6. Based upon the figures furnished by the promoters of the plan, the losses to be borne by the Government and various classes of creditors are estimated as follows:—

_______________________________________________________________________________________________________________

                                                                                               |                        |                        |                        |                        |
                                                                                               |    Agric. Bank   |  Storekeepers.  |     Machinery    |   Associated     |
                                                                                               |     and I.A.B.     |                        |      Merchants   |      Banks.       |

_______________________________________________________|______________|______________|_____________|______________|

                                                                                               |           £            |          £           |           £            |           £           |

Loss by writing down Statutory 15% | 1,224,375 | 793,125 | 168,750 | 675,000 | Loss of interest on balance, 2%, 5 years simple interest | 693,812 | ... | ... | 382,500 | Loss of interest on balance, 4% and 8% respectively | ... | 898,875 | 382,500 | ... | _______________________________________________________|______________|______________|_____________|______________|

                                                                                               |     £1,918,187    |    1,692,000      |      551,250     |     1,057,500      |

_______________________________________________________|______________|______________|_____________|______________|

Summary— £ Agricultural Bank and I.A.B. 1,918,187 Storekeepers 1,692,000 Machinery merchants 551,250 Associated Banks 1,057,500

                                                                       ________
                                                                       5,218,937

Add Government contribution to machinery debts and costs of administration, interest, etc. 2,250,000

                                                                       ________

Total losses £7,468,937

Note: (1) Above interest calculations have been based upon assumed maximum rates as follows:— Agricultural Bank and Associated Banks—6%. Storekeepers and machinery merchants—8%.

(2) In addition to the above losses, the State would in all probability have to meet losses arising out of guaranteed debentures issued for purposes of future production.

(3) Above losses do not include the writing down that may be made a condition precedent to admission to the plan, nor any estimate of losses likely to be asesssed as arising out of the proposed review at the end of five years.

PLAN-W. E. SOUTHWOOD.

Mr. Southwood has reduced the Nationalist Party plan into a "nutshell" form with the following important amplification and variations:—

1. A suggestion that the writing down of debts be deferred for five years, after which they be funded.

2. That the Trust to be created should not be a Government department, but that the services of the Agricultural Bank be co-opted—presumably field services.

3. That the accounting be carried out at a central office—departmentalised as to districts. The work pertaining to each district to be supervised by experienced public accountants for a fee of £10 per annum per settler.

In addition to the plan, estimated costs of cropping per acre are given as well as suggestions for reducing costs of production.

PLAN—WHEAT GROWERS' UNION OF W.A.

Synopsis.

Control:

Control of plan to be vested in three trustees representative of the Government, merchants and farmers.

Advisory Council of nine as consultants to trustees.

Classification of Past and Future Debts:

Division 1.—Debts incurred in cropping and harvesting 1931-32 season's crop, including a sustenance allowance of £120-£160 per annum.

Division 2.—Debts incurred in cropping and harvesting 1931-33 season's crop, including a sustenance allowance of £120-£160 per annum.

Division 3.—(a) Debts secured by bills of sale, stock liens and hire-purchase agreements.

(b) Other unsecured debts.

Division 4.—Debts secured by mortgage.

Initial Adjustments:

1. Interest on all debts to be reduced to 4 per cent. 2. Division 3 debts are to be written down by 40 per cent. 3. Division 4 debts to be written down by 15 per cent. or a greater amount if considered necessary for the eventual recovery of the farmer, but the additional writing down to be without detriment to the creditor.

Liquidation of Current Debts:

Firstly.—Division 1 (or 2 as case may be), and three-fifths of the balance remaining to second and third preferences as follows hereunder.

Secondly.—An annual instalment of one-fifteenth of Division 3 (a) debts, and any deficiency under this head brought forward from previous year or years.

Thirdly.—An annual instalment of one-fifteenth of Division 3 (b) debts.

Fourthly.—Any balance remaining out of the three-fifth proportion, together with a further one-fifth, in payment of annual interest (at 4 per cent.) and other dues on mortgage debts in Division 4, and any previous year's deficiency under this head.

Financing Future Production:

Trustees to be empowered to raise funds from trading banks according to interests in the industry for financing on a cash basis.

Moratorium:

Moratorium to be enacted and to operate for five years, at the termination of which further adjustments may be made upon review.

Solvent Farmers:

Solvent farmers are also to have protection under the plan and their debts similarly written down.

Price-fixing:

Trustees to have the power to fix prices or prevent exploitation.

COMMENT.

The scheme not recommended, for the following reasons:—

(1) A writing down of 40 per cent. against unsecured creditors would seriously affect their financial stability as well as the interests of the Taxation Department, particularly when it is borne in mind that considerable debts up to 100 per cent. will have to be written off in addition in the usual course. Also that reduction to 4 per cent. in interest in