C"M.MI|t>.\ u.N AGK1CULTUKE. 



33 SffUmber, 1919.] 



MB. H. O. HOWELU, F.C.A. 



[Continued. 



of their actual accounU, bo-.-ause we say on this par- 

 ti, ular page: " Tho above headings are for guidance 

 only, and no values are to be inserted h. 



11,'JIU. Have you been ablo to extract from their 

 counts the details that you asked for on this page 3? 



In tlii- gnvat majority of cases, ves. 



11,21.'). That would give you the excess of income 

 over ttMndittm for the particular icar.- It would. 



ll,2It>. Have you extracted that anywhere- 1 have. 

 mil it is in the report in paragraph ;t. You liavf 

 the total expenditure with a big figure opposite to 

 it, and also lower down the total income. 



11.217. The total expenditure is 1.276,843, and the 

 total income 1,249,336?- > i 



11.218. Those totals are the income and expendi- 

 ture as shown in Schedule A, as extracted by \<>u 

 from the ae.-,.uuu sent in ': 



I1.21H. Standing there that slicm.s that these :M 

 farmer!, have for their income for the year ending 

 MichaelmiKi. 1'JI-. reicived less than they paid out: 1 



Kxcluding the valuations, yes. 



11.221). Kxa-tly. 1 am dealing with the actual 

 cash payments and tho actual cash receipts? 1 Yes. 



11.221. It is something like 36,000 less? Yes. 



11.222. Therefore Mr. Parker WHS quite right when 

 he pointed out that the only profit as shown by these 

 accounts is made by the excess of valuation at the 

 rnd of the year over what it was at the bpgiiinini: of 

 the year? Yes. 



11.223. Looking at Schedule A, in the circular 

 sent out to these 304 farmers asking for their 

 account*, I see the item is headed: " Statement of 

 aaaetn and liabilities. Inventory at the beginning 

 and end of the year," and it sets out the details of 

 how that inventory is to bo made out? Yes. 



11.224. Did these 304 farmers fill up this form? 

 Yes, they practically all filled up that form. 



11.225. They took this form as it stands and filled 

 it up? Yes. 



11,22<>. Art> the figures appearing in paragraph 3 of 

 your report, " commencing valuations 1.480,273," 

 valuations that would bi> at Michaelmas. 1917, made- 

 up from this form which has been filled in by the. 

 farmers of their commencing values? Yes. 



Chairman: That is stated in the memorandum : 

 " The result* shown bv the aggregate number of 

 accounts dealt with under Classes 1 to 6 (304 in 

 number) are as follows." It does not carry you a jot 

 further. He say-: " 1 have received these stat-e- 

 raents and these are the results." 



11.227. Mr. Cautley: The ending valuations were 

 1,697,343? Yes. 



11.228. Was that figure made up in the same wav 

 from the detailed valuations made up by the farmers 

 and sent in to you on this form shown oil Schedule A ? 

 Yes. 



11,225). So you are in a position to deduct the 

 valuation of all the details of the live stock and of 

 the grain and the hay and the roots, and the other 

 details t out in these valuations at the beginning 

 and the end of the year? I could not do that in 

 quite nil cases because, while I said that practically 

 all tho farmers did fill up this form of inventory, yet 

 they might not, for example, have given me the. 

 number* and the values of each class of their live 

 stock ; they might have given me a total money figure 

 only. 



11.230. Yes, they might only give you the amount 

 they had in horses and cattle and dairy cows, and w> 

 on, and not tell you tho numbers? That is so, or it 

 might be one figure for all the live stock but that. 

 would not be in many cases. 



11.231. Mr. 1'arker wag quite right in his criticism, 

 that the only profit made as shown by these accounts. 

 *t any raU 1 , has been due entirely to the im-rea-,- in 

 the valuation at Michaelmas, 191$, as compared \\ith 

 the valuation of the stock in haml at Michaelmas. 

 !!i]7.'_ That is so using the term "profit " in the 

 sense in which I tine it in the report. 



11.232. I aluo sen that in one passage in your iv|H>rt 

 you say that the farmers for the main part adopted 

 the market price an the basis of the valuation? 



'lid. 



lf,2.T(. DIWH ihat apply l. their machinery, for 

 instance? In a large number of cate, ACS Or it 

 was stated to apply to it. 



11.234. You do not really think, do you, that the 

 farmer has increased the value of his machinery from 

 year to year? I do not know, 1 can only go by what 

 they tell me. 



11.235. They do not state -j.e< iiie.dly that that 

 applied to machinery? You will see at the bottom 

 of the form they are asked to state tho basis of the 

 \alnation, and in 148 oases they stated sj>ecifically 

 that the market value was the basis adopted without 

 any qualification. The moaning of that to me was 

 that that market value basis applied to the whole 

 of the inventory. 



ll,23i>. The meaning of it to me would be that, it 

 applied to the live stock and to the grain? It may 

 be so. 



ll.iir. I should even limit it iurtlier and say that 

 in tho case of sensible farmers that would not apply 

 to their working homes and what I call their plant :- 

 ibly not. 



11.238. You h.ive not really investigated that:- No, 

 except to this extent: To take horses, the average 

 value per head at the beginning of the year was 

 67 5s. 8d., and at the end of the year 60 13s. 2<1. 



11.239. Then you do know the number of horses? 

 In the great majority of cases, not in all. 



11.240. 1 think you will agree with me from your 

 experience that the average stock on a farm so far as 

 quantity is concerned is pretty constant in ordinary 

 pure farming?- I think that is so. 



11.241. Tho valuation may be difficult :- ^ 



I1.'J4'2. On the point of principle yon stated in 

 answer to one member of the Commission that in 

 your view the cost price was the proper figure to 

 put in the valuation of farm stock. If a farmer 

 buys a six months old bullock, say. in November, 

 is he to put down the cost price, of that as the 

 valuation at the following Michaelmas. 



Chairnuiii : Tho cost in a MM like that is the 

 original cost plus the cost of feeding up to the date 

 you make the valuation. It would remain then at 

 .rice. 



ll.L'l.'i. Mi-, Cmifliii: In a commercial industrial 

 business 1 should entiivU agree. here, you can esti- 

 mate exactly the manufacturing cost to a penny, that 

 the cost price <u- the market value, whichever is tho 

 lower, I should ;uld U a sound business proposition. 

 You would agree with that. I suppo-e: *> , 



11.24-1. Do you apply that to farming r Yes. 



ll,24-">. 1 am afraid you are, looking to n state of 

 perfection which your Coatings Committee may arrive 

 at in 20 years' time? That may be so. 



11. '240. That is really your view, that the farmer 

 in valuing his stock ought to take the cost price and 

 add on to it some estimate of that cost of feeding it 

 during the particular length of time ho has had it 

 that is up to the time of the balance sheet? V 

 think without any qualification cost is the basi- to 

 adopt. Whether the information as to the cost is in 

 the possession of any farmer or not is another matter. 



11.247. You see the difficulty of applying that test? 

 I do, quite. 



11.248. Let me apply it to the wheat in the stack. 

 Will you tell me ho\\ he is to arrive at the cost of the 

 wheat he has in his stack which has been growing, so 

 far as the wheat is concerned, during the last year, 

 and the land on which it was grown has been prepared 

 < ven the year before:- Yes. lie would take account 

 from time to time during hi.s financial year ol the 

 different items of cost of growing that wheat, and 

 when those items arc all put together that is his cost. 



11,24!). Supposing the crop has failed. Do you not 

 see where your valuation is going to lead you- to? 

 Is he to put that down as the value in that ease? 

 There is no value at all. is there? I agreed with you 

 a moment ago when you said the real value wa.s eo.st 

 Or 'market value, uhielie, >\ver. and he would 



probably adopt the market figure. 



I I. '_'")<. You qualify what you stated, and you now 

 agree with me? I always meant to say that it wa.s 

 < n.st or market value, whichever was lower. 



II .'-'.") 1. Would it not l* much .simpler when you 

 have got the market price, because your wheat ha.s 

 got to he- threshed, and it is going to be sold to- 

 morrow :- Very much simpler. 



Chairman: That is not in the witness's proof. You 



