MINUTES OF EVIDENCE. 



135 



19 August, 1919.] 



SIR THOMAS H. MIDDLETON, K.B.E., C.B. 



[Continued. 



3302. Getting back to the question of the effect of 

 larger wages on the acquistion of small holdings I take 

 it that the small holder can only be really successful if 

 he has got family labour:' A limited amount of 

 family labour. 



3303. If he has to go into the market and engage his 

 labour on ordiaary market conditions it is not such 

 a paying proposition? It then becomes very difficult. 



3304. In the days when there was a demand for 

 small holdings was it not the case that the small 

 holder was very largely dependent upon his own 

 family for labour!' That is so. 



3305. The option to the families then was eitlier to 

 work a.t home on their own farm or take employment 

 on other farms at low wages:' At the current rate of 

 wages. 



3306. Which were low wages? Yes. 



3307. Do you think it very likely that the sons and 

 daughters of the small holder would be willing now to 

 work the longer hours which are usual on the small 

 holdings and refrain from the opportunity of earn- 

 ing higher wages with shorter hours when there is a 

 demand for their labour in a better capacity else- 

 where? I think that the larger number of the sons 

 and the daughters of small holders would always go 

 away to service; one or two would probably remain 

 at home. 



3308. Do you think they would be likely to remain 

 at home as they did in the old days? That is a very 

 difficult question to answer perhaps not for the next 

 year or two. 



3309. What lias been the tendency apart altogether 

 from ideas of what may happen in the future? Have 

 you any knowledge of what has been the position of 

 the members of small holders' families as to where 

 they have been in the habit of leaving the small hold- 

 ings in greater numbers than they did in the past? 

 I think I have answered that question already. I 

 said that 1 had not any personal knowledge of the 

 conditions prevailing on small holdings. 



3310. With regard to the psychological effect of a 

 guaranteed price upon the farmer, does your De- 

 partment make any effort to keep farmers "informed 

 as to the likely course of world prices? Yes. in 

 addition to the issue of the existing market price*, 

 we are constantly putting notes into leaflets and into 

 the Journal indicating what the prospects are for 

 certain commodities. It is done in quite a rcgulaY 

 way. 



'1311. Do you think that an organised effort to pro- 

 vide bettor information on points of this kind would 

 have as great a psychological effect as a guaranteed 

 price of 60s. a quarter of wheat which you never 



anticipate the community will have to pay? I could 



not answer that question. I think that both are 

 desirable. If you ask me which would have the 

 greater effect I can only tell you I cannot say. 



3312. Do you think, from the point of view of the 

 industry, it is more advisable that those* engaged in 

 it should be looking abroad and looking around them 

 with a view to finding out what is the w r orld position 

 in connection with their industry rather than relying 

 upon the taxpayer for a guarantee? Which is tli 



more likely to produce efficiency in the farmer? 



What seems to me to lie below your idea is this, that 

 tli.' mere fact that there is a guarantee will reduce 

 effort on the part of the farmer. I do not think that 

 is likely ; I think he will regard the guarantee as a 

 Government estimate of a sum below which prices, are 

 not likely to full. I do not think that he expects, as 

 a rule, to draw the guaranteed price. 



:v.il:t. That price, in your view, ought to be sufficient 

 not merely to cover the cost of production, but to 

 cover a return on his capital and the payment of wages 

 to the farmer himself in other words, to leave him 

 with a margin of profit? I ought again to point out 

 that when I made this estimate it does not attempt to 

 ! an average for all the wheat growing land of this 

 country. It is confessedly an estimate which applies 

 to rather good wheat growing land. What one would 

 have to do would bo to attempt an estimate with re- 

 gard t<i land Mliirh i> on the margin of wheat cultiva- 

 tion which would probably show a yield of some-thing 

 like 32 or 30 bushels an acre for a similar expenditure 

 to what I have got here. So that I do not want you 



to think that the 60s. is necessarily based upon this 

 particular estimaie. 



3314. If you take a return of 30 to 3'2 bushels with 

 the cost of production you have got here, including a 

 return on capital and a sum for wages to the farmer 

 and a guaranteed price of 60s., it would mean that 

 even getting near the margin of cultivation you cover 

 more than the actual cost of production? I do not 

 think so. "If you take off the interest allowed 6s. 10d., 

 farmers' wages 10s. that is 16s. lOd. your reduction 

 would still mean a loss. 



3315. I understood you to say you had allowed for 

 the implements, and so on? Yes. 



3316. That it was all spread over your figures? Yes, 

 it is spread over these figures here. The allowance 

 except in the case of horses is about 15s. for interest, 

 lu the case of the horse it would make a very small 

 reduction only about 3 out of about 49. It would 

 reduce the cost of horse labour, if you remove the in- 

 terest, by about 6 per cent., and the other it would 

 reduce by 16s. It would bring the cost of growing 

 32 bushels to very nearly the same amount as the 

 estimated figure here. 



3317. It would bring it to about 59s. ? Yes. 



3318. You propose to guarantee him a price of 60s. ? 

 What I say is that a price of 60s. which is a 

 guarantee that, in my view, would be reasonable 

 would have the effect of producing the increased 

 acreage I have set out here, 400,000 to 700,000 acres 

 of wheat. 



3319. This guarantee, which would more than cover 

 his cost of production, would leave the farmer who 

 was farming on more favourable lines than others with 

 a larger surplus? Yes, but you cannot avoid that. 



3320. So that they are guaranteed not only against 

 loss but are guaranteed a certain amount of profit? 

 Yes. 



3321. And in a good year they are allowed to take 

 all the profit? Yes. 



3322. Along with that you propose no compulsion 

 you propose that the State should simply guarantee 

 the farmer without requiring anything in return from 

 him? The assumption is that the State secures this 

 extra area of tillage, and if experience shows that 

 there is no extra area then, of course, the guarantee 

 will drop. 



3323. You propose to embark upon a policy which 

 guarantees a price giving a fair proportion of profit 

 to the producer, and at the same time the State 

 getting nothing in return? It has no power with 

 regard to the individual producer. 



3324. The State has no power to enforce the pro- 

 duction of the additional area? No, it has no power 

 to enforce, but it might be considered desirable to 

 take power, seeing that the object is increased tillage. 



3325. I understood that you did not contemplate 

 securing any power to enforce? No, I did not. 



3326. If such a guarantee were given over a certain 

 number of years, and it had not the effect of increas- 

 ing the amount of production, could you withdraw 

 that guarantee from the farmers who were producing, 

 simply because others had not been stimulated by the 

 guarantee to any extra production? Yes, I think 

 you could.* 



3327. You could in fairness say to the men who had 

 done their duty, " We are not going to withdraw the 

 guarantee from you because some of your fellows have 

 not done their duty "? You could say, ." We are not 

 getting what we anticipated from this guarantee, and 

 therefore we do not propose to continue the policy." 



3328. Do you think that politically any party would 

 be prepared to stand up to sfuch a policy? I am afraid 

 I cannot answer that question. 



3329. Mr. Dallas : With reference to the guarantees 

 and to the psychological effect they would have, you 

 also stated that in your opinion the existing high 

 prices would continue for some years? Yes, that is 

 my opinion. 



* The witness misunderstood that question to which 

 he states that ho would have replied " Certainly not. 

 But at the expiration of the period the policy of 

 guaranteeing prices could be reconsidered and aban- 

 doned if that seemed desirable." 



