the cost, as Mr. Keys has advised the Commission. One-fourth more would represent approximately £1,500. Depôt handling v. siding handling.—Mr Keys advised the Commission that handling at depôts would be cheaper than handling at sidings. It must be apparent that only a certain number of men can work in one gang on one truck at one time. Doubling the number of men in the gang will not reduce the cost of loading per bag, but on the contrary would increase it. A gang of men, whether employed at country siding or at depôt, can handle only a certain number of bags per day. Two gangs of men working at a country siding will show as good an average per man, and therefore as cheap a rate per bag as will 20 gangs working at depôts and handling the same number of bags per gang. Further, the cost of putting into and taking out of temporary stack at country siding before railing to depôt, would be as cheap as putting into skeleton shed for storage and taking out for shipment, with the one exception of the re-bagging costs. But the re-bagging costs have to be incurred just the same when shipment takes place ex depôt. Therefore, putting into and taking out of skeleton shed is just as cheap as putting into and taking out of temporary stack. I cannot see how Mr Keys can make out, as he attempts to do, that handling into and out of skeleton shed would be dearer. In making comparison of cost of construction of skeleton sheds, as against the cost of construction of depôt sheds, Mr Keys instances the extra railage on material. I would suggest, however, that if it were possible to compromise with the Railways on the matter of double haulage, it would also be possible to make special arrangements with them in reference to freight on such a large quantity of material. Further, note the only two means of ultimate disposal of skeleton sheds when their purpose has been served. On the one hand probably the sheds would be taken over as the stand at the siding. If that were so, the greater value of the sheds, as sheds, as against the scrapping of the depot material, would amply compensate for any additional costs of erection, but even if the material had to be sold at skeleton sheds, there is a great demand for iron in the country districts, and if the iron was sold at sidings a better price would be realised for same delivered at country sidings than if delivered at depôts. In giving the Commission a comparison between depôt costs and skeleton shed costs, Mr Keys based his comparative figures on depôt handling costs of ½d. per bushel. I find, however, that the figure which Mr Keys should reckon upon as being the cost entailed by the depot system is 1d. per bushel, not one halfpenny. I give details as follows:—

Mr Hall, in his evidence before the Commission, gave the handling cost at the different depots up to 30th June, which I have carefully worked out from his figures on a bushel basis at... ... 17/32 of a penny

At 30th June screens were not hung at the biggest depôt. The cost of this work I estimate at ... 1/32 of a penny

Rebagging at country siding and at depôt is also a charge against depôt system. I take Mr Keys' figure during his former evidence before the Commission ... ... ... ... ... ⅛ of a penny

Tallying ... ... ... ... ... ⅛ of a penny

Demurrage up to end July—£2,329, say ... ... ... ... ... 1/16 of a penny

Temporary roofing of country stacks (no permanent value but necessary under depot system) ... 1/16 of a penny

Additional records necessary under Depot system, which would not be required under skeleton sheds ... ... ... ... ... 1/16 of a penny

                                                                                                                                                              ________

Total ... ... ... ... ... 1d.

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The difference between the ½d. and 1d. per bushel does not mean much to a Government department operating under a blank cheque system, under which they have access to indeterminable funds, but it means a good deal to the farmer, when one recollects that on a seven and a half million bushel crop on halfpenny works out at £16,000. Mr Keys has apparently understated to you by that amount the costs under the depôt system. Finally, under No. 7226, in Mr Keys' evidence, there is a suggestion that in respect of tallying at depôts, the Scheme consider that they are paying for a service which we are not doing, and that they knew we were not doing. I have to state that at the beginning of the season we came to an arrangement with Mr Keys whereby we undertook to do certain extra work in connection with records in consideration of his obviating the necessity of each party having tally clerks at the depôts. We have fulfilled our part of the arrangement, but unfortunately the Government tallying at depôts on which we were relying is almost valueless, their weights being practically guess weights. In fact, one truck we know of came into the depôt full, and went out empty, without appearing on their records. The conditions in this connection at depôts have been so very unsatisfactory that I would deprecate any suggestion of our accepting the same plan another year. I think Mr Keys, when questioned on this point, should have made clear to the Commission the nature of the arrangements made with him with his concurrence and approval, as can be borne out by correspondence. There are other points in the evidence that I could fault, but probably this will suffice.