Wheat (1) - Part 2

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after, the agent would say, "No; you should have been here on the 30th September; I am not responsible for the condition of the stack to-day."

2370. By Hon. J. F. ALLEN: You think that an executive board would have prevented that?—Undoubtedly, unless they had a lot of nincompoops on it.

2371. You think that it would have been better controlled by such a board than by a Minister acting on the advice of an experienced manager such as he has at present?—When you say an experienced manager as at present, I do not subscribe to that. Mr. Keys has had to handle wheat under the most favourable conditions. In pre-war times wheat had to be sent away before June of each year. Mr. Keys had no more experience than I have had of how to keep wheat two or three or even five years. Neither has he had any experience of mills or running them.

2372. By Mr. HARRISON: Would not that natural increase of from 3 lbs. to 10 lbs. a bushel mean a great deal in regard to the administration?—Yes, inasmuch as the Scheme has been able to turn out more wheat for 1915-16 than it received.

2373. This was brought about by increased weight or wrong weighing or cleaning up with foreign matter?—Yes. We want to point out that in co-operative handling all those things would come back to the farmer.

2374. And it would be to the advantage of the Scheme and the wheat grower?—I do not know whether the Commission has taken into consideration the cost of the administration expenses of this office, but it appears to the Farmers and Settlers' Association that there is a lot of duplication of work as between the agents and the Scheme. We understand there are two sets of inspectors going round the country. All this is coming out of the farmers' pockets.

2375. By the CHAIRMAN: One inspector appointed by the agent and one by the Government. So far as the acquiring agents are concerned, they think it necessary that they should have inspectors to see that the agreement is carried out?—It would be advisable to get representatives from the Westralian Farmers, Ltd., before the Commission to inquire into the system which they have adopted. As a wheat grower I am quite satisfied with their handling, and that they are running the business on proper and economical lines.

2376. By Hon. J. F. ALLEN: Seeing that the Government have certain financial responsibilities in the Scheme, can you suggest any method by means of which one set of inspectors could be removed other than the elimination of the acquiring agents' inspectors?—The responsibility of the Government is that they have not to find any money. If I guarantee a man's bill I do not run his business, and the fact that you say that the inspection of the stacks has no connection with the guarantee of the Government is simply making work for Dreyfus & Co.'s inspectors, and you will find that the Government inspectors are Dreyfus & Co.'s old employees, and the farmers are paying for them. You might put it this way: there is first the Commonwealth and then the State guarantee, and then the agent. The Commonwealth guarantee is 1s. per bushel and the State over-riding guarantee is 3s. The agents would have their inspectors, and the State and the Commonwealth would have theirs as well.

2377. The Commonwealth's risk is very small?—They may say that it is a risk all the same, and they are going to have their inspectors.

2378. But how would you eliminate one set of inspectors?—I would say that the ideal method of handling that wheat is the method adopted by the Westralian Farmers, Ltd. It is satisfactory to the farmers, because that body is the farmers themselves, and the Minister or the Government nominee or the general manager could be in the building of the Westralian Farmers, Ltd., and he could supervise there.

2379. By the CHAIRMAN: Why do you suggest the Westralian Farmers, Ltd.; there is another farmers' union which has 1,100 farmers as shareholders?—For this reason; that the Farmers' Mercantile Union, the other body to which you refer, is not co-operative, it is a joint stock company just the same as Dalgety's. Its profits are distributed in accordance with the number of shares held. Mr Lehmann holds 5,000 shares. It is a misnomer to call it a farmers' company. It is as much a farmers' company as Dalgety's or any other joint stock concern. The Westralian Farmers, Ltd., is purely a co-operative body, and the only true co-operative company in Australia. It provides that a certain amount of capital has to be put up. Under the articles they are debarred from paying more than seven per cent., which is the same rate as they pay for any overdraft they may require. Any profits above that are distributed to every man who trades with the company. Those profits are not payable in cash; if they were there would be no chance of expansion. They are payable at death to the holders of the debentures, and during their lifetime the holders are paid five per cent. interest on their money. It is exactly the same as the A.M.P. Society's business with the exception that instead of having interest on bonuses added to the bonuses, it is paid in cash. If you decide to become a member you may put the profits into shares on which you would be entitled to seven per cent., but the money put in on bonus shares is not payable at death, and would have to be realised.

2380. That system has been introduced this year?—Twelve months ago, and the bonuses have been distributed this year.

2380A. By the CHAIRMAN: The agreement was drawn up in such a manner because of the information available that the 1915-16 wheat would be lifted earlier than it was. Did not the same thing apply so far as the 1916-17 harvest was concerned?—Such a suggestion must be wrong, because the information that the Board would have here would be similar to that which the Board had in the other States. Ours was the earliest terminating agreement, and if I were administering the department it would be only prudent for me to get into communication with the other States and find out what they were doing and endeavour to bring about uniformity in the dates of termination. The fact that our agreement terminated on the 30th September, the earliest date in Australia, condemns the management to a certain extent.

2381. They thought that the wheat would be lifted earlier. Was it not done with the object of relieving the farmer for paying for the increased responsibility?—No, because they paid less in New South Wales and Victoria than they did here for a longer agreement, and the same firms were employed.

2382. It was expected that all wheat in Western Australia would be lifted before August, 1917?—Such statements were made from time to time, but it was worked out by someone that it would be a physical impossibility to move it from Fremantle before that date even if ships had been available.

2383. I suppose you are aware that the Fremantle Harbour Trust said they were prepared to lift 20,000 tons of wheat if shipping were available?—I do not remember the figures. The object you have in asking this question is to ascertain my reason for condemning the Wheat Scheme for terminating the agreement on the 30th September. The information they had was similar to the information the others had in the Eastern States. Ours was the agreement which terminated first, and we had the same difficulty in getting the wheat away.

2384. By Hon. J. F. ALLEN: Mr Johnson was Minister then?—Yes.

2385. And at that time the board was practically an executive board?—It was an advisory board always, but it was treated more as an executive board.

2386. That board was created by Mr. Johnson without legislation. Mr. Hammond was a member of that body when the agreement was drawn up, and it would not be right to blame the policy which exists to-day for what happened then?—Yes, it would. I do not know, however, that Mr. Hammond concurred in the 30th September as the terminating date. Mr. Hammond was one of the board nominated by the Minister without reference to the farmers.

2387. You never heard of his objecting to it?—I do not know; I have heard a lot of objections.

2388. Was any objection raised at that time to the constitution of that body?—There has always been an objection to an advisory board.

2389. But as it existed at that time?—We recognised that Mr. Hammond, who was a member of the Farmers and Settlers' Association, represented that association on the board, notwithstanding that the Farmers and Settlers' Association never actually nominated him.