3 —A. 48.

A—4b.

The Chairman.] Are these what you might call lighterage charges : I mean transportation from shore to ship ?—No, Your Honour, from the station to Apia. What has freight got to do with it ? —That is a charge credited to the boat. Mr. Baxter.] What is the nature of the boats ? —Mostly small boats, carrying from sto 15 tons. Run on oil from the outlying stations to here ? —Yes. You charge 12s. 6d. per I,ooolb. for copra bought in A districts. In other districts the freight is higher proportionately to the distance to be travelled. You were going to account for those freights ? —I can account for them in this way The Chairman: That is a fair and reasonable charge in connection with your expenditure. You need not go into details. It would require expert knowledge to test the figures, Mr. Brady. Mr. Baxter.] Do you know what charges the New Zealand Reparation Estates make for their boats ?—lf we hire them they charge the same rate of freight that we allow for our own boats. These are the charges to Apia ?—Yes. And that is the total cost per ton ? —Yes. What profit do you make in Apia ? What market selling-price do you take for this ? —I take the latest telegraph price, £26 2s. 6d. c.i.f. London. What profit does that show you on a ton of copra on the sale price mentioned and the purchase price given to the Natives ?—The profit is according to the amount paid originally. As far as A district is concerned, the profit allowed, with a shrinkage of 10 per cent., is £1 18s. 2s. That, I may say, is not taking into consideration the rent for extra copra-sheds ; the tax on extra copra-sheds ; coprabuyers' licenses ; commission paid to extra copra-buyers (4s. 6d. per ton in some cases) ; proportion of traders' wages, which are £10 per month ; interest on capital value of station properties, sheds, plant, and utensils ; cost of station boats and lighters, and the maintenance of same ; tax on boats, which is £1 and 10s., according to the size ; the proportion of the station insurance at £1 10s. per cent. ; interest on the capital outlay on the properties and copra-sheds in Apia, together with the insurance of them ; the interest on the money expended on the purchase of copra The Chairman.'] Surely, as a trader, you cannot suggest that this affects your profit. I understand you to say that a trader in order to determine whether his profit is a reasonable one or not ought to take into consideration the interest upon capital expenditure. It would be a paradise for traders if that were possible in any part of the world ? —We have to provide the money. You have to provide the capital, and you are recuperated by the profits you earn on your profit and loss account each year. You do not debit your profit and loss account with the interest on that capital. The Income-tax officer would not allow you, would he ? —We might have to pay interest to the bank. Of course you have. No one has yet managed to borrow money without paying interest on it ?- A portion of Apia office supervision and the proportion of our head-office supervision entailed in selling the copra. At London or Sydney ? —At Sydney. What has Sydney got to do with it: you ship to London ? —Our head office has to determine the sale and arrange their charters. And so you charge a proportion of the Sydney head-office expenses ? —Yes. Mr. Baxter.] Leaving out all these items mentioned, give us the highest and the lowest profit.— On C district, on a 10-per-cent. shrinkage, the profit would be £5 Bs. 4d. per ton ; within the Apia boundary the profit would be £1 13s. 3d. per ton. The profits are all shown, and the percentage of profit too ?■ —Yes. Do you know what was your average profit per ton for the year 1925 when you struck your balance ? —£2 4s. per ton. And for 1926 ?- In 1926 4s. per ton. You have not struck your balance for 1927 yet ? —No. What is the price at present ? —£26 2s. 6d. Do you remember what prices were received compared with prices in London given for Tongan and Fijian copra ?—Samoan copra is usually a little higher—approximately 55.; but in some cases we have received much less for our Samoan copra than has been realized for Fijian and Tongan copra. Can you give us any examples ? The Chairman : What is the value of that ? You can only say on the average what the difference in value is. You cannot take an isolated case. Mr. Baxter: Yes, sir, but what I want is some actual example to show that there is not such a big difference paid on Samoan copra and Tongan and Fijian copra. The Chairman : And how will that help us ? Mr. Baxter: It is considered that Samoan copra is very much better than Fijian and Tongan, and I think it is, but we do not get the benefit. The small difference will not justify the merchants in naying a higher price. I just want to show that the price advanced by the New Zealand Reparation Estates cannot be paid by the merchants. Judge MacCormick: How can comparisons help us in that ? Mr. Brady says that Samoan copra is better, taken all round. We cannot deal with isolated cases. Mr. Baxter: I would not call them isolated. The Chairman.'] What is the general rule ? Which realizes the better price—Samoan, Fijian, or Tongan ? —Samoan is the better. Could we not leave it at that ? —I think that the question of supply and demand comes into it. The Chairman : The parity of price is determined by the London price. What we have got to determine is the relation between the advance made by the Government and the price received in London after taking away expenses. I think that it is better to leave it alone.

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