AGY-6094 | Royal Commission respecting the inquiry into the George Georgeson wheat contract, 1919

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The Royal Commission respecting the inquiry into the George Georgeson wheat contract was presided over by Justice Robert Darlow Pring. He was directed by the Governor, Sir Walter Edward Davidson, under the Commission dated 18 July 1919, to inquire 'into the circumstances surrounding the making of the Contract dated 20th day of February, 1919, for the sale to George Georgeson of 72,000 tons of what is known as the 1916-1917 wheat....'. He was to report back within a month. (1)

In September 1916, with World War I restricting shipping and world markets, the Federal, New South Wales, Victorian, South Australian and Western Australian governments united by contract to ensure the sale of the wheat crop. The Australian Wheat Board was to 'exclusively organise, control, and direct the operation of the scheme involving the export and sale overseas of grain, and the fixing of the price at which grain may be sold by the State as under clause 4(b) of Article D'. (2) The contract was originally confined only to the 1915-1916 harvest, but it was extended with the war. The states set up State Advisory Boards. The New South Wales Board consisted of William Calman Grahame (Minister for Agriculture), Leonard Rossell (miller), Arthur King Trethowan (MLC), George Valder (Under-Secretary, Department of Agriculture) and Mr. Holliman. (3)

Grahame objected to the Wheat Board's control over inferior wheat. On 6 February 1919 he wrote to Senator Edward John Russell, the chairperson of the Australian Wheat Board, giving notice 'that all future export sales of inferior wheat will be made without reference to the Australian Wheat Board, and that all such sales since the inception of the pool will be treated in the New South Wales accounts as on the same basis as local sales'. (4) The sale of inferior wheat to George Georgeson was in negotiation before, and completed after, the letter was sent. The sale was not submitted to the Wheat Board for confirmation.

The sale to Georgeson involved reject wheat from the 1916-17 harvest, damaged by excessive rain before and during the harvest, attacked by mice plagues in 1917 and 1918, and infected by weevil. The British and Americans refused it, although some wheat was sold to the Japanese. Mostly it was mixed with good wheat and used locally, until rejected by local millers at the end of the war.

Georgeson bought 72,000 tons at an average price of 4 shillings and 4.5 pence per ton, just as the failure of the Japanese rice crop opened up a better market. This price was a shilling below the price of the best wheat. The Commission called representatives of local millers as witnesses: F. Crago and Sons Ltd, Gillespie Brother and Company, and Lindley Walker and Company Ltd who agreed the price was fair for the quality. Others disagreed, such as representatives from John Darling and Sons and Dalgety and Company.

Pring's report was finalised on 18 August 1919. He maintained that Grahame was incorrect in his belief that the Board did not control inferior wheat. Pring was critical of defects in the contract. It did not ask for a deposit from Georgeson or any guarantee that he would carry out the contract. This was a problem given that the contract extended over ten months, was worth more than half a million pounds, and involved, in Pring's words, wheat that 'was practically unsaleable'. (5) However he held that the price sold to Georgeson was fair for the quality of the wheat. He could not find evidence that a secret understanding gave Georgeson favoured treatment. (6)

The State Government was not satisfied. On 15 September 1919 Pring was again asked to examine the circumstances surrounding the carrying out of the Georgeson contract, along with 'the receipt, management, control, sales, and other dispositions by the State Wheat Office or the Department of Agriculture of the wheat of the said State of the year 1915-1916 and subsequent years...' (7) On 23 September 1919, Pring received a further Commission to look at certain moneys invested by Grahame and whether obtained by bribery or otherwise improperly.

Endnotes:
(1) New South Wales Government Gazette No.184, 25 July 1919, p.4065.
(2) Report of the Royal Commission respecting the inquiry into the George Georgeson wheat contract, Joint Volume of Papers presented to the Legislative Council and Legislative Assembly..., 1919, Vol.1, p.181, Sydney, NSW Government Printer, 1920.
(3) NSW Government Gazette No.10, 14 January 1916, p.176.
(4) Report of the Royal Commission, op.cit., p.182.
(5) ibid., p.187.
(6) ibid., p.188.
(7) Report of Royal Commission of inquiry into the Administration of the State Wheat Office, Joint Volume of Papers presented to the Legislative Council and Legislative Assembly..., 1920, Vol.1, p.221, Sydney, NSW Government Printer, 1921.