MINUTES OF EVIDENCE. 



103 



24 September, 1919.] 



MR. JAMES WYLLIE. 



[Continued. 



age which takes place where manure is made under 

 these conditions. 



12.071. It is difficult to see how you did it because 

 in one case you say the wastage is at least 30 per 

 cent., and then you say Hall and Voelcker allow a 

 deduction of 50 per cent. ? No, a maximum of 50 per 

 cent. 



12.072. You have taken 30 per cent, and set it 

 against the increase in the manurial value: 1 Yes. 



12.073. Do you think this 30 per cent, loss is un- 

 avoidable ? I do think it is , unavoidable under 

 the conditions which have existed during this year 

 1918-19. 



12.074. It has been going on for a good many years 

 surely? Yes, it has. 



12.075. It was not unavoidable then? la cases 

 which I have known the manure tanks have not been 

 emptied during this last year for a very obvious 

 reason which I need not mention. 



12.076. Do you not think that this wastage of 30 

 per cent, is one of the items of mismanagement for 

 which the taxpayer has to pay when you have a sys- 

 tem of guaranteed prices based upon estimates of 

 costs like these ? Would you please keep in mind that 

 the wastage in liquid manure from a farm is a very 

 small item compared with the wastage of sewage in 

 towns. 



12.077. That has nothing to do with the point. 

 When you have manurial values, for instance, 

 amounting to nearly 2d. a gallon for milk, if there 

 were any considerable wastage there I mean if you 

 were going to increase that 50 per cent. Jd. a gallon 

 may mean a considerable profit to the farmer or it may 

 mean a considerable loss to the consumer because 

 a d. a gallon may turn the price Id. a quart? I 

 quite see your point, but as a practical farmer I am 

 very well aware of the difficulties of utilising the 

 liquid manure economically. It can be done in theory, 

 but it is altogether a different- thing in practice. 



12.078. Would you turn to Farm No. 1.* This 

 tractor account relates to this farm No. 1 for which 



' you have got the cost of growing roots and cereals, etc. 

 The tractor has been working on these crops for which 

 the costs are set out has it not? Yes, I presume so. 



12.079. You notice that for both years in the trac- 

 tor account you have interest charged at 30 ](5s. Od. 

 for the two years, and you notice that in your first 

 wheat account you have also charged interest at 5 per 

 cent. ? Yes. 



12.080. Do I understand rightly that you first 

 charge your interest on your tractor and find tho 

 cost of your tractor ploughing and set the cost of the 

 tractor ploughing against the wheat and then again 

 (barge interest on it? I should like to explain 

 exactly that point; it was raised yesterday. I wish 

 to say that I have done that quite deliberately. I am 

 well aware that it is quite wrong from a strictly 

 accounting point of view. I want to make that quite 

 clear, but it was done as a matter of convenience. I 

 considered it was necessary to charge interest on 

 capital. The next question was on what basis the 

 interest was to be charged. I considered it was neces- 

 sary in order to bring out fairly the cost of horse 

 labour compared with the cost of, say, machine labour 

 to include a charge for interest on horses. Then it 

 meant that I was charging a certain amount of 

 interest mi the fixed capital, horses and machinery, 

 and I had to charge a further sum which would bring 

 up the total charge for interest on the farm to about 

 ~> ]r cent, on tho total capital invested in the farm. 

 I can assure you if you take the method which I have 

 adopted of charging interest on horses and machinery 

 and then charge interest at 5 per cent, on about half 

 the outlay on tho different crops you will get a total 

 sum which will be approximately the same as 5 per 



t, reckoned on the total capital. 



12,081. You do not charge interest on half the 

 outlay, you charge it on the whole of the outlay in 

 this N .unt. Von charge 5 per cent, on 935, 



!<', l.~i> :- In that particular case that must be a 

 mistake. Of course I ought to explain that this 

 particular -lateim nt is really the fanner's own state- 

 ment. I have taken this statement pretty much as it 

 came from the farmer. 



* >'/< Appendix IV. 



SMS] 



12.082. Chairman: The farmer is coming here to 

 give evidence is he not? Yes. 



Chairman : So that you will be able to cross-examine 

 the farmer himself on that point. 



12.083. Mr. Ashby: The same principle runs 

 through the whole of the accounts. Do I understand 

 that you not only pursue this principle of charging 

 interest to the capital and then charge it again to 

 the outlay, not only in the case of this tractor 

 account but also in the case of the horses all through? 

 Not all through. I should say that has been the 

 principle adopted in most cases. In other cases you 

 will find that no charge for interest has been made 

 on horses or on machinery, but 5 per cent, on the 

 estimated capital per aero has been charged through- 

 out the accounts. My whole object in this connec- 

 tion has been somehow or other to get 5 per cent, on 

 the total capital thrown against the various products. 



12.084. Have you taken any steps to find out what 

 amount of cash capital apart from the fixed capital 

 these farmers have ? Yes, we have a mass of informa- 

 tion on that point. 



12.085. What is the relation of the two amounts? 

 It has not been tabulated so far. 



12.086. So that you are really guessing at what 

 charge ought to be ma4e for interest on outlay after 

 you have made your charge for interest on fixed 

 capital? In most of these particular cases we had 

 that information before us we had valuations 

 before us. 



12.087. Did the valuations show the amount of cash 

 capital? Yes, the valuations plus an allowance for 

 floating capital. 



12.088. What allowance? The allowance which the 

 farmer would consider necessary. 



12.089. Not what he had, but what he considered 

 necessary? -He has had according to his account*. 



12.090. Why did you not charge on what he has and 

 not make an allowance for it? I have no doubt I 

 did charge on what he had. 



12.091. You said just now that you charged on an 

 allowance? In some cases it may have been neces- 

 sary to do that. 



12.092. On the whole it is rather a method of piling 

 up interest, is it not? No, I do not think it piles 

 up interest at all I am quite sure it does not. 



12.093. Would you look at this tractor account 

 again for a moment. The tractor with the plough and 

 the cultivator and so on cost 352 9s.?: Yes. 



12.094. It is worked for two years and you hav 

 written off 85 13s. for depreciation? Yes. 



12.095. Have you any idea what the life of that 

 tractor would be? If you look at a note by tho 

 farmer under the second account you will find he 

 says " If I was starting my machinery accounts now, 

 after experience, I should depreciate at least 33|rd 

 per cent, per annum." I take it that indicates a 

 life of three years in this farmer's opinion roughly. 



12.096. When he has spent practically 96 on re- 

 pairs, do you think that is justified? That is the 

 farmer's opinion ; that is not my opinion. 



12.097. Have you any idea as a costings expert of 

 what is a fair depreciation to put on a tractor? I 

 have not seen sufficient data to enable me to form any 

 useful opii'ion as regards that. I have known of cases 

 where the depreciation of 50 per cent, would- not be 

 too high, but I would not like to put that forward as 

 anything like an average figure. 



12.098. Below " Costs of cleaning foul land " there 

 is this statement: "The above expenses clean the 

 land, but it has still to be enriched." Do you agree 

 with that statement. It is there on your respon- 

 sibility, more or less? I agree with it. 



12.099. What makes you think that the land has 

 still to be enriched? There has been nothing put iuti 

 it as far as I can see. 



12.100. Just let us run through this list ; it is rather 

 interesting. In wheat No. 1 you have dung on part 

 and artificial manure on part. We will leave the 

 artificial manure out. I assume that is sulphate of 

 ammonia. You have dung or artificial manure in 

 the case of every one of these crops of wheat. Taking 

 your roots, you have got superphosphate on each of 

 them. In the crops following sheep you have not got 

 any superphosphate on or anything. Then turning 

 over to the next page you have roots with dung and 



G 4 



