ests of the farmers to make the certificates negotiable. 4534. By Hon. J. F. ALLEN: The last Bill provided that they can be made negotiable with the consent of the Minister?—But that consent is seldom or never given. 4535. Under the existing legislation, if the farmer can show just cause for wishing to negotiate his certificates, he can get the necessary permission?—Speaking from memory we have given permission in only two instances. I cannot say offhand how many applicants have been refused. Heavy trading in certificates has taken place in the Eastern States, and I personally know a number of individuals who have made large sums of money by speculating in wheat certificates. Here is an instance of how the farmers lose. On the 5th June last in Adelaide in 1916-17 crop certificates were quoted at 7d., while those of 1917-18 were quoted at 11.7/16d. During the week ending 17th July the 1916-17 crop certificates were sold up to 8.9/16d. That is to say, the persons who bought the farmers' scrip on the 5th June at 7d. made a profit one month later of 1.9/16d. per bushel. The 1917-18 crop certificates on the 17th July were quoted up to 1s. 1⅜d., which would ensure a profit of nearly 2d. per bushel within a period of six weeks. During the same week on the Adelaide Stock Exchange wheat scrip representing 500,000 bushels changed hands. We gave permission to one man, a returned soldier, to sell his certificates, his reason being that the wanted to go to the East for medical attendance. On learning that he was selling at 6d. I warned him that it was considerably below value, and I said that if I were permitted to trade I would readily give him 9d. Mr. McGibbon also said that a broker met him in the street and asked if he had any certificates to sell. That touches one of the reasons why we do not readily give permission, namely, that the broker has better information than the farmer as to the real value. If, say, the Australian Government and the British Government are negotiating over wheat, the fact is known to many, and it is practically impossible to stop all leakage of information; and that information goes first to the brokers, who get it long before the farmers, and in consequence they buy certificates cheaply. 4536. By the CHAIRMAN: They paid pretty high in Victoria, did they not?—I do not know of an instance of a broker losing money. Some time back there was in Victoria a big rise in the 1915-16 certificates. That rise coincided with some figures prepared as to the amount to be paid on that crop. When the brokers got a certain quantity of scrip in their hands the buying and selling would probably be no indication of the real market value. 4537. By Mr. HARRISON: Could conditions arise under which they would be able to bear the market against the farmers?—Certainly, if a sufficient number of brokers were interested in the matter. I do not think it is likely that a concerted move would be made to deliberately bear the market in order to secure certificates cheaply from the farmers. 4538. Up to the present there has not been sufficient trade in the certificates to warrant any fears on that point?—No. I think the guaranteed price of 4s. 4d. less rail freight, which has been given to the farmers for the next year's crop, will stop a lot of trading in certificates ; because, when the farmer gets his first advance of 3s., he knows that he is sure to get another 1s. some time or other, and so he will not be ready to take 6d. or 8d. Possibly also, in view of the Government guarantee, the banks will advance money on certificates. 4539. You have not had any farmers wanting to negotiate their scrip in order to buy sheep?—I have not known of any. It is rather remarkable that the Farmers and Settlers' Association should be working so strongly for unrestricted trade in certificates. The method adopted is to employ brokers. If a farmer want to sell his script, he has to employ a broker, otherwise he cannot get into touch with buyers. That broker has to get a commission, and the man who buys the scrip has to get a profit. It appears to me that the Farmers and Settlers' Association are advocating the dealing in scrip, which will bring about a system involving the use of a middleman, while the whole of their actions seem to be in the direction of eliminating the middleman. I do not think the Farmers and Settlers have gone sufficiently far into the matter. 4540. Those people who trade in scrip would have an inner knowledge of market influences ahead of the farmer?—There is a likelihood of their having it. All the Scheme officials are bound to secrecy with regard to prices realised for wheat. That does not necessarily mean any leakages occur. It does not make any difference in this State, because we are not allowed to sell the scrip, but if news got out of the State it might affect the market in another State. 4541. By the CHAIRMAN: It is surprising how news does get out?—Yes. Such things happen in private institutions. Some clerk may divulge certain information without knowing how much it will affect the position. 4542. Any person who can show a genuine case of necessity to the Minister with regard to the sale of the certificate is given permission by him to dispose of them?—Yes, but we are very hard to satisfy. 4543. You draw the farmers' attention to the value of the scrip?—We cannot tell them the exact value, but can intimate to them that the price at which they are prepared to sell is below what constitutes a fair value. We do our best to safeguard the interests of the farmers. I would like to point out that because the Government handle the wheat and look after the interests of the farmers, these people do not have to pay any taxes, any stamp duty, any income tax or war time profit tax, and that they are saved a large amount in exchange, because the business is handled through the Commonwealth Government, and that in addition they are saved in other directions as they would not be saved but for the present system. 4544. How would that apply if an executive board was appointed under the Government?—It should not make any difference. In regard to the guarantee for next season's crop, with respect to which Mr. McGibbon appears to have got hold of the wrong end of the stick, I would point out that the guarantee is 4s. 4d., less railway freight. Mr. McGibbon said it was 4s. 4d. f.o.b. The State Government guarantee 3s., and any difference between that and the 4s. 4d. is equally divisible between the Commonwealth and State Governments. Any loss on the wheat is equally divisible, because the State Governments' guarantee of 3s. must be obtained. If the wheat realises 3d. less than is paid to the farmers, the State Government would pay 1½d. and the Commonwealth Government a like amount. With this guarantee of 4s. 4d. the wheat would have to be sold at round about 4s. 9d. or 4s. 10d. f.o.b., and if the Pool did not realise that price there would be a loss to the taxpayers of the Commonwealth and the State. 4545. You are definite with regard to the 3s.?—Yes. 4546. By Mr. BROWN: Would that 4s. 9d. f.o.b. cover the overseas selling expenses?—Yes. 4547. By the CHAIRMAN: I suppose you have closely perused the minutes of the Australian Wheat Board?—I have read them from time to time, I usually look through them to see if there is any likelihood of Western Australian interest being injured. 4548. You have seen the statement by the Prime Minister to the effect that England has sufficient wheat for herself for this year?—That is not correct. 4549. He prophesied it. Have you seen that Mr. Hoover, the United States food controller, stated that if peace was declared this year there would be 400 million bushels of wheat to export on which there would be a big loss to the United States?—I think Mr. Hoover means that they have a crop in America this year of about 900 million bushels. There is a guaranteed price to the farmer of two dollars and ten cents at Chicago and San Francisco. There will probably be out of that crop an exportable surplus of 400 million bushels. Mr. Hoover's statement must be taken to mean that if the war was to suddenly end they would have to sell that wheat on the open market, perhaps on the Continent, but would not realise the guaranteed price of two dollars and 10 cents.

4550. So that there would be a loss?—I take it there would be.