rate, charged up to the Wheat Scheme. We will of course keep separate accounts and when bulk storage merge into a general scheme of bulk handling involving special financial arrangements, the necessary financial adjustments can be made. You will notice also on the same file that the Under Secretary for Works received an instruction from Mr . Key as follows— In connection with our conversation of this afternoon , I beg to confirm the arrangements made whereby the Scheme will, on application, provide both the necessary expenses in connection with Mr .Pearse's salary, during his visit to the Eastern State on Wheat Scheme matters, and the preliminary expenses for surveying the silo sites up to with respect to the latter work, the £250 authorised by Cabinet. Did you know of this?.— We are having an argument now as to whether it is to be a Government charge or a charge against the Scheme. 1475. Then has not Mr .Pearse been paid in accordance with the arrangements made in March last?— We have advanced his travelling allowances from time to time from the Scheme's account. It is all subject to whether adjustment is decided on by Cabinet and the board . 1476 And has not his salary been paid by the Scheme?— Not yet; only the travelling allowance. 1477.But it the intention to pay his salary from the Scheme because the Minister for Works is paying another officer to do Mr .Pearse's work while Mr .Pearse is in the Eastern State ?— So far as Mr .Pearse's visit to the Eastern State is concerned. he went primarily on silo work and he also did a lot of work connection with the Wheat Scheme and that will have to be apportioned. 1478. Is it not fact that when Mr .Pearse was sent to Melbourne in connection with the Metcalf agreement with a view of erecting silos, he found , owing to a delay in having the agreement signed that he was unable to proceed with the work as he desired, and that then you found other work for him to do— That is not correct.? 1479.He was sent over there in connection with silos?— Mainly. 1480 Then he was communicated with afterwards to look into other matters? — He was instructed before he went to the Sate as to what he was to inquire into. 1481. What amount has the Scheme paid altogether in travelling allowance?— The list is as follows— J. Sibbald, ,salary £1,000, travelling allowance £28 14ds. 6d., days absent 40½; F. C. Keys, salary £1,000, travelling allowance £25 19d days absent 24¾; G. L. Sutton, salary £750, paid by Agricultural Department, travelling allowance £42 4s 9d., days absent 51¾; T. S. J. Hall, salary £504, travelling allowance £23 2s days absent 22; A Berkeley, salary £384 travelling allowance £23 17s 9d days absent 22¾; R. S ,Child salary £320, travelling allowances £23 2s,days absent 22; A. F. Pearse (salary not quoted). travelling allowance £185 advanced days absent 126¾. all these allowances have been paid by the Scheme. 1482. The salary, then have been paid by the Government?— Only Mr .Sutton's Mr .Pearse's salary I have not mentioned. 1483. Then the instruction contained on the file has not been put into effect?— .Pearse is only just back and he has not had it me to put in his expenses. 1484. But his salary has been paid all the time?— Yes. 1485. You stated that payment had been made to the various agent for re-conditioning the wheat of the 1915-16 harvest. That was work outside the agreement?— That was in accordance with the the terms of the agreement as set out the continuation agreement for the 1915- 16 handling. 1486 That is , that any wheat that had to be re-conditioned owing to the negligence of the agents had to be paid for by the Pool?— I think I had better read a minute I submitted to Mr .Baxter, upon which all these claims were paid. The Commission will then be able to fully understand the subject. With respect to the agents' claim for out-of-pocket expenses actually incurred in recondition and re-bagging the 1915-16 wheat acquired by them, some of which have been settled with your concurrence, and payments on account been made in connection with other, I think it not now undesirable to set out for record purposes the general and uniform method that has been adopted in dealing with them. We have now established precedents for settlement that the leakage of information cannot seriously affect. Practically all of the claim made were submitted under the continuation agreement, 1916.These were for work done after 30th September, 1916 (the date of the expiry of the original acquiring agreement), necessitated by damage to stacks subsequent to that date and by damage prior to that date not caused by agents' negligence. For this work the Scheme takes responsibility under such continuation agreement. Under this agreement. copy of which is attached, the Scheme must pay for all costs of reconditioning and re-bagging necessitated by damage cause prior to the 30th September on non-neglected stacks, less Is per bag on 3 per cent of the number of bags in the stack. This allowance has already been collected by the Scheme from the agents on the aggregate number of bags on hand on 30th September, 1916, including the stacks that have been black-listed by the Scheme for negligence. Where there was negligence in the protection and care of stack customary in the trade, and the agent was notified by the Minister of such stacks ,then the agent is alone responsible for such damage cause by such breach (not including, of course, that rendered necessary by fire, flooding from below, weevil, or plague of mice). For any re-conditioning for damage since the 30th September, the scheme is responsible, provided that the work of re-conditioning, etc., is done with due care and reasonable economy. The recommendation of the Committee (Messrs. Flied, Hammond, and Bickford) respecting these claim was: "All reasonable claims under the continuation agreement should be admitted provided that an adequate allowance for damage done to a stack through agents' negligence be deducted." Although negligence was as a fact alleged to the agent for practically all of their stacks held on 30th September, 1916 it has been found practically impossible to prove with any degree of certainty absolute negligence, and it has therefore been difficult to assess what allowance should be deducted on that head by the Scheme from the agents' claims. Our difficulties have been :— (a) The original report of the Scheme's inspector indicated negligence and though possibly correct, they have not been supported by evidence practical to the trade and of value arbitration proceedings. (b) Trade usage and custom do not bear out his allegations of negligence, which were in most instances, of too general a nature to be conclusive.(c) The working costs of re-conditioning though particularly high are accounted for in the majority of cases by either the remoteness of the sidings from reasonable cheap labour, the time of year for delivery, the scarcity of labour, the delay in despatch owing to shortage of trucks(in new wheat season). or heavy March, 1917, rain doing extra damage to wheat and bags.(d The absence of a general manager's technical knowledge to deal with the claim on a basis that would bear challenge in an Arbitration Court of wheat experts. (Note— The late manager resigned without having finalised any claim, and the new manager ,being an interested party as late manager of one of the agent concerned, could not give us the benefit of his knowledge.) Not with standing these difficulties our chief inspector Mr .Pearse, has been able to afford very valuable assistance owing to his expert knowledge of the wheat business, with the result that we have been able to treat favourably and equitably with those agent who have not adopted the attitude of exacting from the Scheme more than a reasonable recoup for the moneys that have been paid away by them. We have taken the stand (Whether negligence has been alleged by our inspector or not) that any expense incurred by the agents greater than the costs usually obtaining in the trade is in itself evidence of negligence, or at any rate of non-expert handling of the wheat, of protection of the stacks, re-conditioning the bags, purchase of sacks, engagement of labour or supervision of working. We we could , we have supported this attitude by indicating to the agent with whom we.

heat W,

Rate. charged up to the Wheat Scheme. We will, of course, keep separate account, and bulk storage merges into a general scheme of bulk handling, involving special financial arrangements, the necessary financial

rate, charged u

rate, charged up to the Wheat Scheme. We will , of course, keep separate account, and bulk storage merges into a general scheme of bulk handling involving financial arr

adjustments can be made.