time the Farm Loan Board, under the Act of 1916, makes advances to the Joint Stock Land Banks, which deal, not simply with associations of farmers, but with the individual farmer. Very large sums have thus been advanced to the agricultural community and it is recognised that this action of making credit available has been a most effective aid to the farmers during the depression and has helped forward the organisation of the industry, particularly on co-operative lines. Modifications are being made in the framework of the Federal Farm Loan Board, and part of the existing organisation is intended to act as emergency machinery, but the foundations have been laid of a great national system of agricultural credit differing widely in character from the agricultural credit of Europe in its use of the existing banking system, and in providing supplementary machinery to secure that the farming industry is adequately financed.

200. In reviewing the position in this country in the light of foreign experience we venture to offer the following considerations and recommendations. First, as regards the relation of the State to agricultural co-operation, we consider that the State should continue to give assistance to this form of organisation. We have pointed out that this country is more backward than most other States in its co-operative system. The State is concerned that the industry should be properly organised so that its own services should be effective; and on this ground alone, the State, in our opinion, would be justified in actively supporting the movement. We hope that the Minister of Agriculture will continue to use his efforts to bring together the representatives of the Farmers' Union, the Chambers of Agriculture, and any other bodies which are specially interested in the better organisation of agriculture, and will secure, by consultation with them, an agreement as to the channels through which the State can assist in the formation of farmers' associations for the purchase of requirements, the preparation, grading and marketing of produce, and the development of facilities for credit and insurance. We would direct special attention to the importance of propaganda and organisation as regards the grading and marketing of produce. The work which is being done, especially in the United States and in other countries, by Government Departments and State officers is rapidly placing the produce of these countries on a higher average level of standardisation and making competition with our less carefully graded and organised home produce a very serious matter for the agricultural industry. This problem touches closely the problem of agricultural credit.

201. Apart from the importance of organisation generally to the agricultural community, there is a special need for assistance to smallholders. It is recognised that a small holdings movement requires for its stability a full use of co-operation.

202. We are in favour of the State availing itself, as far as possible, of the services of voluntary organisations, so that the self-help spirit which is essential to the success of the co-operative movement should be encouraged. The aim should be to make the movement self-supporting within a term of years, but we do not consider that it is yet sufficiently established or is likely to make by itself such headway as to justify the State in withdrawing its support at the present time.

203. We recognise further that the methods which are pursued in England may require modification when applied to Scotland, where the State supports the work of the Scottish Agricultural Organisation Society.

204. It has become apparent in the course of the preceding discussion that the State can assist agriculture by putting both short term and long term credit at its disposal under suitable conditions. With regard to the Agricultural Credits Act, 1923, we are convinced that greater success is likely to follow from the provisions of Part II. of the Act, if it is carried out in close association with the Co-operative Supply Societies already in existence. On the side of long term credit are to be noticed the funds for loan purposes recently made available by the Minister of Agriculture for such objects as the erection of bacon factories, creameries, &c., while for approved undertakings calling for larger expenditure recourse can now be had to the guarantee under the Trade Facilities Act.

205. We do not propose that any addition should be made to the funds now in various ways available, until there has been adequate experience of the opportunities now for the first time called into existence. But we urge that careful consideration is called for as to the best kind of machinery for their utilisation. And the wise solution of the problem seems to us to be conditioned by three considerations. One is that a Government Department is not a suitable body for the discharge of functions which are properly those of an independent banking organisation. The second is that in the provision of assistance to agricultural societies and agricultural enterprises a large element of local knowledge and local interest is evidently desirable. The third is that though the great Joint Stock Banks of the country do not, in our judgment, adequately meet all the legitimate requirements of agricultural credit, they do already meet so large a part of them and they have so much practical experience in agricultural districts, that it would be wise to invite their co-operation in the provision of the further machinery which is still called for. We anticipate that the Joint Stock Banks will not be unwilling to render the considerable public service which they are capable of in this respect.

206. We are of opinion that it will be found, on examination, that all these considerations would be satisfied by the establishment of County or Joint County Farm Loan Boards, on which

representatives of the farming community should have the expert assistance of banking advisers and of government officials, though enjoying a carefully defined autonomy up to prescribed financial limits.

207. Such a Farm Loan Board should be the authority responsible for assistance not only to the local co-operative societies, but also to Farm Loan Associations within the district. It could act as the County or Joint County Authority for assisting especially associations of smallholders, and it could also serve as a centre for re-insurance of co-operative live-stock or other agricultural assurance societies. It should also be the function of the Farm Loan Board to inspect or secure satisfactory audit of the accounts of the local societies with which it had dealings. Great importance has been attached rightly by the co-operative movement in Germany and elsewhere to careful audit, and experience in this country shows how very vital is this matter in the assistance and protection of the movement.

208. If such County or Joint County Farm Loan Boards should prove successful, the time would soon come when it would be found expedient to co-ordinate their operations in a Central Farm Loan Board. The Boards-as will be readily seen-would possess features similar to those of the Caisses Regionales of France and the Agricultural Banks of America-but with the necessary adaptations to the special traditions and circumstances of this country.

209. One of the disadvantages of the existing credit system in this country is the limitation of the credit which can be secured, especially by the smaller farmers, on growing crops or live-stock, for a Bill of Sale is not an instrument of credit which the farmer cares to make use of. On the other hand, an American Farm Loan Association, in which the members agree to sell co-operatively certain crops or stock off the farm, gives a basis on which credit facilities could be organised, with the crops and stock in sight as security.

210. The work of live-stock insurance societies should be related to the problem of the eradication of disease, particularly of tuberculosis among milk cattle-a problem itself of insurance and compensation. We direct attention to the rapid progress which is being made by the schemes for the eradication of tuberculosis amongst milk cattle in the United States, by which the systematic testing of the cattle in particular areas has been carried out, with the result that an increasing number of areas are being scheduled as clear from tuberculosis among cattle. Concerted efforts to eradicate this disease are so important, both from the point of view of public health and of the livestock industry itself, that experiments in certain districts should be undertaken with a view to a national system of live-stock immunisation and insurance.

211. In 1913 the Ministry of Agriculture issued a Tuberculosis Order, and this was replaced by a more extended Order in July, 1914. The Order required the compulsory slaughter of all cows or other bovine animals found to be suffering from tuberculosis or giving tuberculous milk. Compensation was payable at the rate of three-fourths of the value of the animal, but if the tuberculosis was advanced the compensation was reduced to one-fourth. Under the Diseases of Animals Act, 1894, compensation is payable by the Local Authorities, but the Ministry on the issue of the Order in 1913, obtained authority to repay to them for a period of five years, one-half of the net amount of compensation after deduction of the receipts for the salvage of carcases. The scheme in this form was not acceptable to the Local Authorities, many of whom in Scotland refused to work the Order at all, consequently in the Order of 1914, it was provided that the Exchequer contribution should be three-quarters of the gross compensation. On the outbreak of war the operation of the Order was suspended, and it has not yet been revived. We are glad to learn that the question of revival is now under consideration. This, however, should not prevent research into other methods of dealing with this important matter.

212. Co-operative Insurance.-Third, the field of agricultural insurance is another aspect of agricultural organisation in which development abroad has far outrun the corresponding progress in this country. The principle of co-operative insurance has been applied abroad to many different sides of the farmer's interests, to live-stock insurance, to fire and accident insurance, to insurance of crops against hail, blight and other risks. The most notable aspect, however, and that which is of the greatest importance in this country, is the development of live-stock insurance. In England, apart from the limited field of insurance, through private companies, of pedigree live stock and a number of small isolated Pig, Cow and Horse Co-operative Insurance Societies, very little has been done. The vast majority of the horses and cattle in the country remain uninsured.

213. The matter is not only important from the point of view of actual insurance against loss, but from the standpoint also of the records of disease and the organisation of the treatment and protection of live-stock against disease. The co-operative insurance systems abroad have resulted in much information being systematically obtained of the incidence of disease and on this account alone it would be fitting that the State should endeavour through its Departments of Agriculture to advance the system of co-operative insurance. The records of mortality even in a limited number of societies would give a better indication of the loss which annually takes place amongst live stock of the country than is at present available and would provide an index of the several causes of the loss. Thus, in France, there is published each year by the Ministry, tables showing the proportion of loss among the different classes of live stock and the causes

of disease. But the immediate practical object is to give the farmer a greater security against the serious loss which may at any time befall him in connection with his stock. The matter is important, particularly for the smaller farmers where the loss of a horse or a cow may be a very serious matter, whilst among farmers both small and large the incidence of an epidemic may cripple his resources for years.

214. We may refer in this connection to the recent outbreak of foot and mouth disease. During the last eight months, no less than 103,000 cattle, 43,000 sheep and 48,000 pigs have been slaughtered, the compensations amounting to 3,300,000l. But the amount of compensation does not by any means represent the full loss to the farming community.

215. Among advantages of co-operative insurance may be mentioned the possibility of keeping down charges of supervision and of stimulating a direct mutual interest in preventing losses. In France, the Co-operative Insurance Society has been one of the effective means of disseminating information on the care of live stock, and the Society can be made the instrument for improving the health conditions under which live stock are kept.

216. But it is necessary that there should be provision for re-insurance and a central organisation which can help to bear the incidence of severe epidemic losses in any particular community. Where there is co-operative insurance the cost of insurance to the farmer can be kept down to the lowest point consistent with a margin to meet special losses. At the same time the experience of working Co-operative Insurance Societies is one of the best ways of spreading the understanding of co-operative methods.

217. We should like to see the State making grants for the purpose of organising co-operative live stock insurance in this country on condition that satisfactory returns are made of the incidence of disease. This should be done for a period of years, until the system has become well established, when it can be left to develop on self-supporting lines. The State would, however, have to assist in connection with the problem of re-insurance against epidemics, and a central State organisation which will specially attend to this matter offers the most satisfactory way of dealing with these problems.

E.-Stock and Crop Schemes.

218. (a) Live Stock Schemes.-As this country still stands in the foremost position in respect of the character of its animal husbandry it is of the highest importance that every effort should be made to strengthen this position. There are various lines along which the State can assist progress. First, by extended research into the diseases of animals and the means of protecting the livestock industries against the epidemics which from time to time so seriously threaten it. Second, by the grading-up of the livestock