A.—4b.

Judge MacOormick.] It is sampled, I suppose ? —-In some cases. If the buyers are not satisfied with the quality they will make an analysis of it. We often have to pay out on arbitration for Samoan copra if it is not up to the quality it is reputed to be. These advances made by the Government are not against kiln-dried copra, I understand. They buy Native copra and give it special treatment ? —The Natives a special preparation. That is an important point. If the Government are making these advances against ordinary Native copra and treating it themselves, there is nothing to prevent you from treating it yourselves ? — It has been pointed out that the difference between the present grade of Native copra and the firstclass copra produced by the Crown Estates —the last difference was £1 7s. 6d. I have often seen references in the press to the different market values of the Native copra and the standardized copra produced by the Crown Estates, and in most cases there was only a difference of 7s. 6d. to 10s. Between the best grade kiln-dried copra and sun-dried ? —Yes. If we take that £1 7s. 6d. as the basis we would be able to pay only J- cent more. If we were able to get Native copra up to the standard of the New Zealand Reparations Estates we could only give j cent the Natives and not f or a full cent as it is now. Mr. Meredith.] But you would not get the same amount of shrinkage ? —No ; but, as I say, £1 7s. 6d. cannot be taken as the regular difference between the two grades. Mr. Baxter.] On the question of advance and purchase, it does not matter to you how you view it, whether it is an advance or purchase : what you recognize is that the price paid out is too high to make it a payable proposition ? —Yes. Could you possibly afford to work if you get just a small quantity of this first-grade copra ?—No. The paying of a bigger price would depend on the quantity being sufficient to cover the additional expenses of handling it. Furthermore, it is a moot point as to whether the shipping companies could provide the storage space for this special class of copra. They find it difficult enough now to provide storage space for the different marks. If you put second-grade copra and first-grade copra together would the first-grade copra be affected by the second grade ? —Very likely it would. L have never seen copra outturned on the other side of the world, but if the second-grade copra were riddled with insects they would naturally get into the first-grade copra before very long. On the question of these advances, it is quite apparent that the scheme is to take each man's copra as it were on consignment and pay so-much as an advance. You are a practical business man : would that entail keeping separate accounts for each man ? —The number would run into hundreds. The Chairman : Unless they pooled the consignment. Ido not think there is any importance in the question of keeping these separate accounts. I propose to abstain from going into this question. John Dowling sworn and examined. Mr. Baxter.] You are the local manager for Morris Hedstrom, Ltd., of Suva, Fiji ? —Yes. It is before the Commission that the Administration are advancing money on account of certain class of copra to Natives at the rate of 3| cents at Mulifanua, 3f cents at Apia, 3f cents at Vaitele, 3f cents at Vailele, and 3|- cents at Fagamalo. From your trading business and general knowledge of conditions here, could you afford to pay prices like that or not ? —No, we could not on Native copra in small quantities. What would be the" profit on a ton of copra from the Natives, selling it in London ? —ln] our system of book-keeping we do not attempt to show the profit on the copra from the station to London. We treat each station as a separate venture and credit each station at the rate of £16 per ton on the copra landed c.i.f. Apia, and any difference between the buying price and the price credited is reckoned to be the profit to the station. For that particular trading venture we take as a basis the landed cost in Apia, and we then show from our own copra account the charges and costs between the c.i.f. price Apia and up to the selling-point in London : that is, covering all such charges as labour in Apia, shrinkage in Apia copra-store, charges such as export tax, lighterage, cartage, lorry-hire, cost of sacks, insurance, fire insurance on shed, interest, proportion of ground rent for the shed, and proportion of the capital value of the building. We then get to the f.o.b. Apia stage —that is, landed on to the exporting-vessel in Apia. We then take our charges from Apia to the selling-point in London. That allows for exchange, freight, marine insurance in transit, London brokerage and commission, landing-charges in Europe, shrinkage, and our head office charge for selling. That is mainly to cover the cost of daily cables that pass between Suva and London, and covers not only the charge for selling, but the charge for keeping us in touch with the European markets. [Here followed a discussion on figures handed in : Exhibit No. 2.] How do your profits work out ? —We find in taking out these figures that the profits in our 2j cent area, based on what we are paying in the Faasaleleaga district in Savai'i, work out at £1 17s. sd. per ton to the station ; but it does not take into account various overhead charges. The stations in the Apia district, where we pay £13 Bs. lOd. and credit at £16 per ton, does not show any profit to the station. We have four stations in that district, two of which show a loss on copra and two make nominal profits. Could you afford to pay the prices advanced at the various points ? —No, we cannot. What is the figure in London now, the selling-price ? —According to our latest advices for f.a.q. South Seas copra is £26 per ton —that is on the 10th September. You have the wireless there ? —Yes. How much do you reckon Samoan copra would be worth then ? —That is the price for f.a.q. South Seas. We figure that the Samoan should be worth 2s. 6d. to ss. per ton extra on the average, over and above the ordinary price for Fiji and Tonga.

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