MINUTES OF EVIDENCE. 



31 



16 September, 1919.] 



PROFESSOR R. G. WHITE. 



[Cnntinued. 



Total surplus 

 Total deficit 



SUMMAKT OP RESULTS continued. 



a. d. 



4,056 8 10 



1,277 12 G 



Appreciation in value of farm due to per- 

 manent improvements, buildings, draining, 

 Jcc 



(552 on 30 years' basis :i run) 



2,778 1C, 4 



500 



3,278 IK 4 



This leaves about 400 per annum to cover interest 

 (on about 6,000), clerical work and management 

 expt'h 



Some explanation of the deficits in the earlier years 

 and the apparently large surpluses in the last two 

 years is necessary. 



(7) During the first two years considerable sums of 

 money were spent on the purchase of pedigree stock 

 and on general improvements of such a character that 

 the full benefit has only just been realised. For 

 instance, in 1910 and 1911 over 50 tons of basic slag 

 were used on the farm. In 1910-11 cattle which 

 appeared in the valuation at 324 were purchased at 

 a cost of 572, while in 1911-12 four pedigree cattle 

 which appeared in the valuation at 81 w,ere pur- 

 chased at a cost of 280. The benefits of these pur- 

 chases are just beginning to be realised. For instance, 

 in 1916-17 pedigree breeding stock, mostly bull calves, 

 to the value of 250 were sold, while in 1917-18 

 seven bull calves and one hull were sold for a total of 

 490. 



(8) The following table, showing the sums spent on 

 feeding stuffs each year, is also relevant as indicating 

 that in 1918 reserves accumulated during previous 

 years were to a large extent realised : 



FIT, Hill/ Stuffs. 



1910-11. 297 15s. 4d.. plus all the home- 

 grown grain. 



1911-12. 521 Os. Od.. plus all the home- 

 grown gruin. 



1912 -13. 430 8s. 2d. } and practically all 

 \ the home-grown 

 56 3s. 8d. ) grain. 

 1913-14. 582 9s. Od., and practically all 



tlic home-grown grain. 

 1914-15. 661 8s. 2d., and greater part of 



the home-grown grain. 

 1915-16. 695 13s. Od., and greater part of 



the home-grown grain. 

 1916-17. 621 18s. 7d., and greats part of 



the home-grown grain. 



1!)1 7-18. 121 15s. 7d., and only a small 

 proportion of the home-grown grain. 



(For the Accounts referred to set Appendix No. II.) 



[This concludes the evidence.-in-chie/.\ 

 Chairman: Then Mr. Smith will begin questions. 



9865. Mr. Smith : You state in the first paragraph 

 of your precis that a great deal of money was spent in 

 the early years on improvements, and I take it that 

 is all in the balance sheets of those years? That ex- 

 penditure is included in the balance sheets, but not 

 specified separately. 



9866. You suggest further that during the last few 

 years this work lias IK-CM somewhat neglected, so that 

 the position now practically is the samp as in 1910, 

 or not much different? Yes, that is no, from a finan- 

 cial point of view. I ought to point out that this is 

 allowing for the extra cost of carrying out such work 

 at the present time. 



'. I rather gathered you came to the conclusion, 

 after making a <lu- allowance for the high cost of 

 material that may hnvo to be used for fencing, and 

 so on? Yes. 



9868. On the bnlanc" sheets as n whole, do you 

 siiKK'-st from a commercial point of view there is a 

 Ions or a profit'' I think that is shown, if I may say 

 *bc summary which is given in my precis. 

 1 ThiTi-fur--. if due allowance was made for 

 interest on the 6,000 and clerical work and manage- 

 ment expense*, there would be a deficit? It depends 



of course on what rate of interest you allow. I mean, 

 if you allow 5 per cent, interest for the whole period, 

 they just about clear themselves. 



9870. In regard to your valuations, I notice you 

 state here that you valued your cows in the dairy 

 herd in 1918 at 18 each? Yes. 



9871. Do you suggest that is a fair figure to put in? 

 Of course it is very much lower than their value at 

 that time. I do not know whether you have any 

 experience of farm accounts; but so much in farm 

 ace. units depends on the valuation, and we have 

 adopted the policy of keeping the value (in our 

 valuation) of different classes of stock at about the 

 same each year, provided that they are of simliar 

 quality. That .seems to us to be the only fair way 

 if you are to avoid what you might call fictitious 

 profits and losses each year. 



9872. But you state that the stock on the farm 

 is pedigree stock of fairly high quality. Would not 

 that mean that to purchase these cows in the market 

 yon would have to give nearly three times 18 each 

 tor them:' I should be glad to think I could get 

 iniif of them for three times the value. 



< You would be fortunate if you could get sonic 

 of them at three times the value:' Yes. 



9874. Would the amount of your stock be equal, or 

 about <-qual, to what it was in 1911? Yes, about 

 equal. 



9875. Then there has been very little appreciation 

 in the value of the stock as between 1911 and 1918. 

 your figure in 1911 was 5,472, and in 1918 it was 

 6,860? V. . 



9876. So that there are other things besides cows, 

 the, value of which has been kept down? The value 

 of what you might call permanent .stock, not merely 

 the cows, but also the breeding flock of ewes and 

 that sort of thing, is kept at the same figure or 

 about the une figure each year so long as the stock 

 are about the .same quality. 



9877. Do you consume on the farm a great deal of 

 the stuff you grow? That I think is shown in para- 

 graph (8) of the precis. In the earlier years we con- 

 sumed all tin- home grown grain; but during the last 

 year or two we have sold an increasing proportion 

 of the home grown grain. Every year straw, roots, 

 and food of that kind, except quite trifling quantities, 

 is consumed. 



9878. That produce costs you more to grow to-day 

 than it did in the earlier years ? Yes. 



9879. Do you think it is fair, after having fed 

 stock on produce that costs you a groat deal more 

 to grow, that you should still value your stock at the 

 same price as you did in the earlier years? That is 

 rattier a debatable po ; nt. Perhaps I illicit explain 

 the object of this. The alternative would be to 

 value the stock each year at about the current market 

 price. But. take for instance, our flock of ewes. We 

 have, say, 600 ewee. We value these, say, this year 

 at 2 each. Next year the market may break or it 

 may rise, and they would be valued at a very con- 

 siderable difference showing either a profit or n 

 loss, but actually there would not have been either 

 n profit or a loss made. We have the same flock 

 of ewes. We cannot sell them or else we cease being 

 sheep farmers. 



9880. But there is a difference, is not there, in 

 taking the, full market value of your stock and keep- 

 ing them down at the figures you have put in lierep 

 There is; but it is a question where yon are 

 going to draw the line. Of course it can be argued 

 both ways ; but we have adopted that policy as being 



