Government purchase of the 3,000,000 tons of wheat, they have merely two and a half million pounds in London, and nearly 40,000,000 bushels free of all cost. If it was the other way, that the Commonwealth Government had a thirty million pound overdraft and were actually holding this wheat as security and we found that it was drifting into bad condition under the farmers' representation, there might be good reason for the government saying, "We are going to take charge of this." Here we have the farmer handing over his wheat, all he has got, and being expected to sit down and see all these mistakes made. I have only touched on these mistakes, and could go on for a week enumerating them; for we have ample foundation for what we are asking. We are expected to take on all this as if it were part of our everyday work. With regard to the guarantee of 4s. 4d. a bushel, in case the Commission should think we are getting something extraordinary, let me say that so far back as the 10th April the New South Wales Government guaranteed to their farmers a minimum of 4s. at country sidings for all wheat grown in the State during the next two years, the whole amount to be paid in a lump sum for the wheat at the station. The meeting which was held in Melbourne towards the end of April tried to get the New South Wales people to revert to 4s. at sidings, 3s payable in cash and 1s. payable hereafter. The New South Wales Government have refused to go back on their offer made and published on the 10th April. They are continuing to pay 4s. for the next two seasons at sidings for wheat delivered, the amount to be payable in cash. We have that from our New South Wales Farmers' Association.

2312. Is that not much better than a guarantee at 4s. 4d.?—The 4s. 4d. is f.o.b. You might take 4d. as being the average railage to port from any siding. It runs from 3½d. to 4¼d. That leaves 4s. without any agents' charges which have to come afterwards.

2313. It would be better for the farmer to be paid 4s. instead of 4s. 4d., that is instead of being given a guarantee 4s. 4d., and only being paid 3s.?—The guarantee of 4s. is worth 5s. to the farmer here. There is at least 4d. for handling charges and management in the Government department, and 4d. railage, and then there is the question of the interest on the shilling that we have to pay out. I myself am waiting for something like £1,700 to £2,000 to come back on the cost of my production from the Wheat Pool. I am paying to the bank interest on all that money. I do not know what the rate is, but I guarantee it is not less than seven per cent. When one is a beggar one can not be a chooser. It is far better for me to have 9d. than to wait perhaps two years for 1s. The next question I should like to deal with is in regard to the new Act which was passed, in order to show the Commission the justness of our claim and there is no knowledge of the conditions exhibited by the people who are running this business. The Act consists of six clauses, and the principal matter contained in it is the agreement with the Westralian Farmers' Ltd., as acquiring agents, and the millers for the gristing, storing and selling. It will be seen from Section 4 that the agreement with the millers is in the terms of the draft agreement set out in the second schedule. The draft agreement as a whole practically means that the mills are being run on the ideas and wishes of the Minister, and that all stocks are to be the property of the Pool. That being so, the question naturally arises, why does not the Pool take over the mills and run them as they do the wheat, with the difference, they should pay interest on capital to the owners. To me the reason is quite obvious, namely, that the mills under the proposed agreement are on too good a wicket. Fancy a price for gristing being given to all mills large or small with modern or obsolete plant, the same for gristing whether the mill has a siding or not. If we take the individual clauses of the agreement we will find under clause 11 all wheat bags in which the wheat is delivered become the property of the miller. Under clause 23, subclause (b), millers are allowed 7s. 6d. per ton for bags on the flour milled. Seeing that the miller uses the bags from the resultant flour obtained from the wheat these clauses mean that he is being remunerated for the bags in addition to the gristing charge. I wish the commission to bear in mind that in addition to the 7d. per bushel for gristing they get the bags given to them, ninety per cent. of which they afterwards use and charge up as 7s. 6d.

2313a. You say that a large proportion of the bags used for flour are the bags in which the wheat is brought to the mill?—Yes. Take Clause 15 of the same agreement. This clause provides for the Minister purchasing all stocks on hand at the 3rd November. 1917. No prices, costs, or otherwise, are provided for, and if a dispute arises the Federal Price Commissioner is to arbitrate. Surely such an absurd provision could only be entered into by a novice. If it is impossible to get the millers to agree to transfer their stocks to the Scheme at cost, then a percentage on cost should have been agreed to. The Federal Price Commissioner knows nothing about the cost of producing flour, or, if he does, it remains to be seen. The position was this: The Minister said, "All right, we are going to have you grist our wheat at 7d. per bushel." The millers said, "What about our stocks?" The Minister said, " We will take the stocks over." In milling flour no two mills would have the same price or cost of production. You have Mr. Scadden running a mill with plant that was scrapped from the York flour mill; you have the York flour mill with the most up-to-date plant in Western Australia. You have a five-sack running against a ten-sack plant and all the costs of production are different. So that what may be just a payable price to one miller will be a wonderfully payable price to another miller. What appears to me to prudent course would been for the Minister to say to the millers," We will take over your stocks at your cost of production, plus a percentage for profit"—it would not matter whether it is five or seven, or ten, or twenty per cent. But to leave it to the millers to put in any price for the stocks, and to leave it to the Federal Price Commissioner to arbitrate, you might as well call in an office boy.

2314. Your opinion is that the conditions under which the stocks were to be taken over should have been set out definitely in the agreement?—Undoubtedly. Moreover, the cost should have been ascertained by the Scheme. With regard to remuneration, you will notice clause 23 says that a gristing allowance of 7d. per bushel should be made on the gross weight of all deliveries. I submit the Commission can ask how the amount was arrived at. It could not have been arrived at from the knowledge of the Minister, or even his manager, because his manager, although he may be a wheat handling man, has never had anything to do with milling.

2315. Was not this agreement made by Mr. Sibbald, who was in a mill?—No; Mr. Sibbald left before the 3rd November, 1917. You must remember, too, that Mr. Sibbald was a miller; and one cannot transplant these people. His sympathies would be to the millers. Taking 50 bushels of wheat to produce a ton of flour and half a ton of offal, it means that the gristing charge runs up to 19s. 5½d. per ton. None of these mills had previously run on full time. They generally run eight or twelve hours, but never 24 hours as they are running at the present time. And wheat can be milled at £1 per ton. Running 24 hours means a tremendous saving in overhead charges, because you are producing twice as much as you were producing in the half day, and thus your overhead charges are spread over twice as much production. Therefore i suggest that even if it was difficult to arrive at what a fair price for all the different mills, an effort should have been made. I take it you could not have a differentiation as regards rates between the mills. It would have been fairer for the Scheme to take over the running of the mills and pay interest on capital. It might be said that that would be socialistic, and something the millers would kick against. But I submit that is not so, because Mr. Ockerby, on behalf of the millers as far back as 8th November, 1916, writing to the newspapers, said,"As to Mr. Stanistreet's proposition that the Government could and should control the whole operations of the milling and pay the millers a fair interest on their capital invested, I am sure I speak for all the millers when I state we would gladly concur."

2316. He was not at the time expecting continuous running, was he?—No. As farmers we are in this unfortunate position, that whether we like it or whether