charged three-eights of a penny as our profit. The letter continues—

If this suggestion should meet with your committee's approval we are also prepared to submit estimates of cost of services. We would respectfully suggest that your Minister should have regard to the following construction , namely , (1) We consider that as we are a body of workers bound together for our own protection we are in a position to deal more successfully with labour than any other firm or combination and this is a question of paramount importance. (2) We submit also that we are virtually the growers of the wheat, or, if you prefer it, the direct representatives of the growers. (3) Their organisation consists of 61 co-operative companies formed , or in process of formation in the wheat belt and a number of direct agencies.

3107. By Hon. J.F. ALLEN: What do you mean by direct agencies ? — In places where no co-operative society has yet been formed we have a direct agent. The letter Continues — Between the co-operative companies and agencies this organisation serves the whole of the wheat belt ( please see list annexed) . (4) In view of the undertaking given by the Premier that no impediment will be put in the way of the farmers co-operative companies , we take it that your committee will make no arrangements with private merchants that would preclude the farmers through their own organisation, handling their own wheat. We submit that the scheme outlined above and the offer submitted in connection therewith would be the best possible arrangement your committee could make in the interests of the wheat belt. In case a definite quotation, in accordance with the terms and provisions of your letter of the 23rd August , is insisted upon. we append same as under-noted , viz: A (1) one halfpenny per bushel . (2) One penny and one-eighth of a penny per bushel. B. One-sixteenth of a penny per bushel. C.Seven-sixteenths of a penny per bushel. D. Three-eighths of a penny per bushel (our responsibility not to exceed one-eighth of a penny per bushel). We think that the quotation detailed above will be hard to beat. The only item in which competing firms might equal our figure being in the handling at sidings ( A.1) and (2). In this connection with would respectfully urge that a meagre paring of the allowance to sub-agents is not justified. If last year's sub-agency commissions be reduced it will probably lead in the case of sub-agents of all firms to less carefully stacking and sampling. Although the Scheme's plan might be to have all wheat railed to depots by the end of April, there are many contingencies to be kept in view; for example, there is a possibility of some confusion arising at such places, where we understand you purpose making direct loading arrangements in the event of the railways failing to supply trucks. Further, there is likely to be more confusion if you are unable to lift the whole of the wheat before the end of April, and if no arrangements have been made for protecting it. The possibility of strikes has also to be considered in this latter connection. We would, therefore, stress the advisability of having stacks in the country built in such a manner that they could be roofed if necessary. We are strongly of opinion that it would pay the Scheme to make no reduction in sub-agency commission should be 1½ d. per bushel for temporary stacking. We do not see how the services under heading A. 1 and 2 could be reduced, consistent with serving the farmers interest. We shall be glad to be favoured with your advice on the several points raised herein and meantime would mention that in submitting the above quotations ( which it must be evident are cut quotations) we do so — firstly, because we realise that the present are times for the exercise of every possible economy; secondly, because our very existence betokens the necessity of securing to the farmer the maximum return for his labour, with the minimum of handling costs and the minimum of middlemen's profits. Between the 19th September and the 5th October we found that the merchants had put in a quotation and some comment was caused owing to the fact that our quotation and that of the merchants was similar, and it was freely suggested that we had used some influence or obtained in a wrongful manner information that was on the department file. I give that a denial, and in order to show you how we arrived at our quotation, I will read you part of the correspondence on the subject showing how we arrived at our figures. On the 14th September we telegraphed to our brother co-operative in South Australia and we received this in reply — Received wire this morning . We are now negotiating with good prospects coming to suitable agreement. We consider three-eighths penny fair net profit. We are trying to get flat rate similar last year but at reduced rate. This is confidential. It is a telegram from the Farmers' Union of South Australia , which is also a trading concern, non-political but not as co-operative as we are. On the 28th August 1917, we got a letter from them also, and it detailed the argument that led us to put in our quotation. The fact that our quotation turned out to be equal to the merchants' offer to do the work was coincident to our obtaining any suggestion of what our quotation was. When this quotation came to the Minister it was found that the agents still insisted upon the zone system, practically excluding us from many portions of the State. To this we strenuously objected, and we were asked by the Wheat Scheme either verbally, or in writing, whether we would make a definite statement as to whether our quotation was for a monopoly of the business or in competition with the merchant firms. I stress that point because what I contend is the suggestion of handling the wheat on a monopoly such as is being done at the present time, did not emanate from us. The letter in which we offered to do the business did come from us, but this other sort of piebald arrangement did not come from us. Here is the letter in reply dated 5th October , 1917. Our quotation was dated 19th September, 1917, and on the 5th October we replied as follows:— We have all along contended that those farmers who require the right to handle their own wheat through their own company should not be forced to give it to any other firm. We therefore are prepared to face the opposition of other firms in any district provided, of course, that we have equal rights to oppose the other merchants in such districts as we may desire to do so. As regards prices submitted for various country services, these are quoted on the basis of the terms of letter of the 23rd August with, of course, the exception of Clause 2 (b), which has already been varied by the Minister. We would again direct your attention to the first portion of our offer headed " Handling wheat in cornsacks," in which we expressed our willingness to perform all the services necessary at cost, plus only a small definite over-riding profit. We still submit that this is the most economical and satisfactory method the Scheme could adopt in the interests of the growers of the wheat who, after all, are the owners of the produce and therefore the people whose interest should be most considered. Our previous quote was on the understanding that only one agent would operate at a siding, and we contend that this is the only economical method. We would like to add that any variation is likely to upset labour conditions and perhaps render it impossible for us to secure the labour necessary for the work at the figure we specify. If, therefore, there should be labour difficulties, the price for the country services will need revision. This matter, however, will be in your hands and you would be expected to do just what is fair and reasonable. That Clause (b) dealt with the elimination of the zone system. We definitely , in writing , offered to do the business in open competition with the merchants .