tions because they recognised that they were in the right direction. 2144. Did you find that the wheat coming in during this last season at Fremantle compared favourably with other wheat until the wet weather set in?—Last season's wheat was of better quality. Last season's and this season's should not be compared. As regards the condition, the evidence of neglect and inefficiency spread over the whole period has been grater this year. 2145. Did you see much improvement between the wheats of the 1915-16 and 1916-17 harvests?—Yes. 2146. Was that particularly marked with regard to the Westralian Farmers, Ltd.?—The Westralian Farmers, Ltd. professed a desire to help but the profession was never put into practice. They had an impossible proposition to carry out because they had no organisation to wrestle with the task they had in hand. The results are bearing fruit to-day. 2147. Did you find in sampling at Fremantle that there was much foreign matter or smut in the wheat?—We handled a proportion of smut this year, but we have that all separated. The farmers, where they were instructed to send their smutty wheat into Fremantle, sent wheat which was badly smutted, pinched wheat, good wheat, and old season's weevily wheat all mixed up in one truck. That considerably increased our working cost. 2148. You do not think the wheat was faithfully consigned?—I should say it was ignorantly consigned and without any care. 2149. The sub-agent keeps the inferior wheat from the smutty wheat?—He should keep them separate. I think perhaps the cause of a good deal of the weakness this year has been the unduly sympathetic attitude of the farmer agent to the farmer grower. 2150. You have not handled any of the last season's wheat at all?—Yes, we have handled about 33,000 bags, and of new season's wheat 3,000 bags are in the re-conditioning shed. It would simply have been madness to put it into the good stacks. 2151. Have you had any f.a.q. of last season's wheat?—Yes. 2152. have you noticed much improvement in that?— It has been inconsistent. The bulk of the new season's wheat we have came from one centre, where it was decided not to stack the wheat, that is Dwarda, and we have had odd trucks from other centres. We have a good stack, a smutty stack, and a pinched stack. It might be possible to scatter these amongst other cargo. This is consistent and straightforward business. At times, shippers, if their own wheat is particularly prime, buy a lesser grade wheat to mix with their own, and thus reduce the general standard of the whole parcel to f.a.q. 2153. Do you think that the increase through climactic conditions is likely to make acquiring agents slack in their administration?—Some of them have a false notion of a natural increase. Of course wheat should not be allowed to get wet. 2154. Is the bark which you complained of included in the clean-up?—I take it it includes everything. The wheat at present on the wharf is an indication of what it contains. 2155. Has anything further been done in connection with the re-conditioning machinery which we saw on the wharf?—The cases are still on the wharf. (The witness retired.) — — — — WILLIAM DONNAN, Farmer, Tammin, sworn and examined: 2156. By The CHAIRMAN: You desire to make a statement to the Commission?—Yes. The Farmers' Mercantile Union has a capital of £41,500 of which £15,000 is paid up. We have 1,100 shareholders, practically all farmers. We are purely a farmers' company. In 1913 we handled two million bushels of wheat. We are prepared at all times to handle wheat under the Scheme. We have made repeated applications to be included in the Scheme, for we considered it our right. But through a misunderstanding with our managing director, the Minister, Mr. Johnson, turned us down. Mr. Johnson asked for suggestions as to the amount for which the Scheme could be run, and our Mr. Lehmann suggested that it could be done for 1¾ d., which is practically what was paid last year. Apparently Mr. Johnson took umbrage at this, and he excluded us from the Scheme. That was the first occasion of our being turned down, and it is the only reason we know for having been turned down. On several occasions deputations from the Farmers' Mercantile Union endeavoured to see Mr. Johnson, but he always refused. The chairman of the committee and myself waited on him, but he could not be seen. At last he sent out his clerk to say that any negotiations with the Mercantile Union must be done by correspondence. When Mr. Mitchell took over from Mr. Johnson we interviewed Mr. Mitchell, and he told us that we should be included in the Scheme, as we were representing so large a body of farmers. However, Mr. Mitchell went East, and the matter was left with Mr. Connolly. Mr. Mitchell sent back a wire to Mr. Sutton, directing that we were to be included in the Scheme. Shortly afterwards Mr. Mitchell wired to Mr. Connolly telling him to use his own discretion in the matter, so we were again turned down. That is all we know about it. When Mr. Baxter came into power we waited on him by deputation. He was very sympathetic; he said we ought to be in the Scheme. He asked us for a list of our chief operating places, and said that he would consider the matter. We sent him the required list, and after several weeks had elapsed he notified us that the matter of the Mercantile Union being allowed in the Wheat Scheme had been fully and finally considered, and that it had been decided that we were not to be allowed to act as agents for the Wheat Scheme. That is exactly what has happened during the past three years. As we represent 1,100 of the best farmers we consider we should have our share in the Wheat Scheme, that those farmers should be allowed to handle their own wheat. We have now decided to lay the matter before you. We think that we have just as strong a claim as have the Westralian Farmers, Ltd. It is not fair that one company should handle the whole of the wheat while we do not participate at all. 2157. You say you are not aware of the reason why you have been denied participation. Did not your company in 1915 promise the farmers a rebate of 1d. per bushel and send out a circular to that effect?—I think so. That was one of the things at which Mr. Johnson took umbrage. He said that if we did that we must pay it into the Pool. If we gave the farmers the rebate he said we would then monopolise the whole of the wheat buying. We dropped that matter altogether, and asked to be allowed to come into the same footing as the rest. That was really the suggestion of Mr. Johnson at the time. There must have been some understanding I suppose with the Managing Director. He must have been rather hasty in sending that out. At the same time Mr. Johnson said that if we did that we must put up another £20,000 as guarantee that we would do it. We were prepared to put up that other £20,000, but not prepared to pay that into the Pool. 2158. Were you not asked by this letter to have a clause inserted in your agreement with the Pool insuring the payment of the promised rebate?—That the penny would be paid into the Pool? 2159. It does not say so here?—That is what Mr. Johnson asked. 2160. According to the report of the meeting of the Advisory Board on the 15th December, 1915, the Minister said that he had called for evidence to support certain statements which had been made to the effect that the Farmers' Mercantile Union had promised a rebate of one penny per bushel on all wheat delivered by the farmers to them as Government agents, and it has been proved to the Minister's satisfaction that the agents of the said union had distributed a circular promising such a rebate. He had, therefore, communicated with the director, Mr. Lehmann, and had decided that as this rebate had been promised to the farmers a clause should be inserted in the agreement ensuring the payment of the promised rebate by the said union. He was now making a reply to a letter (which was read) asking if they agreed to such a clause being inserted in their agreement, and covered by a bond. The matter was then allowed to stand over?—The penny was to be paid into the Pool. It was not to be rebated to the farmers from whom we bought wheat. That was, according to Mr. Johnson, to be paid into the Pool for