Wheat (1) - Part 2

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clauses1, 2, and 5 on pages 2 and 3 of our letter to you of the 2nd February, are to be referred to the Minister. It is understood, of course, that we are to have an opportunity of stating our case to the Minister before he gives his decision on the several points. When Mr. Keys would not submit another draft embodying the conditions set out in these letters the matter was referred to the Minister. Mr. Taylor had an interview with Mr. Keys and Mr. Baxter. When the matter was put to Mr. Baxter he at once said that the conditions which Mr. Keys was putting in were never suggested at any time, and he would not hear of putting them in then. He had neither legal nor moral right to put them in. In that attitude Mr. Baxter supported the contention which we put up, that this agreement proposed by Mr. Keys was a definite attempt to induce us to sign something which was diametrically opposed to the conditions there. Mr. Baxter, however, did not go far enough, and insisted upon two matters remaining. One matter was the retention of the single bag sampling and the fact that we were not to ship the wheat. We objected to sign the agreement without these two things being put in order, and I think it will be admitted that we had a perfect right to object. We then received the first serious blow in the campaign. When we definitely refused to sign the agreement with these two things eliminated, our payments were stopped. When we entered into the Scheme by arrangement in writing with the Scheme, we agreed to fortnightly payments. We were not advised that our payments would be stopped until we had sent cheques throughout the country to the depots, and went in to collect in order to put the money into the bank to meet these cheques. On the day that the payment was due we went along to collect and were told that the manager had instructed the staff that we were not to receive any payment until we had signed the agreement, which we say does not conform to the letters or anything else.

3172. What was the date of that?—About the 12th March. I took legal advice from Messrs. James & Darbyshire. Sir Walter James advised me that our legal course was to complete the contract and then sue the Government. That sounds all right. But to complete that contract and sue the Government it would have cost us between £26,000 and £30,000 in cash, and we had not the money. We could not go to our banker and raise an overdraft or a loan on a disputed agreement with the Government, because the bank would not lend us anything on it. We were faced with this stand or deliver manner, "Sign the agreement with the single bag sample and do away with your rights to ship the wheat or we stop your payments." They did stop our payments. We gave them notice that we would hold them responsible for any damage which occurred to us if our cheques were not met, and we did our best to reapproach them on the matter. I admit that we were licked.

3173. By the CHAIRMAN: It was a matter of compulsion? —Yes. 3174. By Mr. BROWN: Were any of your cheques interfered with?—Our bankers met our cheques. We have letters from the Minister and Mr. Keys which blame us definitely for the delay in signing this agreement. We agreed to this with the Scheme in October. We did not get the first draft until the end of January, three months later. That original draft was diametrically opposed in essentials to the conditions set out in the contract. We had to appeal to Mr. Baxter to set many of these things right and this he did. It still contained, however, up to the 19th March, two clauses which were distinctly objectionable to us. In view of these circumstances I think it will be seen that we were not responsible for hanging up the agreement. We repeatedly in writing said that if they would submit to us a draft agreement carrying out the conditions set forth in these letters we would at once sign it. Now we come to the time when Mr. Baxter wrote to us saying that he would have to introduce a Bill in Parliament that night, and when he would have to tell the country why the agreement was not signed. I deliberately delayed the matter a couple of days because I hoped we would sign it. The method of settling this agreement was as follows: We were definitely hung up for money. We had not two coins to jingle together, if we had gone on paying wages. We have over 300 sidings at work and the out-turn was a big one. The season was in full swing, and it would have been a serious blow to us if we had been unable to continue the contract. We suggested a conference with the Minister, and fortunately the Attorney General was present representing the Crown Law Department. The Attorney General said definitely that the letters upon which we were working did, in fact, form a basis of a contract, and that we were perfectly correct in not signing the agreement when the clause I have referred to was not eliminated. The clause regarding the running bulk sample was put right, but we were still not permitted to retain the right to ship the wheat. It is our intention to claim that we have that right both legally and morally.

3175. By the CHAIRMAN; If one is right, so is the other?—Certainly. It was put to us that there were certain things which cropped up which made the shipping of wheat difficult as compared with what had existed in the past. I think it was at that famous interview I was guilty of casting some reflection on Government methods of shipping wheat in the "Austral Brook." Mr. Taylor and I had to leave town, and our fellow director, Mr. C. W. Harper, completed the agreement. It was signed without any mention in it of the shipping. I contend that any fair minded person reading the correspondence which took place between us and understanding what was put up with by Mr. Keys could only come to the conclusion that Mr. Keys was deliberately attempting to foist upon us an agreement which had no legal or moral ground, and was in every way definitely and deliberately opposed to the interests of the country. Mr. Keys says that the conditions set forth on the 23rd August were not equitable or fair. Those conditions are embodied in a letter signed by Mr. Sibbald as being the conditions which we might assume were right. But Mr. Sibbald made the statement before the Minister, myself, and Mr. Taylor that those conditions had been suggested to him by the merchant firms. I put it to you that Mr. Keys when chairman of those merchant firms submitted the conditions which he then thought proper and that they were embodied in a letter to the Government which Mr. Sibbald says were the merchants' suggestions; yet as manager of the Wheat Scheme Mr. Keys finds them quite wrong and unfair.

3176. I see here in a memo, from Mr. Keys to Mr. Baxter, dated 6th March, it is stated that the conditions were subsequently altered when the arrangement with the Westralian Farmers, Ltd., were completed on a monopoly basis? —They were never altered.

3177. By Hon. J. F. ALLEN: Only in regard to prices?—No price was mentioned in the letter of the 23rd August. There has been no alteration except those in writing, such as the elimination of the zone system. I ask you what difference could it make to those conditions whether there were four zones or one zone? Could any of those conditions be altered or changed? Mr. Keys said that those conditions were laid down on the understanding that four agents were to operate in four zones; what reason then could there be for altering any of the conditions merely because one agent is operating in one zone? I think we now come to the beginning of my file and the most important phase of the failure to handle the wheat properly this year. In September of last year we pointed out definitely to the Scheme that it would be wise to build the stacks in such a way as to allow of their roofing if necessary. We could foresee that it was quite possible that wheat would not get into the depots by April, and therefore if the temporary stacks were without covering the wheat would be destroyed. That is exactly what has happened. On the 15th February we wrote to the Scheme and notified them that, foreseeing that there would be some difficulty and delay we had taken on ourselves to have the stacks in some centres so constructed as to allow for ultimate roofing. On the 18th February we received a reply from the Scheme stating that it was not the intention to leave the wheat in stacks, but in view of the strike it might be found necessary to roof some of the stacks. We wrote again on the 27th enclosing a list of well built stacks which were worth roofing, and intimating that other stacks were well built but we could not advise