the point of shipment (as mentioned just previously) and the net amount available will then be apportioned to each State according to the proportion which the quantity shipped bears to the total shipments by all States. If you have now grasped the relationship of the States to the Central Pool, I will now resume dealing with the financial aspect of the matter again. Arrangements with Banks — The first advance was financed by the various Banks under a combined guarantee of the Commonwealth and State Governments. During June the first instalment from the Australian Wheat Board began to arrive from the loan made by the Imperial Government of £11,000,000, last instalment being received 15th March, 1917. This loan was to be liquidated by funds which accrued in London on behalf of the board through shipments made by each State, such shipments going forward undrawn for. It will be seen that the advances from the Imperial Government reduced our local overdraft and this correspondingly reduced the interest on the local overdraft. On the other hand interest was payable to the Imperial Government on the balance of the amounts advanced. Up to June, 1916, the shipments which went forward had their documents discounted at the Commonwealth Bank here and the money received from such documents went also to the reduction of the local overdraft. Some of the early shipments went forward on pro forma prices both as regards selling and freight, for the vessels left here under orders to call at certain ports for destination orders and, consequently, it was not known where these vessels would ultimately out-turn their cargoes and final financial results were not known until such time as the final invoices came through from the London Committee of the Australian Wheat Board, which was arranging the sales of these shipments from its London office. The figures shown in the balance sheet as the various shipments is the figure at which shipments were invoiced out at and as will be seen from the footnote attached to the balance sheet all income, interest, and exchange are subject to adjustment. During the time that the £ 11,000,000 loan was being advanced however, sundry contracts were made with the British and French Governments and the going forward of ships at pro forma prices ceased. (Synopsis 5, 6, 7.) Contract 115 — Later a big contract of 3,000,000 tons was made with the Imperial Government (known as Contract 115). The moneys for this were advanced periodically and the last payment from the Imperial Government was received on the 25th March, 1918, notwithstanding the fact that many million bushels of this Contract are still undelivered. Interest (Synopsis 6, 7, 8) — From my previous statements it will be seen that moneys received from overseas shipments and the moneys received from Imperial loans save interest on our local overdraft, and it will be further realised that to secure absolute equality between the States, shipments should have gone forward in absolute order and in the right proportion between the States so as to have each State receiving its due proportion from shipments and loans properly credited against its local overdraft. This was, of course, practically impossible. Originally, to get over the difficulty it was arranged that the Australian Wheat Board should stand as creditor to the four states, debiting each with the principal of the loan moneys as paid to them and crediting each with the principal and interest on the invoice value of the documents lodged in connection with shipments and which went forward to London undrawn for and to cover the period elapsing from the date at which the documents were lodged at the bank (this date being