ment, however, was to put into the Scheme and we were to get whatever the Scheme realised. The wheat cost us about 4s. a bushel and the Scheme charged for it about 5s. They owed us, therefore, 1s. a bushel, because we had only lent it to them. My debit against them for that equity was £30,000. I pointed out to them that although the contract agreements provided that this equity should be settled on the ultimate realisation, "Virtually the position is finished now; you know what you have to pay me. Why not adjust it now; why ask me to go on lending you £30,000 which I cannot afford to do?" I had to finance as other merchants have to do and I could not afford to stand out of that £30,000. But they would not allow me a penny. They persisted in writing letters about my account being in arrears and finally I got Mr. Mitchell to allow me £15,000 off it and the balance to be fixed up when the Scheme realised. Mr. Mitchell acted in a peculiar manner after making that arrangement with me; he replied that the arrangement was not as set out. At the same time the amount was credited in the Scheme's books, and it was deducted when I came to make any settlement. But they still persisted in turning a blind eye to the position. Those figures came up before the advisory board and Mr. Deane Hammond took rather a jaundiced view of the matter. He considered that, having taken this wheat from the farmers, we had robbed the farmers of the difference, and instead of having £30,000 due to us, we should not get one penny. We were never persona grata with the board because of the state of our account. Right up to the present time we have not been able to arrive at any finality in connection with that contract wheat. When I was in the Eastern States in April last they issued a writ against all the millers. In my own case the claim came to £20,000. It is still in abeyance. When the writ was issued instead of allowing £15,000 I charged them up with the whole amount and credited them with what has been paid as dividends. The difference is about £18,000, and that is still is dispute. Apparently it is going to remain in dispute.

7492. We have not attempted to investigate that because we were assured by Mr. Sayer and others that the matter was in dispute?—Yes. I have merely touched upon it seeing that this is an opportunity of putting forward my version as to what has happened between us and the Scheme. The general impression is that the millers have robbed the Scheme, whereas we have done nothing of the sort. In the following year they reused to appoint my firm as agents. The only way in which it hurt us to any extent was in regard to Kellerberrin. We could grind all the wheat produced in the Kellerberrin district. Mr. Sutton, then chairman of the Board, told me that even if we were not appointed acquiring agents he would see to it that we got all the Kellerberrin wheat. He did not carry out his promise. The Kellerberrin wheat was handed over to the various agents and was sent into the Kellerberrin yard, where it was badly stacked. During the winter the Kellerberrin yard became a lake and a lot of the wheat was badly damaged. I had told the Scheme that if they would let us have the wheat we would do the extra handling for nothing. But no. Ockerby & Co. were not to be allowed to touch it. On the 24th July, 1917, I received this letter from the secretary of the Scheme:— With regard to the wheat you have agreed to accept into the mill from Dalgety's stack at Kellerberrin, I should be glad if you would do all you possibly can to take delivery of this wheat as quickly as possible. I am advised that the station yards at Kellerberrin resemble a huge lake, and it is feared that unless the stack is moved at once it will collapse with resultant heavy loss. Justifiably we could have told them to get out of their own mess as best they could. Instead of this we took the wheat as quickly as possible and gristed it. Again, the Scheme treated us harshly in regard to payments for wheat milled for private export. According to the contract entered into we were supposed to pay a premium on all wheat exported to the Far East. The rates were, for local consumption 4s. 9d., but for Singapore and Java it was fixed at 5s. and has now reached 6s. 4½d. After we had shipped the flour we were supposed to pay the premium. But no sooner did the agreement come into effect than the Scheme insisted upon our paying up before we had shipped the flour. The Japanese steamer "Nisshu Maru" came into Fremantle, and on the 10th September, 1917, I wrote to the manager of the Scheme as follows:— This steamer is now in port and open to take a full cargo of flour, approximately 3,000 tons, as far as Singapore, at which port the vessel must be handed over to her owners, she being now on time charter. We have been negotiating for freight with this vessel for the past fortnight, but it was only at one o'clock on Saturday that they made us a definite offer, so that there has been no time to do anything. The best we can do is to guarantee 1,000 tons, which we are shipping to Singapore, and if the vessel is not able to obtain any more freight she will sail at mid-day on Wednesday with this 1,000 tons only. It occurred to us it might be possible to ship Imperial flour via Singapore and have it transshipped at that port awaiting the first vessel bound for England. No doubt there are more vessels leaving the port of Singapore en route for the United Kingdom than from the port of Fremantle, so that there would not be much risk in filling the vessel, besides which it would assist millers who are overstocked, and also save expense in regard to storage at Fremantle. This was in reference to some of the large stocks of flour which we had ground and did not know what to do with. The letter concludes:— Unfortunately there is no time to make negotiations, and a decision must be arrived at by yourself forthwith, as the vessel requires an answer to-day. They sent an urgent wire to the Australian Wheat Board, asking for permission to ship this Imperial flour. But the permission was not given. We put in 1,000 tons, and next day I notified the Scheme of this and explaining that we had not sold it, I asked would they wait for the payment until the flour was sold as we had to ship on consignment. They said, "No; you must put in your premium at once." I wrote them next day as follows:— Re "Nisshu Maru." We herewith enclose cheque for £1,500, which we pay under protest, being approximate premium on flour shipped by the above steamer, and such not being in the terms of our agreement. We ask permission to ship 1,000 tons of flour per the s.s. "Nisshu Maru" to Singapore, commencing to load to-day. Fortunately we happened to sell that flour in transit, and showed a slight profit on it. But you can see the attitude of the Scheme towards the largest exporting miller. All that we were anxious to do was to assist the Scheme. They would not assist us to sell the flour. Their attitude was to make matters as awkward as possible for the miller, and to keep him right up to the agreement.

7493. But prior to the Scheme you would have had to pay for the wheat?—Yes, but it is not the same thing. I would not go and buy a large quantity of wheat and go on milling it if I had not a market for the flour. Moreover, under normal conditions, I would be able to make freight arrangements and sales three or four months ahead, whereas under present conditions it is impossible to say what one is going to do from day to day. Our present export outlets are confined entirely to Singapore, and although we get a little business with Java the Naval Control Board will not allow vessels to take flour for Java direct. Flour from Fremantle has to go to Singapore and be re-exported thence to Java. On the other hand, various lines of streamers are taking flour from the Eastern States direct to Java at from £4 to £5 per ton. In our case, having to go to Singapore and thence to Java, the freight amounts to quite £8 per ton, and consequently but very little business is done between here and Java. In connection with the payment of wheat milled for private export trade, on the 13th September, 1917, I wrote the manager of the Scheme as follows:— Owing to the dearth of tonnage for British Imperial flour contracts, no shipments are now being made, and storage will have to be found for large quantities of flour, probably aggregating 40,000 tons, unless millers are encouraged to look for private export business, or alternatively, to cease milling operations. If at the present time any miller grists and packs flour under the respective packages required for various markets— notwithstanding the