the beginning of the year the Government had shipped the wheat themselves, and that the men who would be employed to give certificates were the men in our employ. I also said that since we had been shipping the wheat we had sampled it carefully, and seen that the cargoes were up to requirements, that is to say, that the bulk of the cargo was f.a.q., and that we had been particular in seeing that we did not ship any weevily wheat. It is practically impossible to guarantee that a few weevil will not get into the cargo. As far as we could ascertain we did not ship any weevily grain, and we used to sample the wheat very carefully. We recognized that the Imperial Government were entitled to a fair deal. Since the Scheme has been established we have shipped away wheat in bags in a much better condition than was the case previously. There have been many complaints on the part of shipping companies as to the condition of the bags, and the Scheme has taken some pains and spent more money to get bags in a better condition than was the case in the past. In the past the custom was that if a bag that was going up to the elevator was seen to have a hole in it, the hole was stopped with a piece of hessian. The custom now is to set such bags aside. If the hole is too big to repair, the wheat is re-bagged. Generally speaking, the Scheme has been trying to ship wheat in a better manner than was the case with the shippers before. This has involved some expenditure. It is readily understood that the more money the shippers spend in loading the wheat the less will their profits be. I would not say that they were generally neglectful, but they did cut things down to the bone. 4370. That applied to all the shipper agents?—Yes. 4371. By Mr. HARRISON: In addition to escaping the repairing of the bags, they would also escape the penny per bag for moving?—Yes. I know of one cargo which was shipped in a bad condition by one of the old agents. 4372. Do you get more for a cargo of wheat at the port of destination if it is shipped in bags?—We have not so far tried to ship in bulk from this State. There was a part cargo sent from Sydney some time ago, and I noticed tat the bagged portion of the cargo was sold at 6d. a quarter more than the bulk portion. 4373. What would that amount to?—Three farthings a bushel. 4374. Was it usual for the various shipper companies to get more for Australian wheat because it was in bags?—There have been only one or two instances of bulk wheat being shipped from Australia. I think more would be obtained for a bagged cargo than for a bulk cargo. It is quite the usual thing for millers at home to realise on the second hand bags. 4375. Would they get a higher price per bushel than they would for a bushel of wheat under normal conditions?—When sacks use to be worth 7s. here, a second hand sack in England in good condition would have been worth about 3s. 6d. per dozen. We used to re-import them to Australia and use them again. On arrival at home the wheat is taken out in bulk and graded, and the bags sold. I saw some account sales recently, and I think the second hand bags were sold at 9s. or 10s. a dozen at San Francisco. 4376. Do you mean they are brought back to Australia?—No, they are sold locally. I am referring to American shipments now. The bags brought practically the same price as the farmers had paid for them here when new. When I saw the first account sales I thought there was some mistake, but the second account sales I saw revealed an even higher price for the bags. These bags were sold at San Francisco this year, and there was evidently an abnormal demand for bags in America. 4377. By the CHAIRMAN: If that is so it will wipe out the contention that the silos will be a big saving so far as bags are concerned?—At present there would not be much of a saving as regards American shipments. 4378. WITNESS: This morning I was dealing with the question of shipping wheat. I mentioned the fact that shipments to America are paid for on grade. The grade is arrived at in this way: in America they have five grades for white wheat, and each grade is divided into sub-grades. There is No. 2 hard and No. 2 soft, and so on. The wheat which is qualified as No. 1 grade must not have more than a certain maximum percentage of moisture. Also there is a maximum percentage of inseparable foreign matter allowed in it; that is, foreign matter which cannot be sorted out of the wheat by an ordinary sieving process; for instance, barley, which is impossible to get the same size as the wheat grain. Then there are certain stones; gravel at times, if it is anything like the same size as the wheat, is very hard to separate from the wheat. Further, there is a certain percentage of damaged wheat allowed in each grade. The wheat is graded scientifically. But the main point is that the wheat is graded after it is docked. That means to say, if the Americans receive a shipment of wheat from Australia containing, we will ay, a large percentage of drake or oats, or any similar foreign grain, a certain sized sample is taken of the bulk, and that sample is sieved. Assume that the percentage in that sample is slightly over one per cent. Then they take off one per cent. of the entire weight of the cargo. They would not pay you for that one per cent. After the dockage has been ascertained, the wheat is graded. In America they say, "When we buy wheat, we do not want you to send us chaff or oats or drake or anything like that." We pay for bagging and shipping and rail freight and sea freight and other charges, and eventually we get nothing for that proportion of our wheat. The whole cargo is not treated on the one basis in America. It might happen that out of a cargo of 30,000 bags 20,000 bags would be passed and classed as No. 1 grade; the other 10,000 bags might be split up into No. 2, No. 3, and No. 4 grade, and perhaps a portion of the cargo might be so damaged that it becomes what they call sample grade, that is, no grade, but the wheat is sold on sample. If any cargoes are shipped to America from this State, we must be very careful to see that we ship only good wheat, because we will be paid exactly according to the value. If these States ever have bulk handling, farmers will fund that similar lines will be adopted here for handling their grain. 4379. By the CHAIRMAN: Does that account for the trouble which occurred regarding a lot of wheat sent by New South Wales to America?—Any inferior wheat going to America will be graded out, and would be paid for only according to value. The Imperial Government accept practically anything we send them. I understand there was some trouble in connection with early shipments of wheat to America, and a representative of the American Government was recently in Australia and examined the wheat in the Eastern States and in Western Australia. 4380. In the minutes of the Australian Wheat Board I saw a discussion as to whether New South Wales should not stand a rebate on account of the quality of its wheat. I suppose that was the cause?—That would be the reason for it. At the last meeting of the Australian Wheat Board it was notified that an American Government would not take any more of the South Wales 1916-17 crop. That was probably on account of representations made by the American Government's representative. 4381. We have seen in the Press repeated references to the high price which wheat has been bringing in America. Would that price be based on the average grade or on the first grade?—The price payable in America is two dollars ten cents Chicago or San Francisco for No. 1 hard white wheat. Of course, the price also applies to other wheats, but we are interested in the white wheats only. That two dollars ten cents id the price paid at the point of final delivery, say Chicago. The farmer does not get that two dollars ten cents. He has to pay all sorts of charges, such as elevator charges, railway charges, terminal elevator handling charges. However, the average price to the farmer, I am told, is between about one dollar ninety cents and two dollars. The two dollars equals 8s. 4d. So the farmer would be getting somewhere around 8s. per bushel for his wheat of the No. 1 grade. In the other grades the price runs about three cents per grade down. That is to say, No. 2 grade is about three cents under No1. grade, and No. 3 grade is about three cents under No. 2 grade. I am giving these figures from memory. Then, again, the difference between the hard and the soft of each grade is two cents. Take No. 1 grade,