It was available within a few days after the Scheme requested us to have it completed. In answer to question 3994 Mr. Keys stated that the Government had no security from us until the new bond was put up. On the contrary, however, the Scheme held in hard cash earned, on the basis of the contract the following sums, namely:—At 31st January, 1918, £4,000; 28th February, 1918, £11,000; 31st March, 1918, £14,000. How can Mr. Keys allege that the Government had no security? With regard to Korrelocking, we stated that the scheme had sent an inspector with some labourers to this place without communicating with us. That was the first time anything of the sort was done. It seemed to us to be an unfriendly thing to do. We are in charge of these stacks, and there were no complaints about our work, yet they said that the stacks were out of repair. We have just received a report, and it will be interesting for the Commission to hear it read. Inspector Pearce, when looking around the stacks on Tuesday morning, said:—

Why, these stacks are not too bad. I thought they were in a devil of a state by the report the inspector sent to us. Mr. Pearce said he did not know I was here. He said their inspector said the stacks were in a very bad state, and the iron off the roof in places, and that there was no one here to look after them. Had their inspector looked around all the stacks in the yard he would have seen me, as I was going around the stacks with the Co-operative secretary when the Goods train came in that the inspector was on. The train did not stay in the yard more than ten minutes, and when the secretary and myself came out from under the screen at one stack we could see him at the other end of the yard, and by the time we got there he was on the train. So that all I saw of him was his back, and the iron that he reported being off was all on before night. Inspector Pearce said that I had done good work at Ardath and all along that line, and that he was quite satisfied with the work I had done here up to the time he came, and since he has been here I have done my best to help him with the work, and we are working longer hours so as to get the job over. There would have been nothing to justify the Scheme's interference if their inspector had come to me instead of coming in one end of the yard and out of other.

Issue of Certificates.—I further notice that (under 4497) Mr. Keys complains that he finds it very necessary to check certificates issued by us, on account of the number of errors we make. I find that 11,102 certificates have been issued by us up to 31st July, and that 284 alterations have been necessary. Of these, 146 are accounted for by ordinary alterations to addresses, alterations in the names of banks, and alterations in the spelling of names; also a few of the number are alterations which have had to be made in connection with dockages, while there have been 44 cancelled certificates, some of them being on account of farmers losing their certificates. The only alterations with which the Scheme can with any fairness attach any fault to us number probably 75 out of the 11,102 certificates. With the exercise of the greatest amount of care a few alterations are unavoidable, and in view of the large quantity of certificates handled I cannot see that Mr. Keys has anything to complain about. We made a point of having the certificates issued to the banks within one clear day after presentation of interims, and this was adhered to throughout the season, unless in the case of an interim being irregular and having to be referred to the sub-agent. The following is a list of alterations to certificates, viz: —Alterations in names, initials, banks, and sidings, 146; alteration of dockages, 17; cancelled certificates, 44; errors in extensions, 30; error in quantities, 20; errors in freights, 27. Total, 284. Mr. Keys said that it was on account of the number of errors made by the Westralian Farmers that it was found necessary to check the certificates. We contend that that statement is misleading. Out of the 11,000 certificates issued we show that there have been 284 alterations which are not necessary mistakes. The alterations be in names, initials, the name of a bank, due to the request of a client , or perhaps the bank itself, an alteration in the name of a siding, alteration of dockages due to the alteration by the Scheme, and for all these we got the blame. There was also the cancelling of certificates for a variety of reasons, errors in quantities, freights, and, by the way, these mistakes were found by our officer, not by the Scheme. We say, therefore, that the comment is not fair. In reference to the comparison of the handling rates in the different States, under query 3588, the figures quoted by Mr. Keys are misleading in the extreme. Even assuming that they were correct, however, it will be seen that the rates paid in Western Australia are very much cheaper than those being paid in the East. Western Australian costs are ¼d. cheaper than Victorian, ⅜d. cheaper than South Australian and ⅜d. cheaper than New South Wales. The Victorian crop of 35 million bushels, at ¼d. per bushel, cost the farmers there about £36,000, and the New South Wales crop of 34 million bushels, at ⅜d. per bushels, works out at £88,000; these figures showing the saving that would have been effected had the acquiring agents in these States been forced to operate at the same rates as we operated last year. Mr. Keys suggests that these differences are accounted for by the fact that in the East agents operated at higher rates because of competition. It is not so much competition as quantity that tells. Some of these firms in the East handled in one State, with competition, just about as much as we handled on monopoly here, so that competition does not justify the increased price. Further, handling costs in Western Australia are very much higher than they are in the East, firstly, because the siding are smaller here, and it is very much more costly to handle wheat at four sidings of 20,000 bags than at one siding receiving 80,000 bags; an 80,000 bags siding is common in the East. Our largest quantity at one last year was 46,000 bags, but the average is only 8,000 bags per siding. Secondly, labour rates in this State are higher than they are in the East. Thirdly, inspection costs per bushel are greater owing to the wheat areas being so scattered and sparsely populated, and the sidings small. Further, in any comparison of costs, it should be borne in mind that we make our full profit out of the 1⅝d. which Mr .Keys takes as a basis, but in the East three additional profits are also made—I, A profit on deliveries to mills; 2,a profit on the stacking at the depot; 3, a profit of ¼ d. on shipping. This is the point Mr. Murray touched upon when giving evidence and referring to the 2⅜d. paid in Victoria. No other State has the system of dual control which obtains in this State. In the East, a definite contract from farm to ship is made, the Government only supervising and not interfering with detail. Mr. Keys deliberately ignores these facts. I would like the Commission to note, in reference to the figures I have just given, the effect of the co-operative movement in the different States:—Western Australia.—Co-operative monopoly: cheapest handling rates in Australiasia. Victoria.—Strongest co-operative movement in Australia: 2⅜d. per bushel, plus 1½d. to 1⅞d. per bushel delivery to mills. South Australia.—Co-operative movement growing, ¼d. dearer than Victoria. New South Wales.—Movement just starting; most costly handling in Australasia: 3d. per bushel. plus 2¼d. to 2½d. for deliveries to mills. These figures speak for themselves. Comparing country siding remunerating for the past two years:—Mr. Keys admits (query 3895) a saving of ½d. on the country siding services this year. That amount to thirty-three and one-third per cent. of last year's sub-agency commission. Even assuming that competition be eliminated, the saving thereby effected in working costs does not amount to thirty- three and one third per cent. No fair-minded man would contend that it does. Further, during the past season, at many large siding, only about half the wheat formerly received was actually delivered. The season was a very disappointing one. Our agents' working costs, therefore, at those places were the same in 1917-18 season, in receiving the whole of the wheat, as they were in 1916-17 season, receiving the same quantity, but which was only fifty per cent. of the total deliveries of that season. Their income, however, in 1917-18 season was only two-thirds of their income in 1916-17 season. Take as an instance, say, Korrelocking: received in 1916-17, say.