lot of pinched wheat at Geraldton, and it was decided to bring that down to the Northam mill to be gristed. When Mr. Mitchell was Minister we had a flourish of trumpets, and Mr. Mitchell told us that that wheat had realised 5s. 1d. per bushel, and that they had really made 4d. per bushel profit over and above the Imperial order. The facts are these: the wheat was undoubtedly gristed by the Northam mill and the product was sold to the Far East, where the wheat equivalent in flour is worth 6s. per bushel. This Pool has not the one all-round price of 4s. 9d. local, and, 4s. 9d. Imperial. They get the best price they can. At that time products going to the Far East were worth 6s. That product, therefore, realised 11d. per bushel less than what it should have done. Yet we were told that we were getting 4d. per bushel more than could have been expected. I think the Commission would be well advised to inquire into that particular transaction. You might say why do the farmers ask for co-operative handling and all I can reply is, undoubtedly, right throughout the States shortly after the first Pool was inaugurated—and I saw what was going on—and when I had looked into the idea of the Pool, I drew up what I call a tentative scheme for co-operative handling of wheat pools. I sent it to the States in the East and to my surprise it was adopted in toto, and it had the unanimous approval of the Federal Farmers' Association, which is an association of all the State associations. It has been put to that association and carried. It has been carried in Victoria by 400 delegates, representing 8,000 wheat farmers. That scheme I put forward, although not being what I call on co-operative affairs, is the establishment of a pool controlled by representatives of the farmers with a nominee of the Government. If the Commission would like I will give you a copy of the memorial I gave to the Prime Minister the first time we went to Melbourne, which has the co-operative scheme attached to it and the first report by Mr. Barton in connection with his audit of New South Wales accounts. I touched yesterday on the question of auditing, and in this connection I would like to point that in Mr. Barton's report, which is attached, there is a sample of what we are asking the Government to allow. I have also a cutting of a subsequent report on Mr. Barton's scheme here, which might be interesting to the Commission, because it deals particularly with millers' statements and shows the Government have auditors. These are Mr. Perry and Mr. Johnson, so that they have two auditors there, and it shows the difficulty which Mr. Barton is up against. When you are auditing you audit not only the financial transactions but as a commercial auditor you see whether the agreements with the millers and the agents and the conditions have been complied with, whether the sales are in conformity with the agreements set out in Melbourne. But it is apparent to me that this audit by the Auditor General of the balance sheet and accounts attached have never had that commercial audit that has been given in New South Wales by Mr. Barton. There are no explanations of liabilities and assets and no explanation of statements of accounts. There are a lot of items which it is impossible for the wheat grower or anybody else to know what they mean. There are matters covered up in the accounts which are under wrong headings. I refer particularly—I think it is under "damage by flood, mice, etc., provision for same. It is mixed up a bit. The heading does not represent what the actual payments are for.

2328. We found in another list £30,000. There it says £21,000?—It may seem to come with bad grace from me, because I am a public auditor, but I have no wish to audit the accounts. But the accounts should be subject to an outside audit, and subject to a report whether the business is conducted in accordance with the agreement entered into, and with ordinary business acumen. Mr. Colebatch says he sees no objection to it, and it seems that the different Ministers have no objection to it, so long as it is not a roving commission. A man does not go along and ask why certain things were done. He takes the evidence that it has been done, but he has to take the responsibility of the audit.

2329. Does not an auditor, to enable him to get certain information, have a kind of roving commission?—I am quite satisfied it would be a roving commission in that way. An auditor starts out to satisfy himself about a certain thing. He goes to the man in charge and asks for an explanation. If it is not satisfactory he goes to the Minister, and if he cannot get the information, the auditor puts in the report that he is not satisfied with so and so.

2330. Supposing you were auditing a business for me, and a large loss is shown. I should say to you as auditor, I am not satisfied with this. I should like you to point out how the loss has occurred. Would you not feel it your duty to do that?---That is the commercial auditor's duty. This is an up-to-date audit, not only to show a man that so much cash has been received and expended, but to point out where mistakes are made , to show where a department is not run properly, to show a man that he is not developing his business in a certain way. If that is done the auditor is of advantage to his employer; he is an adviser.

2331. You may remember that we had some difficulty with the Implement Works in regard to the balance sheet. I wanted to know from the Audit Department, through the Treasury, where the deficiencies were, and I was unable to get the information. If balance sheets are audited in the same manner in regard to wheat, it is not a proper audit?—In the particular instance you have spoken of, if I was asked to audit I should want to know where the loss had been made, and I should have to take out an analysis of the different classes of work, and if that was impossible I should come along and say, It is impossible to find out where the mistake has occurred. But the Auditor General is not expected to go into these details. The Auditor General does not actually audit himself; he relies on his staff. They are not commercial auditors, but cash auditors.

2332. I did not care what was done, whether they went outside or not?—There has been a suggestion made that the whole of the Wheat Scheme should be run from a departmental point of view. I want to say I have been through the Government service from A to Z—the accountancy part—and I say it would be a disastrous thing if we allowed at the expense of the wheat farmers the building up of a department to control the wheat business. The department at the present time has grown beyond all necessity, and I am putting forward a plea on behalf of the farmer. He grows his stuff and he has a right to handle it with the minimum of Government supervision. I think I have given the Commission evidence to show that there is a want of that business acumen that there should be.

2333. You stated you thought that the whole of the wheat should be handled co-operatively?—Yes.

2334. Do you think it is possible that the farmers co-operatively could handle this wheat business without any guarantee from the Government as regards payment?—In pre-war times, yes.

2335. Under normal conditions?—Yes. The wheat handling of Australia has been in the hands of three or four firms, who have made enormous profits in the past, and we want to realise that those same firms are handling our wheat under the Wheat Scheme.

2336. In London?—In Melbourne. I have been to three conferences in Melbourne, and I realise how little ice Western Australia cuts, how little the Minister cuts, and how little the Farmers and Settlers' Association cut. The Wheat Scheme of Australia is controlled by Darling particularly, Dreyfus, and Dalgety. They have meetings every day. In name they are an advisory board but in fact they are an executive board there. The Australian Wheat Board meets once or twice in six months.

2337. Shall I put it in the way Mr. Allen put it the other day? They as managers are advising the board?—Yes. When in March last the Australian Wheat Board called a meeting there had not been a meeting for three months. Mr. Giles turned up and the Prime Minister put his nose in it for two minutes, and there was no meeting. That was the meeting which was to consider what was to be done with the two millions in London. The April meeting was the meeting that should have been held in March. To get in with the question, you asked whether it was possible for the farmers to handle their wheat co-operatively without the assistance of the Government, all I can say is this: In October, 1911, there was a shipment of wheat made from this State by a boat called the Majorlea. There was