T.—l6.

[J. H. O'DONNELL.

We endeavoured at one time to get soldiers to combine in the purchase of plant or expensive implements —tractors, and so on —so as to save costs ; also to get seeds, manures, and other material at wholesale rates. But we failed in this. It worked successfully in Auckland for a time, but we had strong representations from the settlers that they wished to deal with their own firms, and this attempt at co-operation failed. 1 believe it turned our successfully in Europe, although it was adversely reported on by an American Commission sent there in 1913. The associations were adversely commented on % —Yes ; probably the report is in the library here. That Commission reported that while it was adaptable to Europe, where farming was more or less steady right throughout a generation, with ownership for a generation, there was nothing lost in joining such an association ; but in America it was held that the frequent changes in ownership of land, such as is the case in New Zealand, would militate against anything in the form of associations. Mr. Elliot.] That was the main objection ? —Yes. Mr. Forbes.'] Your experience was that it was the outside firms ? —Yes, I think they got trading with the outside firms ; but the pressure did not come from the outside firms, but from the settlers themselves. You are satisfied that the great majority of the men left on the land are triers ? —Yes ; you can class 80 per cent, of those now on the land as first class. There are 10 per cent, perhaps who require some nursing. Another 10 per cent, are perhaps new men. What do the writings-off by the Revaluation Board amount to ? —About £3,000,000. Do you intend writing off much more ? —Not much more. We are faced with a difficult position, and are up against all sorts of problems. The Chairman.] With reference to the stock firms, after you have lent to the individual, what are your relations then to the stock firm. Have you had any difficulties in regard to administration between the two ?—We had difficulties in the past, but we get on fairly well with them now. You hold practically all the client's securities ? —Yes, we hold all the securities. At one time it was a common thing for a stock firm to sell up the stock and fail to hand the proceeds to the Department. Some of the firms would pay this money back to the settler, and we were minus the stock and minus the cash. We had to take steps to call up the money, and some of these firms had to pay up. So that you could distrain on the firms ? —Yes. And do you find that where you have made advances and you hold the security of the individual that the firms are still keen to get the business of the man and give him a little further credit in addition ? —Yes, we have found that in some cases. I discussed that question with Mr. Machin some time since. We endeavour to work in with the firms, and where there is a sale of stock, or wool, and so on, during a time of depression we make a pro rata distribution of profits. Between the Department, the client, and the firm ?—Yes; in the hope that when tilings improve accounts will be put right. When you state that the cost of your administration, with the necessity for a reserve, that there should be 2 per cent, to cover losses and administration, were you referring to the experiences of your Department to date, or were you looking to the future ? —I had in view the experiences of the past. It may be possible to run on a little less, but I have allowed that so as to be on the safe side. What would be your estimate now, starting out with clients with stock at a reasonable price and taking not the soldier as you had to take him, but taking a man whose security you could examine—what is your estimate as to a reserve for administration ? Could it be done on ] per cent. ? —I do not think so. Would you want additional securities beyond that ? —I think so. What authority do you give to your Commissioners : does everything have to come to Wellington for final approval ? —All loans have to come here for approval. Loans for the purchase of stock ?—No ; the Commissioner of Crown Lands submits a recommendation for the purchase of stock, and we leave the purchase entirely in his hands. He controls that through his field officers. He submits to you certain securities, and he is then able to deal direct with the client ? —Yes, that is so. Have you had any difficulty in dealing quickly enough with your client in order to enable him to purchase stock ?—Yes, we have had difficulty that way ; but a few years a,go the Hon. Mr. Guthrie gave us authority to advance up to £100 to enable a, man to start right away, and that was confirmed later on in Wellington. With the experience you have had, what authority would you suggest would be the best to give to your district Board ? Suppose you had a district Board —your Commissioner, and your District Public Trustee and the valuer in the district, and, say, two farmers—what authority do you think it would be wise to give them from the Head Office so far as power to advance against chattels security ?—I am of the opinion that more expeditious handling of business is desirable. If we had a Board set up. an expert local Board realizing its responsibilities to the State or to the institution lending the money, I think the Board might be entrusted with the advancing of money—say, up to 75 per cent, of stock value. But I think that, following that, there should be a report submitted to headquarters once a month as to any business transacted, with a statement of securities, values, and so on. Where the loan was over 75 per cent., that should be submitted direct to the Head Office ? —Yes. The I per cent, which you refer to as administration : were you allowing the costs of your Commissioner in connection with that I—We only charge for a very small portion of the Commissioner's time. So far we have not charged probably more than about £100 a year out of the Commissioner's salary. Thfit would be a fair thing for the amount of work he did ?—Yes,

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