1925. By Hon. J. F. ALLEN : Was it ever explained to the Committee that such an error might exist in connection with the quantities of wheat?—Mr Hammond pointed out the discrepancy, and that explanation was, I believe, given to him then.

1926. If he had that explanation, he would not be correct in saying that a muddle occurred?—That is so.

1927. By the CHAIRMAN : You also referred to the fact that as far as the accounts were concerned you have no objection to an outside audit?—Not an audit..

1928. Whether you had objection or not, and the Government desired it, it would have to be done?—That is so. I am giving my personal opinion. I have no objection to an outside audit.

1929. You pointed out also that the audit required was not to see that the accounts were in order but to seek for faults so that they might be made use of?—That is the opinion I have gathered from certain utterances which I have read in the Press.

1930. Your idea was that those complaining, as far as an audit was concerned, were merely doing so to endeavour to find something wrong, whether it existed or not?—Bluntly, my opinion is that they were seeking to use the Scheme for political purposes.

1931. What is to be gained from that?—I do not know. it is only the inference one obtains from reading certain statements.

1932. Would you not rather think they were trying to get this more for personal gain than for political purposes?—The two are frequently synonymous.

1933. No. I cannot see why politics should come in. If an outside firm could get a fee it would be an advantage?—Presumably they would earn the fee if they did their duty.

1934. It does not say because an outside auditor had had the auditing of the accounts that this auditor would mix up in any political organisation to give information politically?—I did not say he would. I have no objection to an outside audit.

1935. This is a matter of policy, nothing to do with the office?—I do not think anyone has an objection to an independent outside audit. At the same time I think the Auditor General is the person to carry out the audit; he is unbiased, and perfectly competent to examine the Wheat Scheme books.

1936. But do they not get so accustomed to a certain system of accounts that they find some difficulty in dealing generally with business accounts?—The senior auditor in charge of the detailed portion of the audit was in private practice; he must have been to have got his Fellowship. You can get an Associated degree but not a Fellowship without outside practice.

1937. Does not environment get you generally into one mode of working?—It depends on the man, I think.

1938. Generally?—Not necessarily.

1939. The public accounts principally deal with receipts of revenue and expenditure without dealing with a large amount of detail?—Not in connection with the trading concern; they are the same as outside organisations, or should be.

1940. therefore the person who follows up the work as an auditor in a private trading concern would be more used to that than men not accustomed to such a class of work?—The principles underlying accountant's practice are the same no matter what class of accounts you are dealing with. A man who knows his profession is capable of auditing any set of books if he understands the principles of his profession.

1941. Do you think it is possible that one department, such as the Audit Department, auditing the books of another department, seeing they are brother officers, would be more lenient?—I do not think so. I do not think the Auditor General is renowned for the leniency with which he deals with the various statements presented to him.

1942. You really are of the opinion that there could be no closer investigation of the account?—I am of that opinion.

1943. That is, so far as they are being carried out to-day?—Yes, and have been since the start of the audit.

1944. You referred to Mr Hammond's statement in regard to Mr Berkeley, and you went on to say that he had not sufficient knowledge of Mr Berkeley to know of his ability. If I mistake not the only complaint Mr Hammond made as far as Mr Berkeley was concerned was owing to the change of being removed from the position?—If I read the remarks rightly he said the accounts were in a muddle till such time as Mr Grogan took over, and lapsed again when Mr Grogan left. That is my impression; I may have misread the evidence.

1945. Have you read Mr Hammond's statement?—I have read most of it.

1946. Did you form the opinion that Me Hammond's complaint was more against the Minister making alterations in the management of the Scheme without consulting the advisory board, rather than against the officers?—I would not know much about that.

1947. You noticed, I suppose, that Mr Hammond spoke very highly of the officers?—In many instances, yes.

1948. And so far as you were concerned he said that he was afraid it would be a loss to the Scheme if you were removed from the position of inspector of mill accounts?—We have a thoroughly capable man examining that portion of the work at the present time. If Mr Hammond admits I was capable of handling that work, there is no reason why he should fear my advancement. 1949. You have been following that up for some time and you had been having difficulties so far as the millers were concerned?—I am still in charge of that work as accountant. Mr Watson operates under me and he reports to me direct. He is quite capable of doing the work he is engaged on.

1950. So far as it appeals to me after hearing Mr Hammond's evidence, he did not complain of the manner in which Mr Berkeley carried out his work. The complaint, so far as I can gather, was against the Minister who made the changes which, in Mr Hammond's opinion, were detrimental. You must admit that too many changes in connection with a scheme like this are not to its advantage?—But it is far more advisable to make those changes if they are likely to lead to an improvement. The scheme is growing constantly.

1951. Mr Berkeley was accountant in the Agricultural Department and he had sufficient work there to occupy his time and he could only give certain attention to this work as officer in charge?—That is so. 1952. A change was made to relieve Mr Berkeley of this position and put on an accountant who was to devote the whole of his time to the work?—Mr Grogan was acting accountant at the Department of Agriculture as well as in connection with the Scheme.

1953. Mr Hammond was in error when he stated that Mr Mitchell moved Mr Grogan from the Scheme to the Agricultural Bank?—The Agricultural Bank is a different department from the Agricultural Department.

1954. By Hon. R. G. ARDAGH : Mr Hammond in his evidence spoke of the accounts of the Scheme being in a chaotic condition after Mr Grogan went back to the Bank?—I can tell you that they were not in a chaotic condition, and since I have been associated with the head office they have never been in a chaotic condition. When I visited the Eastern States I inspected their methods of handling certificates and I can declare that our system is infinitely superior.

1955. By the CHAIRMAN : Was not Mr Berkeley sent to the Eastern States for the purpose of discussing accountancy matters and bringing the accounts more in line with those of the Eastern States?—The object of his visit was to deal generally with the principles involved in the separation of the Pools and the apportioning of the various expenses. I suppose he would go into other matters as well while over there.

1956. With regard to the suspense account of £12,500 which was paid to Ockerby & Co., seeing that Ockerby & Co. were so much indebted to the Scheme, do you think it was wise to credit that firm with that amount?—At that time they were not indebted tot he Scheme with the exception of the contract wheat. That credit had been taken off the balance and they would have been left in credit.

1957. On whose instructions was the amount paid?—If I remember rightly, the instructions were from the Minister, but there was at the same time some financial consideration given, I believe, both through