46 



ROYAL COMMISSION ON AGRICULTURE. 



i:. (*/.,W, 1919.] MESSRS .IM:.. M. NIO.I., STBWART, DAVIDSON, M- l.u:i I. 





14,751. In regard to tlio question of farmers buying 

 their fanns nnil other laimcis U-ing willing in buy 

 farm* fnun outgoing tenants when they go out is there 

 not another reason in addition to the one you haxc 

 given sentiment ? Is there not the fact that the out- 

 going tenant leaves a considerable amount in the 

 land ? Yes. 



14.7.M.'. 1> it not the cae if an ouUide farmer 

 to buy he wants to get the U-ncfit of what the out- 

 going man has not had time to tuke out? Yea. 



1 1 753. Is that not one of the principal reasons for 

 Ix-ing higher tluiii what would be estimated as 

 the economic value of tli- land' Yea, that is the 

 main reason probahU 



14.754. I should like to ask Mr. Allison a question. 

 Has this balance sheet which is produced been used 

 for the purpose of satisfying tin- Inland Revenue Unit 

 the income tax on that particular farm should U- 

 charged at less than double the rent :- --(Mr. Allison) : 

 Ye.. 



1 1.755. And it has been accepted by them? It has. 



14.756. Although that profit for 1918 shown there 

 ia not equal to one year's rent, from your knowledge 

 of similar farmers and their accounts do you know 

 that there are others that are probably better? Yes, 

 I am sure there are several better than that. 



1 1.757. This particular balance sheet refers to a 

 farm of what acreage? A little over 500. 



14. 75". What kind of farm is it? Purely arable. 



11.759. It is a farm where everything is sold off? 

 It is a farm where everything is sold off, excepting 

 what is fed to the farm horses. 



14.760. No cattle are kept? No. 



14.761. The straw is sold? Yes. 



1 1.762. The manures and dung are purchased I- 

 Ye-. 



14.763. It is a well managed farm? The Commission 

 can judge of that by the results of the trading. It 

 is considered one of the best managed farms. 



14.764. There is nothing in regard to the manage- 

 ment that you can give as a reason for tho profit being 

 leas than single rent? No, nothing. 



14.765. Looking at the cost of production of tho 

 various crops that you have put in, taken generally 

 if you were to eliminate the highest in each of the 

 statements would the result be that the guaranteed 

 prices for tho 1918.crops and the actual prices received 

 would practically in every case show a profit? Yes. 



14.766. So that there has been a profit made in 

 Scotland? That is, I think, admitted on these figures. 

 We know some of them are high, but there are prob- 

 ably special reasons which made them high, and if 

 time had permitted we could have enquired into it 



14.767. I think you have already said that you 

 have reconciled the cost with tho trading account 

 as far as you possibly could in this particular in- 

 stance? In this particular instance, I think, as an 

 accountant, it is completely reconciled ; it would 

 satisfy any commercial house. 



1 1.768. In view of that is it your considered opinion 

 that these remaining costs where you do not have 

 balance sheets to reconcile them are reasonable and 

 fairly accurate? Yes. My purpose first of all was 

 to secure costs, and having obtained them I felt that 

 I required to prove if thoy wore reasonable and the 

 only wav I could prove it was to obtain accounts 

 where the information was detailed enough to find 

 the cost of production, and I found that tho cost 

 came very close to the figures shown in tlie estimated 

 cost. 



14,709. One other question of Mr Stewart. I think 

 it wan mentioned that in the case of sales of second- 

 hand implements they W.-P.- \cry dear and, therefore, 

 there should l>c verv little or no depreciation. IK it 

 not the case that they are dear because there are no 

 new implement* available? I.Mr. Sliii-<irl\ : Yes. you 

 Cannot get tho new implements without waiting for a 

 considerable time. 



1 1.77<). Taking anything, for instance, that you 

 make at home, mirh as corn (arts, and any other 

 carlo, I suppose it in too lat- to order them if you 

 want to get them for the pur|ioH<> of the current 

 , rp? -Yes. As a matter of fa-t I ordered now imple- 

 ments for this year in plenty of time to reap the 

 crop, hut they could not be delivered in time. 



11.771. That is the reason for the price of sccond- 

 li.uul implements being so high? 



14.77-. Mr. <><> mum : .Mr. Allison, if you will turn 

 again to the balance -\i< ->-i which Mr. liatchclor ha- 

 lunched iipiin. \ hat do you put tho capital value at 

 in these ac< omits n-,.,! in the working of this farm'- 



(Mi: .-I//M..H): 10.o:t7. 



I 1,77.1. 998 10s. 2d. is the net profit on which he 

 paid income tax? That is not the sum on which 

 he paid income tax ; that is the sum which he used as 

 the basis. 



14.774. Does any increase in these valuations of 

 live and dead stock go towards the profit? That is 

 rather difficult to an.su ci because any profit is re- 

 flected partly hy the < ash i vei\cd in excess of what 

 is paid out and partly by tlie increase in the value of 

 his trading assets at the end. 



14.775. That is just what I want to get at. Is 

 this profit arrived at by an increase in his valuation 

 and not by his real profit? That is his real profit. 

 If one were to take his income and his expenditure 

 one could not say that he had reflected his real 

 profit or his real loss. It is absolutely necessary to 

 take in the beginning and closing valuations. We 

 have the commencing valuations in this account and 

 any benefit obtained in the sales will be reflected by 

 the sales on the credit side, aa will be seen in the 

 trading account. 



14.776. Were the valuations taken on the same 

 basis? Yes, on the cost of production of the crop as 

 closely as it could be ascertained. 



14.777. The costings at the end which are taken 

 from these accounts I take it are as near as you can 

 possibly get them. When you take the over-costs 

 it amounts to as near as you can possibly get them? 

 Yes, and from iny ^xperience it would satisfy most 

 engineering firms if you could cost as closely as that. 



14.778. I quite agree. On your actual costings 

 sheet at the end you will notice that the cost per 

 quarter of oats is 3 Os. lid., I think? Yes. 



14.779. And the cost of wheat 4 Is. 2d.? Yes. 



14.780. It ia very much higher than tlie estimated 

 costs which you put in on the other sheets, and these 

 are actual costings taken from a balance sheet where- 

 as the others are estimated? It is admitted that the 

 oat crop on that farm that year is low, but if the 

 crop had been an average one it would be 2 9s. Id. 

 in place of 3 Os. lid. You will see that in paragraph 

 14 of the precis. We admit there that the cost is 

 higher than it ought to have been; the crop was not 

 the success it should have been. 



14.781. Then as regards the wheat? The wheat 

 shows a cost of 4 Is. 2d. as against tho highest cost 

 of 4 4s. 4d. and the lowest cost we show of 2 Is. 7d., 

 but of course the conditions may not have been the 

 same. 



14,782* That is the difficulty in getting at these 

 costs- the variations in the conditions? Yes. 



14783. Havo you any other accounts kept on a 

 similar basis to these that you can produce? There 

 .ire none. 



14,784. This is the only case you have of a balance 

 sheet? Yes. There arc accounts which are satis 

 factory to tho farmers themselves, but there is con- 

 siderable difficulty in finding out what the items really 

 cover. It would be necessary to eliminate the capita! 

 expenditure and show a purv trading profit. To do 

 that taken time and if tho Commission wish it to be 

 done I believe tlie Union would be willing to make up 

 figures on the basis of other balance sheets which we 

 know can be obtained, but in the time available 

 we really could not do it. 



1 1.7H5. I think it would bo extremely useful if we 

 had other accounts on the same lines as these. Kvery 

 one is always asking for accounts and balance sheets, 

 and those seem to have boon most accurately prepared 

 and very well put forward, and if you could help 

 us in that way I am sun' the Commission would be 

 very glad to have figures? T cannot speak for the 

 Union, but I think the Union would be prepared to 

 go to that trouble on behalf of the Commission. 



11.786. Chairman : If you will he kind enough to 

 bring that before the Union? Yes. 



11.7-7. Mr. lt"< : All these costs of yours, Mr 



Allison, relate to the 1918 crops P Yes. 



