Wheat (1) - Part 1

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of the Association. I take it that the Commission is dealing not only with the principal Act but the amending Act.

2303. The Wheat marketing Act and the amendments thereto?—Yes. My remarks will embrace both the original Act and the amending Act. What our Association thinks it is necessary from the farmers' point of view is that the management f this wheat should be placed under an executive board, such board to be nominated partly by the Government, but the majority of its members to be nominated by the farmers through their own association. We put that forward on the ground that there has been proved incompetency in administration; that men have handled the business who have no knowledge of it, and that the alteration in the personnel of the Ministers from time to time does not permit of continuity of thought, action, or experience in connection with our affairs. We also ask that an independent audit should be allowed us, as is done in New South Wales. Although the Auditor General has quite recently audited the accounts of the Scheme, the audit was not conducted as a commercial audit. The Minister has an objection to an outside auditor, because he seems to think this would constitute a roving commission. When I place before the Commission the first interim report of Mr. Barton, of New South Wales, it will be able to appreciate how far a commercial auditor goes, and that it goes even further than the audit of the Auditor General, which was to the 31st December, 1917. The powers that were given under the Wheat Marketing Act were given about twelve months after the Scheme had been actually in operation. The agents who handled the wheat under the Scheme were the agents who had been handling it in the way of commercial business for some time previously. We submit that the schedule of the Act showed a lack of experience in the handling of wheat.

2304. By Hon. J. F. ALLEN: What schedule?—The schedule of the Act, namely, that dealing with the agreements between the Minister and the agents. The schedule shows this, for the reason that the agreement was determined on the 30th September, 1916. The agreement was not actually signed until January, 1917. Anyone who had ever handled wheat would know that unless the whole of the stacks were cleared up by the 30th September 1916, it would be impossible to place any responsibility on the shoulders of the agents for any neglect as to bad wheat and wrong weighing, and anyone looking forward at that time who had any knowledge of the business would have known that it was practically an impossibility to clean up the whole of the work by that time. This agreement with the agents was then subject to barter between the Minister and themselves for its continuation. The original agreement provided that the term should be extended at the Minister's discretion on lines to be mutually agreed upon. The fact that you ask an agent to extend an agreement, where he may know that he has a liability coming to him, means that it is not likely he will mutually agree to anything by which his financial position will be affected. The continuation agreement was not signed for eight months after the 30th September, indeed not until the end of May, 1917. I do not know who the Minister was in charge at the time, but this shows that he was not thoroughly alive to the seriousness of the position, and that the wheat was unprotected so far as the agreement was concerned. If he was alive to it, it shows the difficulty there was in making a continuation agreement. I shall have to deal with that continuation agreement later, because I wish to refer to certain clauses of it. When the Pool was instituted on the 1st December, 1916, it was necessary that the millers should be brought into it; and on the 29th November, 1916, there was a meeting between the millers and the Minister and the Advisory Board—at any rate, Mr. Sutton was there. The Minister then was Mr. Johnson. He pointed out to the millers that it was necessary, if they wanted to come in and handle wheat under the Scheme, that all the wheat they had bought forward at that time should be brought into the Scheme. He had the millers there—Mr Sibbald was their spokesman—and the Minister questioned them as to the amount of wheat they had bought forward. Mr Sibbald, acting as spokesman for the millers, told the Minister that the quantity was 150,000 bags. Mr Johnson then insisted that that quantity should be put into the Pool, and that the millers should accept an advance of 2s. 6d., I think, or it may have been 3s. per bushel, the same as the farmers, and that the millers should take their dividends from the Pool from time to time, the same as the farmers. The millers went away and considered the matter, and the result was that they submitted to Mr. Johnson a suggestion which is embodied in Clause 14 of the Second Schedule to the Act. This clause was a carefully and cleverly worded clause from the point of view of the millers. At the first glance, it made the millers coming into the Pool take the interim certificate and the interim advance; but the concluding paragraph of the clause says:—"The agent may acquire such wheat from the Minister for his own legitimate requirements at the current price as fixed by the State Marketing Committee, but such price shall be subject to adjustment on the ultimate realisation of the harvest to a price equal to such rate per bushel as is receivable by the farmer under this Scheme." The meaning of that paragraph is undoubtedly that, if on the final adjustment of the Pool the miler does not receive from the Pool the amount that he has paid to the Pool for the wheat the difference is to be made up to him out of the Scheme. Let me put a concrete case. The most of this wheat was bought by the millers at 4s. per bushel. They had to buy it back from the Pool for local requirements at 4s. 9d. per bushel. If the Pool does not pay the miller 4s. 9d. per bushel, but only, say, 4s., the difference of 9d. per bushel has got to be made up to him. But whatever that may be, the miller was not to be entitled to any of that profit until the ultimate realisation of the Pool; he was to take the dividends from time to time. The extraordinary part from the farmers' point of view is that the miller, although under his agreement he was to pay each week for his requirements for milling, did not do so. The millers were allowed to get into debt to the extent, as you have it in evidence given before a previous inquiry, of £70,000 on the 20th November, 1916. Evidence was given by Mr. Hall that those were the liabilities of the millers. Up to the present time the millers have not cleaned up those liabilities, and you have evidence that writs to the extent of £56,018 were issued on the 15th February, 1918, against four millers—the amount against one miller being £26,557. Now, that particular miller was present when Mr. Sibbald made to Mr. Johnson the statement that the forward wheat amounted to only 150,000 bags. When the contracts were declared by those millers, those contracts ran into 340,000 bags, and that one miller himself had more than 150,000 bags in the Pool. I submit to the Commission that any man with business experience, when receiving a statement of that kind from any class of men—not necessarily millers—would have thought it necessary to pin them down to their statement. In this instance the statement was that 150,000 bags represented the whole of their commitments in wheat. If the Commission like to hear me on the matter, I have some figures bearing on it, though I do not know that I can put my hand on them just now. Those figures show the amount the millers would have had to commit themselves to if those had been genuine contracts at the time, and the amount is £270,000. Be that as it may, the fact remains that the Scheme has had to have £40,027 taken out of it by way of profits to the millers on that little transaction of 340,000 bags. That is the amount they claim as being a set off against what they owe the Scheme. These figures can be verified from the financial statements which have been placed before the Advisory Committee from time to time. In dealing with the whole of the labour, and the whole of the liabilities, and the whole of the profits of a community—in this instance, the farming community—it is a very important matter that everything should e dealt with in a thoroughly businesslike manner, so that no loophole might be left for their exploitation by any section of the community. We look upon it as a most grievous error of judgment that the agreements were not