On the 12th October, a week later, we received this—I shall be glad to be informed at the earliest possible moment whether your company is prepared to operate in the handling of the 1917-18 harvest for the partial services quoted below at the rate indicated without competition at all sidings in the acquiring and handling of wheat— Service- Accept wheat, weigh, asses dockage, and (a) place on railway trucks - Rate- ½d. (max.⅝ d. at small sidings). (b) Place temporarily in stack then into truck (by end of April or as mutually agreed)- 1d. (max.) Checking sample and weights at depots - ⅛d. Overhead expenses for issuing certificates - ¼d. Commission - ¼d. It is necessary that your answer should be received promptly and should be definite and clear. 3108. By Hon. J. F. ALLEN: There is a note added by Mr. Taylor to the letter. There must have been an interview between?—I do not think that footnote qualifies it. It reads— After further consultation with the Scheme—we add to make the position clear—we are prepared to operate in competition at the prices quoted in our letter of 19th September, for the services referred to in your letter of 23rd August. Our offer of course is based on the assumption that no agents will be allowed to operate against us in our district at a higher rate. We do not think it fair to the farmer whom we represent that if they close with our quotation in open competition with the merchants, they should be allowed to let those merchants compete with us, and pay them a higher figure than they were paying us. 3109. You want to be put on an equal footing?—Yes, except that I believe the complete handling scheme would have been the best. If they had not done that I could have wished they had done the other. I would rather face competition with the merchants. We would then have had a better deal. The services in the schedule are word for word the same as the services in the famous letter of the 23rd August, but whereas the letter of the 23rd August goes on to say It might save further correspondence if I communicated details of the particulars as might be assumed when arriving at your estimate, I contend that without any doubt whatever—and in this respect Mr. Pilkington, K.C., agrees with us—these quotations were asked for, and the only alteration in that from the letter of the 23rd August was that this was to be on a monopoly basis. The other conditions dealing with the stacking sites, shipping, judging of the equality of the wheat, etc., still stood. They had never been disputed. In our letter we distinctly say that our quotation is based on that assumption:— It is necessary that your answer should be received promptly and should be definite and clear. Our reply on the 15th October was as follows:— We are in receipt of your favour of the 12th inst., and contents of same have been carefully noted. In view of last season's experience in regard to labour, we are doubtful whether the work at the country sidings can be undertaken at the price named by you. As you are doubtless aware, owing to the shortness of labour at many of the sidings, farmers had to lump their own wheat, for which, by the way, they were fully paid. There is every indication that the labour conditions will be even more difficult this coming season than the last, and this aspect of the question requires close consideration. However, we are going into the matter to see what can be done, and hope to reply fully to your letter in the course of a few days. The only part of the quotation about which we had any great difficulty was in regard to the price which the Government were offering for the work at the local sidings. Our experience is that there is want of continuity in labour at these places. The pay given to the men actually lumping was in my opinion not great enough to warrant any reduction whatever. If the Government insist upon cutting the price in this schedule to our sub-agents, it means cutting down the price of labour at the siding. The labour problem was a difficult one. To offer a man so much an hour sounds all right, but if he has only got two or three hours a day work, it is all wrong. In this particular class of business these men were not continually employed, and they were frequently sitting about for an hour or two when they were not as a rule paid. The continuous week's work was not perhaps bringing them in a fair week's remuneration. We therefore protested against this. We were of opinion that the merchants would stick to this quote that they had put in, and were prepared to find the labour. It was more than we dared to do to let it go by. On the 17th we wrote as follows:— We are pleased to advise in further reply to your letter of the 12th inst., that we are prepared to operate in the handling of the 1917-18 harvest for the partial services indicated without competition at all sidings in the acquiring and handling of wheat at the rates indicated in your letter. We assume that if your offer is accepted we will ship the wheat so handled as provided in section 2 (1) of your letter of 23rd August. Clause 2 (1) of the letter of 23rd August provided distinctly that the merchant receiving the letter should ship the wheat. 3110. There is some objection to that at present?—Yes, and I hope the Commission will deal with it. We are being most unjustly treated in that particular condition, for, in our final quotation we distinctly say that we assume that this is so. When we put in our letter and when in past years the condition has always been that the merchants should ship, surely any fair minded person would say that if they had objected to this they would have said so, but here is our acceptance:— Adverting to your letter of the 17th inst. with respect to your company operating in the handling of the 1917-18 harvest for the partial services referred to in my letter of the 12th inst., I have to advise you that your offer to do the work for the aggregate of 2½d. per bushel with competition as set out in your letter of 5th idem, is provisionally accepted and subject of course to a mutually satisfactory agency agreement being entered upon. This acceptance is with the understanding that if you are able to co-operate at any siding or group of sidings without competition your company will, as far as the wheat so handled is concerned, perform the services required at the aggregate rate of 2⅛d. per bushel as agreed to in your letter of the 17th October. I have advised the mercantile shipper agents that similar business, that is with competition, is open to them at the same rates, 2½d. per bushel. As soon as I am advised of their acceptance or rejection of this I will inform you as to whether there will be competition with your company or not. In the meantime, however, of course you are at liberty to proceed with negotiations and arrangements for handling next year. The position there is clear. We put our quotation in in writing, in which we said we would do the work in competition with the merchants. We are then asked by the Government if we would do it at a less rate without any competition. With some reluctance we agreed to that. The difference in price there was the difference only in the price given to the sub-agents at the country sidings. We agreed to do it with competition at a price, and without competition at a price. Our offer was accepted, and could not be otherwise. What grounds could there be for not accepting it? The mercantile firms, however, are given an opportunity of coming in at the same price as the Westralian Farmers, Ltd., that is at sidings where you have their competition at so much and at sidings where you have not their competition at so much. That is what we agreed to do. They were written to, informing them that the business was open to them at 2½ d. per bushel, and the scheme told us that as soon as they were informed of the acceptance or rejection of this, they would say whether this was competition or not, to which we replied as follows:--- We have to acknowledge receipt of your letter of the 27th inst., received by us at 4.45 p.m. yesterday. We note that you are to communicate with us further as soon as you hear from the mercantile shipper agents, and we await your further advices before replying fully.