MINUTES 'OF EVIDENCE. 



89 



29 October, 1919.] 



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



[Continued. 



16.086. Because of the fact that a proper system 

 of farming would be for the next few years to put 

 back those reserves into the land? That is so. 



16.087. So that to that extent the profits shown for 

 the past few years would be inflated? Yes. 



16.088. And you would expect that for the coming 

 few years the reverse would he the position? If 

 they in that period built up the fertility again, yes. 



16.089. To put back the land into the condition in 

 which it was, say, in 1914? Yes. 



16.090. In general is there anything to show from 

 the accounts placed before you that farming has 

 not been a profitable concern for the past four or 

 five years? I do not think I have evidence as to 

 that. 



16.091. On the figures produced to you would you 

 consider that the farmer had only been getting 

 a reasonable return on the capital invested from 

 the profits that are shown in the accounts? Are you 

 speaking of the particular year covered by these 

 accounts? 



16.092. Yes? It depends somewhat upon what 

 one's personal view of a reasonable return is. 



16.093. Taking a- business which is subject to all 

 the risks and fluctuations of markets, such as the 

 farming business is, would you consider that the 

 profits realised in farming are more than reasonable? 

 All over I notice they work out at 11 per cent, on 

 the capital taking all the accounts combined. 



16.094. Would you not expect in any ordinary com- 

 mercial business a figure of at least 11 per cent. ? 

 Yes, I think so, and as far as I can gather this does 

 not seem an unreasonable remuneration for the 

 capital and the services of the occupiers. 



16.095. That 11 per cent, includes the interest on 

 capital, management, and profit? That is so, and 

 for the most part any labour contributed by the 

 family and the services of the occupiers. 



16.096. Is there anything in the papers which have 

 been put before you to show why the profits on the 

 Scottish farms are higher than on the English ? 

 No; I have tried to investigate that myself. From 

 tho accounts only, it is rather a difficult matter, and 

 I have not been able to get out anything at all 

 definite with regard to that. 



16.097. Is there anything to show that the equip- 

 ment and buildings on the Scottish farms are better 

 than on the Knglish farms? I have no information 

 as to that. 



16.098. Is there anything to show that the land 

 gets more put into it in the way of manures in 

 Scotland compared with England? No, I have not 

 tested that; I do not think 1 could do it if I wunte I 

 to. 



16.099. There is nothing shown from the ex- 

 ponditure of manures which would bring to your 

 attention the fact that probably in Scotland the 

 land had bn-n better. manured? No, I do not think 

 so for one thing the expenditure on manures would 

 be for the artificials only ; you would have no informa- 

 tion as to the natural manures. 



10.100. In regard to the home farms do you know 

 wli'-thor these were ran as commercial concerns or 

 simply as adjuncts to the residences of the proprie- 

 tors? They soom to bo split up; some apparently are 

 run as <*immrcial concerns. 



16.101. Where they are run as commercial concerns 

 do thoy compare- favourably with the tenant farmers' 



nits? Even then the returns generally are not 

 so good as tenant farmers' accounts. 



16.102. Has anything been placed l>efore you which 

 enables you to express any opinion as to why that 

 is? No; I have no specific evidence with regard to 

 that so far as I know. 



lfi.103. Might it not be that in the case of home 

 farms every item of expenditure, labour and other- 

 wise, is accounted -for, whereas in the case of an 

 ordinary tenant farm some of these items are either 

 intentionally or inadvertently omitted? Ncr, I do 

 not think that would account for it. 



16,104. Might it amount for a part of it?- T do not 

 IM bow even a tenant farmer could omit expenditure 

 of that kind unless he at the same time omitted 

 equivalent receipts. 



16.105. What I refer to is the fact that he may 

 have omitted it because he did the work himself IH 

 some instances? I see what you mean yes, that 

 might be the case. 



10.106. In practically every instance of a home farm 

 there would be no labour of any kind done by the 

 proprietor? I have no evidence as to that. 



16.107. Whereas in the case of tenant farmers there 

 would be a considerable proportion of the farmer's 

 own labour? That would be very likely, yes. 



16.108. Do you know if in a considerable number 

 of the accounts placed before you these accounts 

 were also used in regard to satisfying surveyors of 

 income tax with regard to profits? I would not say 

 a considerable number, but quite a number were so 

 used. 



16.109. Of course that would be in cases where they 

 showed less than double rent? Possibly, yes. 



16.110. Taken all over, what is the average in 

 England with regard to whether they are over or 

 under double rent in the case of profit? You have a 

 Table showing that? Yes. The general result is that 

 the profits are not equal to double rent if I remember 

 rightly in England. 



16.111. In Scotland I think they are. I think your 

 Interim Report is to that effect? Yes, in Scotland 

 they are more than double the rent. 



16.112. In England they are under it? Yes. 



16.113. You make the remark that a general perusal 

 of the accounts submitted to you indicates that the 

 industry is capable of improvement? Yes. 



16.114. There is no doubt in regard to that? No 

 doubt. 



16.115. Are the accounts themselves made up at 

 any period of the year? Yes, practically at all 

 periods of the year. 



16.116. Some of these accounts must entail con- 

 siderable valuations whilst others entail very little? 

 Yes. 



16.117. In Scotland, for instance, if you were to 

 take the balance sheets and accounts made up, say, 

 at the end of August you would have the whole crop 

 of the previous year in cash previous to that date? 

 Yes. 



16.118. And you would have no crop of that parti- 

 cular year anywhere except in the fields? Yes. 



16.119. So that in that case the valuation could be 

 conducted on an acreage basis which would fluctuate 

 much less than taking an assumed yield? Quite 

 likely" 



16.120. I see you have a considerable number of 

 accounts ending in October and November and 

 December, and March and April, and May? Yes. 



16.121. Practically every month of the year? 

 Yes. 



16.122. In manv of these instances the valuations 

 would show part of the old crop and part of the new 

 crop in hand ? Yes, that is so. 



16.123. Do you know if these valuations were made 

 in any very accurate manner or were they done in 

 a rough and ready fashion ? I know that out of the 

 total of 400 accounts which we were able to tabulate, 

 in 150 cases the valuations were made by licensed 

 valuers and in 250 cases they were not. 



16.124. Could you tell me offhand whether in the 

 cases where the accounts were clone by licensed 

 valuers as compared with those that were not the 

 results varied to any great extent whether in 

 general one set of accounts showed a higher or a 

 lower profit? I would not like to say as to that. 



16.125. Mr. Ashby : Following the last question of 

 Mr. Batchelor as to how many of the accounts showed 

 valuations by licensed valuers, have you any idea 

 how the figures that are shown in paragraph 2 were 

 arrived at how many of the valuers valued at 

 market value? Practically all of them, I think, 

 valued at market value. 



16.126. You said 160 accounts showed valuations by 

 licensed valuers? Yes. 



16.127. Is that somewhat comparable to the first 

 item in this paragraph where you have 148 on the 

 basis of market value? To a large extent that would 

 be so, I think. 



