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1923-24.

THE PA_ RLI1\JfENT OF THE OF AUSTR1tLlA.

ROYAL COlVI -MISSION

IN CONNEXION WITH

JOINERY SUPPLIED TO THE WAR SER.VICE HOMES COMMISSIONER

•

IN MARCH, 1_920 .

BY rriiE

(H. H. HEN OHM AN,

19TH SEPTEMBER., 1923.

Presented by Command ; ordered to be pn'nted, 27th March, 1924 .

[ Cost of Paper. -Prep:uat ion, ot given; 20 cop1es; approximate cost of printJ;·,g- and £ .]

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u.·,n!Pd :on rl Publ i. h t> d h r the of the I T R n f ArsTRU.! \ h v A r UE RT J. '\f•.·Jr. H T,

Government Prin te r fo r the St:1 te o f Vi ctmi4.

No . 3n.

353

'I'FJRMR OF CON'f1AINBD IN LETT_ ER8 P ArrEN'r TSRlJED

'J1HE HOY A L OO _ MAHBSIONER (j\lfR. :tr. H. HENOHA'fAN) ..

rr•o Ou,. 'Jlrusty and W ell-belo ve d

H Htri\H'RY N, E sqnire, nanistor-at-Law.

CrtF:ETING :

Know yo Lhn,t \Vc; d o by t. lwse our Let.to rs P,ttcnt, issued in Our· name by Our Deputy of Our Governor-Genern,l

nr Our Co mmonwealt h of Australi a., acting with the advice of Our Federal Executive Council, and in pnr·Bwu1 co of

Lli n Con3titu tion of Our s•ti

to: l:tbling, appoin t yo n to }x.:J to inquire into a nd report upon the a,Jt;e ra tion m n.de in or a bout t.h e month

of April, One thousan(l nine hundred and twenty, in t he term.s arranged by a letter ·dated the fourth day of 1\Jn.rcl1 ,

011t ; t lwwmnd nino hnndre(l and twenty, ttddrcssc cl by Ernest R oyston Bn1.dsha.w, Co ntroilor of Supplies, an employc0

of and fm· the: \V <.tr Servi ce Homos Co mmission , to E. and A. Green , upon \l'hi eh t0rms joine ry l'.'ftf> to L•(' SilJi!died

j,_v K a.nd A_ Cr0011 , of Fnnt.srl'n.y, (. o t he Wrtr S0n·if·c Honws C'ommi P.sio nt'r.

355

To Excellency Trn: HrGH'l' 1-IoNORABLE HENRY \VtLUAM, BARON FoRSTER, a .l\ifember of !{is lVIajesty's Most- I-Ionor:tble Privy Council, l{night Grand Cross of the .l\Tost Distinguished Order of Saint Mfchael and Saint G-eorge, G-overnor-General and Comnl

MAY I'l' PLEASJ:; Youn ExcELLENCY---In compli;1ncc 1vith Your Excellency's com.mands con­ tained in Lette;rs. Patent,, dated the· 7th day of Sep­ temher, 1923, requiring y01.1r Commjssioner to inquire into a.nd · report upon the alt.eration made- in or about; the month of April, 1920, in the. terms arranged by ;ct

letter dated the 4M1 day of 1920. by

Ernest Hoyston Bradshaw, Controller of Supplies, a.n employee of, and aeting for the ar SeTvice Homes

Coinmission, to E. and A .. Green, upon which te.rms joinery was to be supplied by E. and A. Green, of

Foot.scray, to the, ·war Se-rvjcc Homes Commissioner: Your Commissioner has the honour to report as

follows: - -1. The Commission saL at J\.'Ielbounw on the 11th, 12th, 13th, 14th, 15th, 17th, and 18th Seutember,

1923, and examined on o

}\{[arch, 1019, :ctud Mar ch, 1921 ;

Eruest Hoyston Braclsha\v, l'riuc!pal Architect, from .July, 19H), and la1er in that year also

appoint.ed Controll er of Supplies, which dual position he held until Scptembe.r, 1921; \Villiam Heginald Bailey, appointed accountant to the Commission in 1\!farcb, 1919, and who held

the dual posiUon of chi e f accountant and

secretaJ:y eluting· April and until September, 1920; Harry IvlcLeocl DuigaJJ, lngal officer to the Commis­ sion between May, 1919, and May, 1920; Charles V\Tent)wort.h who

vice of the Commission on the lOth 1\/[ay,

1920, as chie.f cle-rk, and su cceeded Bailey as :3ecretary in October, 1920; Edgar clames Slater, clerk, who gave statistical €vidence only. (The above witnesses were all o-ffi cers of the· Central Aclminist·.ratiou of the CommissjmL) ·

John Johnston Tait,, DepuLy Commissioner for . the State of Victoria betwee n l\1arch, 1919, and July, 1921; Sir James vVhitesicl c 1\'IcCay, bH sin€SS adviser t,o

the Commonwealth in relation to

vVar Service H om es Commission m atters, ap­ pointed in August , 1921 ; Ed·ward Arthur Gre-en, tl- member of t h e firm of E. A. and D. Green, the contracto-rs in ques ­

tion; and Arthur Cephas Secomb , w ho acted as so licitor t o that firm during the lat er period of the nego­ tiations. The proceedings before the Commission, including the evidence of all witne·sses, w as t a.k en by sworn re­

porters of th e Commonwealth R ep or ting Staff, and th e transcript of such proceedings and is a . nexeJ

to this Report.

2. The letter of the 4th 1920, r-eferred to in

Your ExceUency's Commission, is addressed to ·Messrs. E. · !ind A. Green , but was in fa.ct- intended for and

handed to the fu·m of E. A. and b. Green, and ting formal parts) is in the following terms: -'' for supply of joinery.

In connexion with the oregon and red wood pur­ chased by the Commissioner, this timber will be supplied to you at cost, plus charges witlwut in­ terest. as arranged to-dav.

It is to be understoocl' that the supply of this

timber under these conditions, to you, is on the understanding that the joinery .will be' supplied a.b the November price--list, less 15 per cent. Any increase in labour or mt.1oterials (other t.han tho .foregoing timber) will form the basis from time

to bme of an increase in the rates to be paid you

for joinery as set out in contract." The oregon and r edwood here referred to were the subject-matter of certain purchases previously made by J\fr. E. A. Green in Sydney and :Melbourne under

circumstances clcrrlt vvith later in this report. The November price-list mentioned ·was the list issued for N overnbcr, 19JD, by the Timber :. M:erehants .L:\:"ssocia­ ti.on of :Melbourne aud suburbs.

It will be seen that the stipulatiom; purporting to be laid down by l\fr. Bradshaw by this letter are as fol ­

low: -(i) ',Ch e oregon and redwood to bo supplied lJy the at cost plus charges withm1t

mtcrest;

(ii) joinery to b-e supplind to tho Commissioner at the November price-lisf, less 15 per cent.; (iii) any increase in labour costs in making joinery to form the basis of incre.ased rates of pay­

ment for such joinery; (iv) any incre-as€ in the cost of materials (other

than such oregon r1cnd r edwood) to form th0 ?a_ si s of in c1·eased r at es of payment fo1

JOl ncry .

3. Th e terms of t.he co n( r ad, !Je l.wc-c·n Uw ComniiR­ oioner :md th e G r ccmtJ u.s fi11:.lll y excc.uted u11 the A pril, 1920, so far as r cJe ,ra n t c 1o tb c purposes of

present inquiry, ar e as follow:-" 5. The Commissioner will pa.y to the con­

tractors from time to time for joinery and mould-- delivered and accept-e d by the Commis­

SlOn er u n der th1s agreement amounts calculated at t he rate of se-ven teen and o-ne-half per centum ( 17 per Ce:J'l +- ) les3 than the prices shown for simi-larly classined articles in the m on t hly price-list for A pril, 1920 , for joinery and mouldings issued by the Timber :-vierchants Asso c'i ation of Melbourne

and SUburbs I a Copy Ot which list 18 attached

nereto, and m arked with tho letter ' A').

6. If at any time during the continuance of

this agreement (a) t he cont ractors shall claim an increase' in the amount payable for joinery and

mouldings to be delivered to the Com­ missioner unde.r this agreement a.bove the net o,mount payable by the Com­ missioner as calculated under clause 5 hereof; and (b) the contradors shall sa.tisfy the Commis­

sioner that the cost to contradj{Jrrs

of joinery and mouldings has been in.­ creased wholly or in pa.rt · be.cause of the contractors having been compelled by or under a la.w of the Common­

wealth or the State of Victoria to pay wages to workmen higher than the

rates payable by or under such la.w in April, 1920; the amount payable by the Commissioner to the contractors for joinery and mouldings manufac­ tured and de1iverred to the Commissioner subse­ quent1y to t h e date upon which such higher

wages became, payable by the contractors sha.ll be de€med to be increased to the extent to which the Commissione'r is satisfied such rise in cost was due t o the matters mentioned in pa.ragraph (b) of this clause.

7. On the thirty-first day of December ·in each yea.r during the continuancer of this agreement the amount pa.yable by the Commissioner for joinery and mouldings 1mder this agr€ement shall be

reconsidered, and if the Commissioner is satisfied that the cost of ma.terials used in ther manufacture of the sa.id joinery and mouldings is on tha.t date greater or less than the cost to the cont.ra.ctors of such materials on the first . day o.f April, One

thousand . nine hundred and twenty, and that the cost t o the contractors of jorinery and mouldings has been the,reby increased or reduced, the amount payable by the Commissioner for joinery and

mouldings shall b e deemed to be increased or

reduced as from the first day of January then

next following in the, proportion in which the cos.t to the contractors of the sa.id joinery and

mouldings is found to have b een sor increased or r educed. 8 . The Commissioner shall not be ·bound or

affed ed by any Increase in the market

prices of joinery or mouldings from · any ca.use

whatsoe.ve r other t han th e causes and tor the exten t set fort h in cla.uses (6) and (7) of this agreement. 9. _( a ) _The Commission er shall, for t he purpose.s of t h1 s. agreem ent, supply yem-ly to t h e contractors and t h e contractors shall acce.p t for and u se

exclusively in t h e m anufacture of joinerr y and mouldings in accordance, with t his ag r eement-1,5 00 ,000 supe.r. f eet o,f oregon or othe·r timber and

1,500 ,000 super. feet of redwood or oth er

timber;

(b) The price. of such t imhe·r a.s supplied by the Commissioner t o t h e contractor shall be,-( i) for oregon or other timber 6 ?J d. lJie•r fooL

super. ,

(ii) for redwood o-r ot h er Limber 9d. per fooL

super.,

ex Co mmissioner's storr e or dep ot , Melbour n e. (c ) The- co ntractor sh all use in h e m anufacture of said joinery o-r mouldings the· t imber

supplied urrd e.r clause 9 (a) of t his agreemen t. :Summarized ? _t h ese·· clauses (i)- That h e '\hll pay !or joiner y at

19 20, price-list, less 17 l p er

oonu. j

4

(ii) Increased cost to the contractors due to

increases in wages payable under a. law of the Commonwea.Ith or of Victoria,

over the wages paya.ble under such lavv in April, 1920, to be, bo-rne by the

Commissioner;

(iii) Annua.I re.vision to be had on 31st December in each year of the. amount to be paid for joinery, and any or decrease at

that da.te in the· cost of joinery, due to

the increrase or decrease in the cost of

ma.terials actually used ·in manufa.cturing such joine·ry, to be allowed for in fixing _ the price for the succeeding · year; (iv) T'he Commissioner not to be affected by any

increases in the market price of joinery due to othe·r causes; (v) Ther Commissioner to supply yea.rly to the contractor for use in the manufacture of

the joinery-1,500,000 feet of oregon or other

timber at 6id- per foot super. ·; 1,500,000 feet of redwood or other

timber at 9d. per foot super.;

ex Clommissioner's depot, :Melbourne. It was pro·ved in evidence that the prices of 61d. per foot super. and 9d. p er foot super. for oregon and

redwood respectively were arrived at by calculating, and, in fact, represented, t he re_ spective cost prices of the oregon and redwood r efe.rred to in the letter of

the 4th 1920, plus charges landed in tho

Commissioner's depot at 1\tielbourne, without interest.

4. On the assumption that the letter of the 4th

Ma.rch, 1920, did, in fa.ct, represent terms a.rranged between the parties for the supply of joinery (an

assumption which was not borne out by the evidence , as will appear later in this report), the principal

a1tera.t.ion made by the contract, as finally executed, was tha.t the joinery supplied wa.s to be paid for at the prices shown in t.he April, 1920, price-list, less cent. , instead of at the prices shown in the, November,

1919, price-list, less 15 per cernt. It is with this alte,ration that the, inquiries of the

Commission have been concerne,d. The other provisions of 'the contract, as aboye

summa.rized, do· not appear to depart substantially from the te.rms laid down by the letter of the 4th

March, 1920, except in so far as they represent a fuller elaboration of those t erms. It is not, therefore,

considered n ecessa.ry to deal further them in this

repoTt. '

5 . I n order to make cl ear the nature of and re,asons for t h e alteration in the· basis of pay ment, from a

p rice based on the November, 1919, price-list to one based. on t hat of April, 1920, it is shortly to

r ecarn t ulate, the efforts of t he Commissioner to seeure a suitable contra.ct for joiner y for use in the State of Victoria, and the negotiations between his officers and the Greens, sor far as relevant to the joine-ry contract finally given to their firm .

6. The Commissioner, who was m immediate need of la.r ge supplies of joiner y.) had made . strenuous

en de,avours to secure suit able· t enders for his

requirem ents. A n umber of tenders had been received. t h e form of which sa.tisfied him and his Controller of Supplies, Bradsha.w , t·hat the tenderer&, who were all membe.rs of the Timber l\1 ercha.nts As-sociation, were

acting more or less in conjunction, and it was

considered an att empt ?eing made to ·exploit

the n ece·ss1t1es of t h e Com missioner by forcing up

prices. The Commissioner h ad given general instructions to .his officer s t hat,. in for supplies,

owmg to the magmt ude of h1s transactions, he should

expect to receive substantial coi1cessions below ruling market rates, but none of the tendeters were prepared to malm such concessions.

7. Endea.vours were therefore i11ade to get into touch with firms outside what was believed to be a " com­

bine,' ; a.rtd ultima.tely the hame of the fitm of E. A. and D. Green was btought to the notioo of Br·adshaw, who, as Cot1troller of Supplies, was the officer principally interested. ·

Inquiries rnade as to the standing of that firm

showed that the,ir business was a relatively small one; and their financia.l standing such that they could not be expected to ca.rry through contracts of magnitude without assistance. A numbe·r ot interviews followed between Bradsha.w and E. A. Green, who acted for the firm throughout the subsequent negotia.tions, and finally, on the 14th N o·vember, 1919, E. A. Gteeai de­ live,red to Tait, Deputy Co:rnniissioner for Victoria, a le.tter which (omitting formal pa.rts) was in the foll()lw­

ing

I hereby a.gree to supply joinery, niouldings, &c., for the supply of 2,000 or more houses, ye,arly, at 15 per cent. discount off price·-list enclosed, and agree to supply 1,000,000 feet of hardwood

yea.rly, on trucks Melbourne or suburban railwa.ys, at wholesale rate.s, a.s fixed by Hardwood Millers Association. The _present rili.tei is 15s. 6d. per 100 feet super. basis, on rail Melbourne or suburbs. On the same da,te, Tait, afteT consulta.tion with Brad­ shaw, hand€ld to Green a reply in the following terms

(omitting formal parts), namely :-Your offe.r of 14th November . for the supply . of JOinery mouldings, &c., for 2,00'0 houses 'or more y early at 15 per cent. discount off November price­ li st with variation of design, as per de,tails of com­

mission, and the supply of 1,000,000 of hard­

wood a.t 15s,. 6d. pe·T 100 feet super. ba,sis, or a,t whate.veT ra.te is fixed a.t the ne,xt mee.ting of the association tha.t fixes the basis, has beren accepted f! ubject to execution

terms agreed upon, which will be prepa.red at once for signature, and when ready you will be notified.

8. At that time the Central Administration retained in its own hands the making of all major contracts for the supply of materials., and t,he Deputy Commissioner had little to say in connexion with t he . formation of contracts, the details of which h e would have · subse­

qu.ently to ca.ny out. In signing the above letter Tait was merely carrying out the instructions of the Central Administration.

9. Following this excl).a.nge of documents, the firm immediately proceeded to secure materia.ls for the m anufacture · of joine,ry, and in December, 1919 , E . A. Gre,en proceed ed t o Sydney , where, early in that month, h e en te,red, in t h e name of t h e firm , into large

contracts for t h e putchase of tedwood timber . These contracts, which were for cash , involved an o:ut lay of something Tike £80,000, and his firm, t h en indebted to its banke·rs, would have b ee-rt quite unable

to carry them out without t h e fin ancial a-ssistance of t h e Commissioner.

5

There ]s room for doubt as to t h e manner in which Gre·en in:duced the vendors of these timbers to make contrads t,heir sa.le t o h is fi rm. It was suggested .

that he secured such contra.ct.s only bv representing t hat, h e was the a.ocredited agent of ·he Coonmissioner. Green, on the ot·h er hand, maintained t hat he had

been aut h orized by B radshaw to r epresen t to . vendor s of tim in N Sou h vVales t h at t,h e Commissioner

was ready to finance h is purchases . However t his ma.y be:--and a decision of t his dis­

put does l lQi ar pear materi'al for th e purposes od' t h e.

present inquiry-the oont.racts wer e, in fact, made ou t

•

357

in the name of the firm, and were at once forwarded by Green to Bra.dsha.w wit,h .a reque,st tba.t the Com­ missioner should immediately make funds available to ca.rry out the purchase·s. T'his Bradshaw refused to do, but, after an interview between Green and an. arrangement was come to whereby nevi

co?-tra?ts , m the name of the Deputy Commissione'r for' V1dona. ang t,h e vendors of this redwood were stituted for those entered into by the vendo,rs with the firm.

The conditio:r:s upon .which this . arrangement was reached were disputed, but it is at least cle,ar from

t that ai though Gte.en . acquiesced

m t,he subs.t.Itutwn o,£ the Deputy Com:tnissioner as purchaser; he clain;ed and ±naintained thtoughoub all subsequent proc.eedmgs that. any . profit t,a be derived the purchase of this should belong 1·0

his firm, and not to the Comnusswne'r. This claim

was ne:ve·r · admitted by the officms of the Commission. Dur ing negotia t.ions. which followed, the question of the nght of of this timber, the market

value of which was rising rapidly, was the main bone of conte,ntion betwee.i1 the pa.rties, and main oause of de,lay in the final settlement of the terms of the

pro,posed contract.

10. It does not aP.:,pea.r that, either Bradshaw or

Green rega.rded the letters of the 14th November 1919 a.bove set out (although the one purported to' he a.cceptance of the other) as constitut.ing a concluded agreement. This is c.lear, from the fact tha.t the dra.ft agreements prepa.red by t,he legal officer of the Com­ mis'Sion, Mr. Duigan, and submit,ted to Green all contain other t.erms ,tha.n those dea.lt with by 'suoh letters . . Moreover, a close conside,ration of those let,ters shows t,he reply of the Deput,y Commissioner to

Green's offer was not· a. simple acceptance;, although purporting to b e such, hut, was in the nature of a.

counter offer, and was oonditiorial on the subsequent execution o,f a formal contract.

11. The negotiat.ions, into which Secomb (Green's solicitor) was ultim.a,te,ly importedt· extended over the period January to April, 1920, and were marked by frequent interviews between E. A. Gre·en and Seeomb

on the one side, and Bradshaw, generally assisted by Bailey and Duigan, and occasionally by T'ait,, on the ot.her.

12. Mea.ntiino, in February, 1920J Gre,en had entered into three cash contracts with Melbourne firms for the purchase of large: quant.it.ies of oregon, which oont.raots h e at once su-bmitted to B radsha.w, with the request

tha.t the Commissioner should finance the purchases. T'o this reg;uoot, Bradsha.w adopted the same a.ttitude as in r egard to the redwood, and finally a; similar result was arrived a.t,--new contracts in t he name of the

Deputy Commissioner for Victoria as purchaser being substit.utBd, wit.h the consent of Green, for those be­ tween his firm and t h e vendors. As in t,he oase of the

redwood, bot h pa.r t.ies later claimed the ownership of t.his oregon . During t h e subsequen t negotiations, It seems t.o ha,ve been assumed t.hat Green ' s claini to thiC, ore.gon was on the same plane a,s his claim to. the

13 . A l hough t h e Commissioner had instruct·ed

Bailey, as chief accountant, Duiga.n, as le:ga.l officer, aud Tait, t h e Deputy CommissiOn er, that the'y would each be expe cted to safegua.rd t h e intBrests of the Com­ mission in h e preparation of t h e terms of Green's

co,n r act, it was pro,ved t hat Tait had little or no V?'ice in h e rna ter, hat Bailey concerned himself mamly

wi h clauses relating to finance, and t hat Duig·an 6D ed himself to 1 :edu cing into legal forri1, ai1d tra.ns­ mi -·ing to t h e CommoJ?.wealt h Crown Solicitor-, 'inst.ruc­ tious received from ot h er officers.

Bracbhaw, time to time

a.ctor in the

bility for all

uuJer t.hu Co.mrniss ioncr---to whom fro-m he l'uUy repo-rted progress---was t.he main n e.goti atious, aud accepted full rcspousi­ d cc isions arrived at.

14. l>ni'ing February draft agi·eements wore

pre-pared, iustru.ctioHs, by Dniga1;. Thcso ·were

then submitted to th e Crowrt Solicitor, 1vith a request. for the preparation o.f a. proper legal draft. On the

3rd .l\rarch, the Crowi1 Solicitor's first draft. 1vas re.­ ceivcd at the . office of the Commission, and was

conside·red on that day an interview at which E. A.

Green ctnd Seeomb- now appeared for the first.

time- were present.. ·

13. At this interview Secomb suggested certain

clauses designed to settle the dispute as to t,he, ownership of the redwood and oregon. In eiiect, these suggestions authorized the Comrnissiouer to bny, at. agreed prices, at tho contractors' rnaterials for ca.rrying o•ut the

joinery works, ?.nd required t.he contractors to pay for such materials at. nctual cost.. price tu the Commissione:.r, LhoJ. is to say, u.t ccJSt plus charges.

A draft nf these was ha11ded by Secomb io

Duigau, at. the· i'W,Jne time makhlg it quite

olear tha.t, Grem1 clainJed the right tO' ;J,ny pro.fiL which rnighi. accr1w by reaso n of any increase i11 the v;•lnc of t.he oregon

Bradshaw's attention to this claim, and advised him t.hat he could 11ot further with t.he matter

of the cont.ract until the question of the . o·wnership o·f the redwood and oregon was cleared up. Tt was accord­ iuglv arra,ngecl t.ha!J Bra.clsha.w should write to Green Uw letter o·f the 4th March, 1920, in the hope of there­ by establishing the own crshjp of this tim b cr in the

Commissioner. · Bl'adshaw admitted- and it is quite clear-that this lelJnr did as t<} the para­

gnlph thereof - tenus already act.uaJly arrauged. Green had, in fact, u evcr agreed that. the joinery

lw supplied at the November price-list, less

15 per <.:ent.

I G. [nnnediatt:ly upou rect• iving Green

:lll(l Secomb, 011 the Gth l\{arch, agai11

J)radshaw, and lllCI,ck .it. clear that. it.s Lcrms :not

aceept.abk t o t.hem. .At that intervi ew, 110 definite

was arrived at.

A lu 11 ill 11egut.iat.ions now follow od , d t;ring

which both before going further, so ught Lo

strengthen their positi on s by obtaining legal advice as · I o the ownershjp of the r edwood and oregon.

17. M ea11whilc t.he Commissioner, whose policy

thro11ghmll: h;,,cl lH;en to n se Australian timbers as far as possible for all purposes, had been in negotiabon wit·h the Queensland Pin e Company for the l)Urchas e:: of very large g11antit.ies of hoop pine , and 011 17th :Feb-ruary had si.gned eout.ract.s therefor.

H. vvas his iJJLeuhon- -formetl a.Hcr nu1nerous cou­ f:.: il H.at.io ns wi Lh Bradshaw- to n sc hoop !.>inc,

sovn as .it. sho11ld come forward , for the joinery cou­ i raci, i of t he redwood and oregou.

18. Green was ve rbally advised by cmitwllt, cc ldlsel tll at-. J1i s firm 's claim to· the r edwood and oregon was valid. On .lG t h April , the Crovvn Solicitor expressed the opinion t hat the ownership o.f this timber was the

Commission, and that Green had no cla-im upon it.

6

Early iu the cveniilg both parties too·k up a (1<.-Ler ­ mined stand, each claiming that, he was entitled to the full pro·fit attributable to the increase in the value of the redwood and oregon. This increased value t:>y this t:ime r epresented, upon the first two shipments of the redwood alone, a sum of about £22,000.

A deac:Uock seemed ]mmincnt, Green abso lutely r efusing to enter into a, contact on the bas]s o.f N ovem­ ber prices, or to give up his claim to the profit on

the redwood and oregon, and threatening legal pro­ ceedings to enforce his claim thereto, and Bradshaw maintaining with equal the Commissioner's

claim to tne timber. · ,

A suggesbon was then made by Secom b LhaL t.h c parties should divide the profit. To this B1 adshaw

was at first inclined to accede, but after cons-ultat]on wi th some of his colleagues, decided that h e . could not agree, as there would- be difficulties with the Trca(;un:r in getting through payments to Green on such a basis .

20. Bradshaw then stated that, they all that the redwood and oregon contracts effe ct ed Lhrough Green had proved exceedingly opportune, and h e

had a uwral right Lo rennmeration , and that

h0 sho·uld r esign his claim to t h e profit -and aecept

conuni::;siou on a brolwrage basis, n1cnt.ioni n g t h e- sl.tlll of £2,000. further sugge·sted thaL the April price-list, less

20 per cent., should be adopted as the basis d pay­

nJent, and that the respedi ve prices of ior oregon

or other tiniber, and 9d. for redwood or other timber, representing actual cost to the Comn1issi(1n, plus

charges, plus the £2,000 brokerage, sh cHld :H:) ;;tgrced upon.

2J. Green and Seeon1b, who did Dot, realize the sig­ nificance of the words " or other timber," while

willing to· ·accept a basis fixed on A prjl prices, at tirs t1 out for 15 per cent., but Secomb finftlly i) e rsuaded

Green t.hat. h e would he d.oiug well for his Grm jf h e

;1.ccept.ed a discount of 17} per cent. This proposition was put Lo Bradshaw, aud was accepted by him, he having originally proyo;:,ed 20 por eent. merely for tho sale of bartering, anJ JI' the

Pxpcdation o·f havi11g to· agree to· 15 per cent.

22. When accephug Bradsha:w's suggestion.:s, Grce 11 and Secomb were not aware that the Commissioner had purchased the Queensland hoop pjne·, and believed that., in giving their assHnt. to t.hc tenus proposed, Uwy

were in fact securing to themselves practjcally aa Uw)r elaimed. The result, j t s.ee med to them, · of ·

ter.ms would b e that they would get", as mate rial for th e joinery, red wool) purchase d at D ecember prices and oregon purohase cl a t- .Fehntary prices, CJ.nd would be paid, for joinery manufactvred from such tjinbers, on the basis o.f April joi11 ery prices, thus in tact sf\cur­ ing almost the full be11 e.fit of the rise in the value of

(he tim bet. This rise , in th e case of the redwood , aawunt.ed to

about 18 pe1· cent.. as between November , and

A pr.i I, 1920.

2: ;. Bradshaw, on the other lw.JlC] ,- on thn

purchase of Quec u sland. hoop pine, a.nd on t he v.rords " or other timber," ·was p erfed]y satisfied that he has) got the best of the bargain, inasmuch as h e intended t.o supply to the Greens, uo !; the redwood nor . the

they expected to get, but the cheaper llOO}J

pme, and to sell elsewhere at current market values tJhe red wood and the. oregon' t.hus rea pin 0' for

Commission the full benefit of t.h e increa.s;d market rates for those timbers.

Thus r einforced , Bradshaw arranged a couference. wit.h Green , which took place on the 19 t h April, and lasted from about 6.30 p.m. up to n early midn ight.

Those present included Secomb, E. A. Green and

David Green (the latter tafcing no part in the di t:cus­ sion ), Bradshaw, Ta..it, probably Duigan, and , during part of the time, Bailey. At this interview terms wer e finally agreed uporJ.

24. During the following week, fresh drafts were pr epared, embodying the alterations agreed uDon at the above mentioned interview o.f 19th April, and finally, on the 30th April, a contract was signed includ-ing the terms already SBt out. .

•

25. On tho fo1lu\ving day Green duly put in his e:la.im for £2;000 brokerage, which claim was satisfbd by payment on 7t.h Nfay, 1920 .

26. On the. 6th May, 1920, Bradshaw formally

recommended in writing i-o t he Lital . as

soon as the Quee nsland pine timbct should be d eli vcred to depots, quant.it.ics of the redwood and oregon, equal t.o the quantity of pine ontering tho depot:;;, sh ou ld be sold at market rates.

27 . If the Commissioner- who was fully con v,: rsant at all stages with Bradshaw's intentions, aud ',\

profit to t h e Commission.

(J nfortunately, lVIinist.erial approval of the proposed sale of the redwood aud oregon was withheld, on the ground t.hat · the Commission should not in

trading operations.

7

35.9

28. Ia co nclusion , ym1t Cu·mmission er eons.iders j t:, his duty, in view o [ the \vide publicity given in th&,

press to certa,in statemen ts ma.d e in evide.n ce., to

report t hat there is not t h e slightest ground fm·

impugn ing the loyalty or t h e p ersonal integrity of l\Ir. Rr;i dshaw or- so far as r egards this particular eonlraeL - his professional ability .

29. The Connnissione.r 's thanks are due to lVfr. Ian l\I a.cfarlane of Coun sel, who >Ve-ts inRtructed by the Connnonweal th Crovvn Solicitor to assist the Commis­ sion , and to Mr. John Gardner Davies of t 1je

m onwealth Attorney-Gen eral 's Department, who acted atj secretary to the Commiss.ion, ior t.h e very caFahle and willing assistan ce rendered by each of them.

Given under my hand and seal at Melbourne, m the of Victoria, this 19th day of

SC>ptcmber, 1923.

(Signed) II. IL IIENCHlVI.A.N, Commissioner.

l' riJI! e rl Hl:cl f'ul,li :; lt e d f r lhe GOVEI!N HF:NT of the COABI O NWP.A I.U! o f A IIS'I'k.\LIA l.y ALI\ RfH .T . }.f'uV..:.R'Ff, l ' rin ter ( or th e S t :1 t e of \ ' icto r ia .