your inspectors. We have regard, therefore, to the following circumstances, namely:— 1. That Messrs. Dalgety & Company as sole agents for inferior wheat impose values on samples submitted ex country sidings, same as being such as to preclude local sales being effected. The latter will not come up to metropolitan values.

2. That we verbally suggested to your representatives the authorisation of all parties dealing with inferior wheat on your behalf, to allow no more of this class of wheat on the metropolitan market, now that wet weather has set it.

3. The urgency of immediate action as suggested, and your delay to take such action.

4. That your inspectors are still instructing agents in the country to send all sweepings to Perth.

5. The risk of malting and fermentation setting in en route.

6. Your continued attempts to saddle us with the responsibility of any such wheat which may arrive in bad condition.

"We propose, therefore, instructing all country representatives, both those dealing with old wheat and with new season's wheat that no more sweepings in which any earth is present, nor any further inferior wheat in which there is the least trace of fermentation setting, are to be railed by them to the metropolitan market. We also propose not to bag such wheat, but to get quotes for same per cart load, to be carted off sites, moneys to be accounted for by us to your sole agents for inferior wheat (Messrs. Dalgety & Company). We now definitely ask your authority herein.

"In view of the conflicting instructions above referred to, we also, with regret, propose to advise representatives that is on any occasion the Government inspector's wishes conflict with out definite instructions, they are to decline to act upon the inspector's instructions, and are to refer him to us.

"We again submit that this matter of dealing with inferior wheat should not be held up pending Mr. Keys' return, as same requires an immediate decision, although on the return of Mr. Keys, we are more than willing to meet him, with a view of discussing matters, should he so desire."

Note particularly that part which reads—"We now definitely ask your authority herein." At this time Mr. Keys was in the East, and the matter appeared to us so urgent that we advised an immediate decision, although we indicated our willingness to discuss the matter with Mr. Keys on his return. Our definitely asking authority was not a bit of good. The letter is still unanswered.

5059. By the CHAIRMAN: With regard to that inferior wheat, did any officer of the Scheme verbally inform you after that letter was sent in that you should send samples of inferior wheat to Dalgety & Co. to have the price fixed, wheat which your agents did not think was suitable for the metropolitan markets?—I cannot recall any such verbal information, but all the same we have been sending samples to Dalgety & Co. from time to time and they have been fixing the price. In former years there was never any difficulty, nor was there any occasion for complaint from the Scheme, or from the inferior wheat trade. The trouble this year is due to the triple control. First, our own responsibilities in the matter; second, the Scheme's interference; third, the monopoly to Dalgety & Company, who have been appointed sole agents for inferior wheat. Assuming that our agent sends down a sample of his inferior wheat to us and we submit same to the sole agents for inferior wheat, wheat, Messrs. Dalgety, and a certain value is placed on same. In the meantime there might be an inch of rain at the siding and the value of the sample would be totally altered. On the other hand, we have a contract from the Government and we are responsible for the outturn of the wheat which we receive and the only sane course to adopt in regard to inferior wheat is to follow that which was followed in previous years, allowing the acquiring firm to dispose of this class of wheat on the spot. Mr. Harrison's suggestion to put up to the highest bidder on the spot is fair and eminently practicable in every way. Mr. Keys admits in his evidence that the value realised on inferior wheat do no affect the wheat growers much. I take it that is because the quantity is infinitesimal in proportion to the whole crop. If that be so what justification is there for bleeding the poultry man and pig feeder, charging him inflated prices for what is really refuse mixed with earth when the market is bare, and on the other hand having to throw that class of material away, when there happens to be a bit of better class stuff on the market, or when the sweepings mixed with earth get a good soaking in/transit, and arrive in putrid condition. It may be worth some risk sending forward that class of material in summer, but in the winter the absorption of moisture when earth is present is so great that fermentation sets in very quickly. Mr. Keys seems to have an impression that Mr. Murray was not aware that we could send samples of this class of wheat to Dalgety. Since instructions were received from the Scheme that all inferior wheat was to be sold through Dalgety this has been our consistent practice. It is, however, a very difficult thing to get a true sample of pickups or sweepings. In a parcel of, say, 50 bags it is quite possible that you would have three or four grades. Mr. Keys tells the Commission that these three or four grades should not be mixed up in the one truck. It must be apparent that it would not pay to load three or four grades of 10 or 20 bags each into three or four different trucks.

5060. In regard to that matter, is it not possible to load the inferior wheat at one end of the truck instead of spreading it all over the truck?—Yes, it would very likely be done. When an agent picks it up in the first place he grades it on the spot and if he has any bad stuff he will keep it together.

5061. In the trucks we saw with Mr. Murray the bad wheat was mixed with the good?—You might get a truck like that but most agents would keep the inferior wheat apart. Mr. Keys contends that we have sent down some wheat which was valueless. That is my opinion also, but my opinion is not worth anything in the matter. Dalgety's are the sole judges, but I give them this much credit that the inflated state of the metropolitan market is such that earth with a little wheat among it has commanded a sale. I have here some samples of inferior wheat recently submitted to Dalgety. Imagine the position of the agent who send these samples. Probably after sending a sample there is a heavy shower of rain. The agent knows he will get into trouble if he sells the wheat locally without authority. He knows that if it remains on the site he will have his Health Board down on him, and, further, that if the Government inspector happens to come along, there will be a caustic report about his incompetence, and he is between the devil and the deep sea. I would like the Commission to realise the position in which we are placed. The Scheme simply have a "stranglehold" on us. The Scheme's attitude in connection with inferior wheat is a dog-in-a-manger policy. (Witness produced two samples of wheat, No. 1 being ex Carnamah, and No. 2 ex Dumbleyung.) These are true samples from truck. No. 1 fetched 4s. per bag, and No. 2, 5s. 6d. If we sell at the siding when immediate action is imperative they accuse us because we do so without authority, while if we send forward wheat that gets wet and arrives in a state of fermentation they accuse us of incompetency. In one case our inspector arrived at a siding where there was a quantity of inferior wheat. Heavy rain was threatening, and having his car with him he made some inquiries locally, and made the best possible sale he could. There was no time to send a sample to us to submit to Dalgety, and if we ask Dalgety's approval to any sale, they naturally will not give any authority without seeing a sample. Time is the essence of the contract in practically every case when dealing with inferior wheat exposed to the weather, and it is essential that a certain amount of discretionary power should be allowed us as was formerly the case. Yet in these two cases to which Mr. Keys referred the fact has been advertised that we took upon ourselves to sell without the Scheme's authority. What a one-sided version of the story it is. Mr. Keys states in his reply to question 4079 that the Scheme have been handling inferior wheat for three winters, and this is the first time any trouble has occurred, and suggests that this is through our inexperience. I wish to draw the Commission's attention to the fact that we also have been handling on account of the Government for three winters, and we have formerly had no trouble what-