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Wheat (1) - Part 1

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1488. For the purpose of entering into negotiations?—Yes.
 
1488. For the purpose of entering into negotiations?—Yes.
 
1489. So you are satisfied in your own mind that the agents only received what they were justly entitled to?—I would not like to say that. Bell's, I think, received a little more than they were equitably entitled to, but, in the case of Darling and Dreyfus, I think very fair settlements, from the point of view of the Scheme, were made.
 
1489. So you are satisfied in your own mind that the agents only received what they were justly entitled to?—I would not like to say that. Bell's, I think, received a little more than they were equitably entitled to, but, in the case of Darling and Dreyfus, I think very fair settlements, from the point of view of the Scheme, were made.
1490. Would not the settlement with Bell bear fair comparison with the other settlements?—Not quite. The main point on which they practically compelled settlement was this: they said, "Our work, our re-conditioning, may have been more costly than that of some of the other firms, but we have secured for the Scheme a greater surplus than secured by the other agents; and if you can show in respect of Darling's that we have not produced a bigger surplus, we will accept settlement on Darling's basis." Of course we could not, and so the Minister accepted their reduction of £350 off their claim. We had wanted £700 off.
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1490. Would not the settlement with Bell bear fair comparison with the other settlement?—Not quite. The main point on which they practically compelled settlement was this: they said, "Our work, our re-conditioning, may have been more costly than that of some of the other firms, but we have secured for the Scheme a greater surplus than secured by the other agents; and if you can show in respect of Darling's that we have not produced a bigger surplus, we will accept settlement on Darling's basis." Of course we could not, and so the Minister accepted their reduction of £350 off their claim. We had wanted £700 off.
 
1491. They practically divided it? —That was the net result.
 
1491. They practically divided it? —That was the net result.
 
1492. The settlement with Bell was based on the fact that Bell could show a greater surplus than could Darling & Son?—Yes.
 
1492. The settlement with Bell was based on the fact that Bell could show a greater surplus than could Darling & Son?—Yes.

Revision as of 02:07:57, May 18, 2018

negotiated for settlement the particular items of negligence for which we considered deductions should be made, as, for instance:—In protecting and caretaking: (a) delay well into wet months before roofing and screening was effected; (b) covering by tarpaulin instead of roofing by ordinary method of g.e. iron; (c) failure to patch or sew burst bags; (d) insufficient and inefficient screening; (e) bad stacking with insufficient ties, dunnage, and drainage; (f) not taking prompt remedial measures in re-stacking, re-roofing, etc., after damage once caused, whether by weevil, flooding from below, mice plague, or fire, etc. In re-conditioning, re-bagging, etc.: (g) extravagant use of sacks; (h) undue cost of secondhand sacks; (I) protracted delay in work of reconditioning; (j) exorbitant rates for labour; (k) lax supervision. Where no negligence has been alleged by the Scheme to the agents, and the working costs and re-bagging percentages are responsible, the agents' claims are paid in full. After duly considering the first year, in wheat handling for the Scheme, we have fixed as a limit of country stacks the following rates as the maxima which we should not allow as being excluded from the charge of negligence (any-thing over these rates we regarded as being the causes of negligence in one or other of the directions indicated above):—Working costs of re-conditioning including price of sacks, 3½ d. per bag, or alternatively price of sacks purchased, 7s. 9d. per dozen, with working costs 2¼ d. per bag. Percentage of bags in stack to be re-bagged, 21 per cent. At the port of Fremantle the maximum rate that we propose paying to an agent for re-conditioning is 1.3d. per bag of the total quantity of the wheat handled there. The cost at the ports of Bunbury and Albany are considered reasonable. There were about half a dozen claims made for re-conditioning of country stacks prior to 30th September, 1916. These claims were made by the agents under the original 1915-16 agency agreement. The claimants alleged that these costs arose from damage caused from flooding from below, weevils, plague of mice, or other factors for which the agent was not responsible under his agreement. The Advisory Committee have all along taken up the attitude that they do not admit the existence of a mice plague, but, in view of the excessive damage cause by the mice in 1916, they would agree to pay such costs provided no substantial loss was occasioned through negligence on the part of agents. (See resolution of Committee, 16th August, 1917.) The same difficulties as I have indicated arose in dealing with these claims, and we were compelled to deal with them as with the re-conditioning claims arising out of the continuation agreement. The recommendations to pay which are being made on the individual agents' files are subject to this minute. Before the Minister approved of this minute, the principles of which I had previously discussed with him, to enable certain claims to be settled I suggested to him that as he had not a general manager to advise at the time of those settlements it would not be unwise for him to seek to opinion of Mr. Keys as a general manager. In response Mr. Keys said this:— Further to Mr. Hall's minute in regard to the settlement of claim under the 1915-16 continuation agreement, I desire to state that the basis set out in the minute is my opinion fair and reasonable. I settled up with the Scheme for Louis Dreyfus & Co., and agreed to a number of allowances being made whilst I was sure that I could have forced the Scheme to have paid the full amount by going to arbitration. I did not think the Scheme would not be able to prove that Louis Dreyfus & Co.'s work had not been done with due economy. The main motive prompting me in agreeing to reduction of certain claims was that I was of opinion that the sub-agent carrying out the work had been lax in supervision. It is of course impossible to compare one stack with another as the conditions vary, but to those acquainted with wheat handling the conditions at one stack should be a very reliable guide to what the conditions, should be at another nearby stack. It was also noticeable that in regard to Dreyfus's best agents, their claims were all reasonable, and it was only with agents from whom I would have expected lax supervision that excessive costs were incurred. Therefore, I was agreeable to meet the Scheme in the cases where they contended due economy had not been exercised, as in my opinion I was satisfied that an allowance should be made, not-withstanding that I could have had the whole lot, in my opinion, if I had fought it out by arbitration. 1487. Was there any large quantity of wheat that he had blacklisted in any of these companies?—To be on the safe side, we practically blacklisted the lot. 1488. For the purpose of entering into negotiations?—Yes. 1489. So you are satisfied in your own mind that the agents only received what they were justly entitled to?—I would not like to say that. Bell's, I think, received a little more than they were equitably entitled to, but, in the case of Darling and Dreyfus, I think very fair settlements, from the point of view of the Scheme, were made. 1490. Would not the settlement with Bell bear fair comparison with the other settlement?—Not quite. The main point on which they practically compelled settlement was this: they said, "Our work, our re-conditioning, may have been more costly than that of some of the other firms, but we have secured for the Scheme a greater surplus than secured by the other agents; and if you can show in respect of Darling's that we have not produced a bigger surplus, we will accept settlement on Darling's basis." Of course we could not, and so the Minister accepted their reduction of £350 off their claim. We had wanted £700 off. 1491. They practically divided it? —That was the net result. 1492. The settlement with Bell was based on the fact that Bell could show a greater surplus than could Darling & Son?—Yes. 1493. And every possible care was taken to protect the interests of the Pool in respect of the agents?—Generally speaking, yes. 1494. In one of your reports to the Advisory Board you state that for each bushel of wheat received by Bell & Co. an average return of 4s. 9.008d. was derived by the Scheme, as against Darling's 4s. 8.886d.?—Yes. 1495. So it was in the bushel, and not in the quantity per bushel?—As a matter of fact, it was both. 1496. The settlement was accepted purely on the prices; their wheat was in better condition?—No. It appears that 4s. 9.008d. as compared with the 4s. 8.886d. refers to the benefit we receive from the farmer and we get that result by the fact that Bells out-turned more wheat, that is more surplus than did Darling, but it might have been that the surplus, it is only a technical point, they out-turned per bushel only realised, say, 2s. 3d. as against 3s., the difference would be made up by the extra quantity. 1497. I notice in the return you have given me that Dreyfus & Co. issued certificates for 3,484,503 bushels of wheat?—Yes. 1498. And they delivered to you 16,405 bushels surplus over the amount they issued certificates for?—Yes. 1499. I notice the total amount you received surplus was 74,893 bushels. According to the letter on the file the amount of wheat acquired by Dreyfus & Co. shows over 400 tons of surplus. There should be a big loss somewhere as far as the whole of the wheat acquired is concerned. This works out to 439 tons as a surplus of the wheat handled by Dreyfus & Co., but if you come down you find the total surplus was 74,893 bushels. There must have been a big loss as far as the Scheme was concerned as there is no surplus wheat accounted for in the total wheat acquired with the exception of 74,000 bushels, or less than one-half of Dreyfus & Co.'s?—Are we not at cross purposes? The total surplus is 74,000 and Dreyfus' is over 16,000. 1500. You have only 74,000 against the whole acquirements of 14,129,000. How does that work out in comparison with Dreyfus & Co.?—I think it discloses that there was a lot of wheat we termed natural in-crease, but it is called another name in the trade. There is no natural increase as far as the mills are concerned. The mills do not show any natural in-crease.