tlers' Association. Only Mr. Padbury still has an interest in that association. Immediately we became directors of the Westralian Farmers, Ltd., we retired from the association. Mr. W. D. Johnson was Minister for Agriculture at the time, and I asked him one day to join the Westralian Farmers, Ltd. He is a farmer up at Bruce Rock. He then said to me, "You are practically an off-shoot of the F. and S." Thereupon Mr. Hammond, Mr. Harper, Mr. Mather, and I at once retired from the executive of the Farmers and Settlers' Association. Of course I am still a member of the Farmers and Settlers' Association personally, a member of the Doodlakine branch. Either Mr. Allen or Mr. Lynn in the Legislative Council said he could not find out the connecting link between the co-operative societies and the executive. Let me say a word on that point. We found that the most successful co-operative schemes, particularly amongst primary producers, were examples of evolution. A small company would spring up in a small place, another in another place, until there would be many scattered small co-operative societies in various parts of the country. By and by they found that their sphere of usefulness was particularly limited, first their sphere of usefulness was particularly limited, first for want of capital, and secondly because of the smallness of their outlook generally. And they seemed by common consent to come together and join in a federation of small companies. And in every case that was followed by the formation of a central body, a small executive. In this State we formed this central organisation and attempted to work it on lines followed by other competing merchants, that is, with an agent in each country town. We found we could not get very far. So, following the lines of the most successful of the co-operative institutions, we went on a scheme of organising the local co-operative society. We assisted in the formation of those local co-operative societies right through the country. They are all separately registered companies under the Companies Act. They have their own boards of directors in honorary capacities, and their secretaries or managers. The only possible control or connection which the central company has is this: in their memorandum and articles of association they say that they are formed under the auspices of the Westralian Farmers, Ltd., which is practically meaningless, and they agree to hold the agencies of the central organisation, and in no way to hold agencies in conflict with those. If they are doing storekeeping they are at liberty to purchase their stores from any source whatever, and sell to their members. They are at liberty to trade where they like, but they are not allowed to hold an agency in conflict with ours. Thus, as we have the agency of the State Implement Works, the local co-operative societies cannot accept the agency of, say, the Massey-Harris binder. 3070. By Hon. J. F. ALLEN: But they could buy a Massey-Harris Binder and sell it to a customer?—Yes, but they must not hold the agency. There are of course certain lines which State Implement Works do not make, and in such cases the local societies have written to us for permission to hold other agencies for those lines, and after conference with the State Implement Works we have agreed or disagreed. But they cannot go in opposition to the general movement. Then there is the link of sentiment, which is pretty strong. The only other link is this: we believe that the failure of many small co-operative societies has been due to the faulty management and method. So we have provided at our own cost a duly qualified auditor, whose duty it is to visit these local co-operative societies regularly, audit their books, and see that their business is being managed in a proper manner. 3071. They are compelled to have the auditing done by your auditor?—It is not in their articles, but they have agreed to it. I want to stress those two points in this movement, which is perfectly honest one. We say that if the individual farmers of a district find the need for co-operative working just so those co-operative units will find need for joining hands with other units. Thus, they form the central association, and I believe that within two years those local co-operative societies will own the Westralian Farmers. Ltd. 3072. Is it compulsory for the local co-operative societies to hold shares in the Westralian Farmers' Ltd.?—No, but they have agreed to take shares. Out of over 30,000 shares the local societies hold, as companies, 220 odd. I believe that during next year that will increase to perhaps 500. Just as the small co-operative society feels the need of a central body so lately we ourselves have felt that we are bound by certain restrictions which we cannot get over. The middlemen are seriously alarmed at the co-operative movement of the farmers, especially since they find the thing shows good organisation and management. We lately convened a conference in Melbourne. We wrote to every co-operative organisation in Australasia formed to work for the farmers. And when we went to the conference on the 14th May we found delegates representing every co-operative society in Australasia. In that movement we are forming a further federation. The producer cannot increase the price of his product because it has practically a world price, but he can reduce the cost of handling, and he can make better marketing arrangements. That is why we held our conference yesterday. 3073. By Mr. HARRISON: With that central organisation you would be able to make better arrangements for jute?—Certainly. The bigger the order we could send the lower would the price be to our individual shareholders. Our creed is that the means of living should pass more directly from the producer to the consumer. So in our constructive ideas we say the co-operative movement must extend to the consumer. 3074. By the CHAIRMAN: You are trying, by co-operation amongst the producers, to eliminate the middleman as far as possible, while the Labour party is endeavouring to do the same thing through the State?—At present Australia is not nationally sound, because the working class who are producers, together with the producers on the land, are the poorest in the community, while the wealth which they produce is going to a certain section who themselves produce nothing. 3075. By Mr. HARRISON: Does not that cause centralisation of population?—Certainly; that is causing the rush of population to the cities. I do not look seriously upon the present position of Sydney and Melbourne, because I think it is a false inflation due to a tremendous expenditure of loan money. We find that the business of primary production is actually the most prosperous industry in Australia; yet the men who prove that prove also that the people engaged in it are the poorest in the community. We say that is not right. If you trace carefully where the wealth goes from that production it will be found that it goes to the pockets of people, a great many of whom are not necessary. That certain section grows wealthy and lives on the backs of the worker and the producer. 3076. By Hon J. F. ALLEN: Does it not depend largely on the scale of his operations?—I do not say every middleman is unnecessary, but there are too many. When you wake up of a Sunday morning and see half a dozen milkmen in your street when one milkman could do the work if the thing was properly organised— 3077. You can say that about the farmers?—No, I deny that emphatically. It is not the same with the farmers; you cannot produce more by combining the number of farms. 3077A. Not working co-operatively?—You will need to eliminate many persons from the farm. I mentioned just now the question of milk; I do not know why I did so. 3078. By the CHAIRMAN: You are trying to prove the Westralian Farmers came into existence of the benefit of the farmers?—And in addition I say they will be of benefit to the consumer as well. Our idea is to cheapen the costs between producer and consumer. I could give you instance after instance. Take this case: I got a telephone message the other day to go to the officer of a certain firm and I went and the manager showed me a little white thing which looked like a white building brick. He said he had a letter from a merchant house in Sydney asking him to take over the agency of this article in Western Australia but that it had nothing to do with their business, and that he wanted the Westralian Farmers to act as distributers because it was of interest to the farmers. He said it is not a brick but a lick, a salt cattle lick. I found there was only one other lick on the market, Leslie's, and these people said they could place this new lick in our hands at 15 per cent. cheaper than Leslie's lick, and it was of equal quality. I asked what the terms were and was told "we can give you 33 1/3 per cent. for distribution." I said, "Do you get anything," and he replied, "You need not worry about that, we get our cut from the chief dis-