MINUTES OF EVIDENCE. 



51 



12 August, 1919.] 



MR. H. G. HOWELL, F.C.A. 



[Continued. 



you set out a number of items. Then you say : ' ' In- 

 terest, including interest on capital." What is meant 

 by that phrase? It means you might, if you had 

 two accounts put to you, in ono case have interest 

 on capital charged up as an expense, and in the 

 other case you might not have it so charged. It is 

 so entirely a matter of personal opinion whether it 

 is or is not charged. You would want to make 

 sure, in comparing those two accounts that in either 

 case it was the same charge or omission of charge. 



1154. That was not exactly my point. What other 

 interest would there be but interest on capital in 

 the costs? There might be interest on loan. I 

 meant the farmer's own capital when I said that. 



1155. I follow. Then there is an item of deprecia- 

 tion you mentioned. Have you any suggestion to 

 make as to what is a fair deduction for depreciation, 

 ay, for farming machinery, for example? Only in 

 the very roughest way that would be of no value for 

 any particular purpose. That is part of the in- 

 formation that should be brought out by our investi- 

 gations, the actual experience as regards th necessary 

 depreciation. 



1156-7. I paid 395 for a tractor last year and sold 

 it by auction for 50. Should that difference be 

 written off? 



Chairman: I do not know that that is quite a 

 question which Mr. Howell could answer. 



Afr. Rabbins: I do not press it. 



1158. Then at the end of your pricli you mention 

 under " Cost Accounts " that food consumed should 

 be reckoned in the cost account. What basis do you 

 favour for the assessment of the value of the food 

 consumed at cost or market value? You are speak- 

 ing of food produced on the farms, no doubt? 



1159. That is so? That 'is a somewhat difficult 

 question to answer. Strictly and in principle there 

 is no doubt, in my mind, that it should be the cost 

 of produrtion ; but shall I say from the point of view 

 of the intention of the farmer in keeping his accounts 

 that absolute jxiint of view might not ;'.J>ply. I say 

 that strictly, and on a point of principle, it .should be 

 cost of production: lint there are qualification! whirh 

 in given circumstances one might wish to put into 

 that. 



1160. Do you include interest on capital as a cosrt 

 of production? There again, if one may speak, I 

 would not say in a pedantic way, but from a strict 

 principle point of view, interest on capital 'is not part 

 of the cost. It is part of the profit. 



1161. Kven if a farmer is trading with borrowed 

 capital?- Tw. 



1162. You would not then put it to part of the 

 cost? No. 



1163. Would you include fanner's remuneration as 

 manager a-s part of the cost? I think not. You 

 should .strike a balance before having charged any- 

 thing for the farmer's remuneration in order that 

 you may sec what balance remained lK>th for interest 

 on capital and for his own remuneration for work 

 on the farm, etc. 



II' 1. In a large holding such as Sir Daniel Hall 

 lias told us he, favours, would you include the re- 

 muneration of departmental fore-men? If they were 

 whole-time and salaried men, yes. 



!!(>.">. Mr. I'tirkir: You say in your evidence in 

 chief that the statistical data will assist in the 

 formulation of a national agi icultiiral policy. You 

 moan, of course, tlie data obtained from actual re- 

 sult.s. I think you have told us that: that you could 

 no* give any information this year, but would have 

 to wait until after September next year for actual 

 results? Yes. 



1166. When you have obtained the actual co,ts on 

 your costs account, do you think with that evidence 

 before you any general average of cost obtained 

 from these statistical data will give a basis reliable 

 enough for legislation, seeing that there arc so many 

 initial difference-;, for instan^, in the fertility of the 

 soil where county differs from county and district 

 from district ami farm from farm, and even field from 



25125 



field ; and how do you propose to get over those 

 figures? That is a difficulty; and when this informa- 

 tion is first got out, say, after its first year, it would 

 not have anything like the value that it will possess 

 when it has been compiled for a certain term of 

 years. 



1167. Then for some time to come the statistical 

 information from the costing accounts will not be 

 very reliable? It will be reliable as reflecting the 

 results of the year which may have been dealt with. 



1168. Of a particular farm? Yes. It will show you 

 the actual results on a given farm ; or again, if the 

 farms in that district be averaged, out, it will give 

 you the average resulting cost in that particular 

 district. You will undoubtedly get wide variations, 

 as you say, not only from district to district, but 

 from farm to farm within that district. 



1169. Will that not make any general assumption 

 wrong and the basis wrong, seeing that farms will 

 differ and fields will differ? Is it not a very difficult 

 problem? I do not think it will necessarily make any 

 assumption wrong. It will at any rate put those 

 who have to make such decisions in a better j>osition 

 to know what are the facts than they are in at 

 present. 



1170. It will be good for the individual farmer. 

 He will be able to draw inferences from the data; 

 but will it be reliable as a basis for legislation? That 

 is the point I was asking? It will want careful con- 

 sideration from that point of view ; but it will give 

 the broad general guiding statistics that will be re- 

 quired for that purpose, I think. 



1171. There are other difficulties too. There is the 

 difference which arises of the holdings, the cost of 

 production on the smaller holding being certainly 

 greater than the cost of production on the largo 

 holdings. Will that difficulty be able to be sur- 

 mounted in a general average? I am not sure but 

 what you are asking me to answer something which 

 is somewhat outside my province, if I may put it 

 in that way. 



1172. I am sorry; but it seems to me important ? 

 Perhaps I am wrong in saying so; but are you not 

 suggesting what may follow from the consideration of 

 the statistics which the Costings Committee may get 

 together? Our only duty is to compile these costings 

 records. 



1173. I am really trying to obtain from you 

 information which will help us in coming to a con- 

 clusion to-day with regard to the costs of production 

 on what evidence we may have before us, and it seems 



. to me the initial differences are so great that it is 

 very hard to arrive at. There are all sorts of initial 

 differences. There is the accessibility of one farm 

 to a station, for instance. 



Mr. Asltby: Might I suggest, Sir, that Mr. Howell 

 is here as a representative of this Committee, 

 and he cannot bind his Committee by any statement, 

 but as a professional accountant he might also be 

 speaking sometimes in his personal capacity. He 

 might speak in a dual capacity as representative 

 of the Committee, and sometimes in his personal 

 capacity as a man who has given some study to this 

 matter. I think we all ought to realise there are 

 some- questions of policy, even in account ing. which 

 will be cVcided and slettlcd on tho collective responsi- 

 bility of his Committee, and not on Mr. Howell's 

 opinion. 



Chairmun: My view is that the questions to Mr. 

 Howell should be addressed to him as a Director of 

 the Costings Committee, and only such information 

 as he has in that capacity should be obtained from 

 him. One /of the questions which might not have 

 been put to him was put some time ago, as to the 

 difference between 50 and l.'WO which was given 

 for a tractor. That is a mere matter of opinion, on 

 which the opinion of Mr. Howell might be very useful, 

 but would in no way be binding on the Costings Com- 

 mittee which he represents. Subject to what other 

 members of the Commission might feel. 1 should very 

 mm h'Mike that questions addressed to Mr. Howell 

 should be questions which he could answer solely in 

 his* capacity as Director of the Costings Committee. 



D3 ' 



