65

8.—5

C.—WAREHOUSE ACT. EXPLANATORY MEMORANDUM. This Bill provides for the licensing and bonding of public warehouses storing agricultural products under conditions intended to establish the integrity of their receipts and make these receipts generally acceptable as security for loans. These licensed warehouses are not to be owned or operated by the State, but by individuals or companies as business enterprises. They are, however, to be regularly inspected and carefully supervised by the Department of Agriculture, and this fact will give to warehouse receipts issued by licensed warehouses a superior standing as collateral for loans. The Bill does not. compel warehousemen to become licensed. It is permissive. Any owner or operator of a warehouse may apply for a license, and if the warehouseman and the warehouse meet the conditions required by the Act a license may be issued. After becoming licensed the warehouse must be conducted in conformity with the Act and the rules and regulations promulgated by the Department of Agriculture. Warehousemen operating under licenses must keep records of commodities stored or withdrawn. They must file bonds with the Government. They must file with the Department statements under oath showing their financial condition from time to time. They must maintain their warehouses in proper condition. They will be subject at all times to inspection by representatives of the Department entrusted with the administration of this particular Act. Rules and regulations governing the operation of licensed warehouses will be prepared and promulgated by the Department of Agriculture. The Bill provides a uniform national system of public warehouses for the storage of staple farmproducts, to encourage the storage of such products, and to facilitate the financing of stored products so as to permit orderly marketing. Section 2 : A " warehouse," for the purposes of this Act, may be any building, structure, or protected enclosure in which agricultural products are or may be stored for internal or overseas commerce. The Bill does not specify any particular type of construction, but the warehouse must protect stored products from weather-damage and from damage caused by rodents. Section 4 makes provision for regulations setting out the requirements for licensing—i.e., (a) a suitable warehouse for the storage of the products ; (6) a competent person to operate the warehouse ; (c) the warehouseman must have a good business reputation ; (d) the warehouseman must possess a certain amount of net assets ; (e) he must have such equipment as is necessary to care for the products ; (/) he must be able to weigh and grade products correctly ; (gr) he must furnish an acceptable bond in an amount fixed by the Department. Section 6 : Surety bonds by warehousemen will require to be approved by the Minister of Agriculture, and the amount will be fixed by regulations and be determined by the storage capacity of the warehouse. The Minister of Agriculture will determine the eligibility of a warehouseman for licensing by investigation of the character of the warehouseman, his financial standing, the warehouse and its equipment, the location and surroundings of the warehouse, and the persons who weigh and grade the commodities. Section 10 : The object of this provision is to enable a check to be kept of all stocks in the warehouse, with outstanding receipts, to see if the required amount of produce is in storage for every uncancelled receipt. Sections 14 and 15 apply to such agricultural products as may deteriorate through careless storage, in order to prevent such deterioration, and, if it is unpreventable, that the produce may be dealt with so as to occasion the minimum of loss. Sections 16 and 17 : A warehouse receipt is the farmer's contract with the warehouseman. It is evidence that the produce has been deposited in the warehouse, and of the terms under which the goods were deposited, the condition and description of the goods, and the conditions upon which they will be released. Such a receipt would give the location of the warehouse in which the products are stored, the date of issuance of the receipt, and the consecutive number of the receipt. It would state whether the products will be delivered to the bearer of the receipt, to a specified person, or to a specified person or his order. It would give the rate of storage charges, a description of the agricultural products, showing the quantity and any identification marks or numbers, the weight and the grade, as well as the standard by which the grade is determined. It would state that the receipt was issued under the Warehouse Act and its regulations, whether or not the warehouseman had any interest in the product, what advances had been made or liabilities incurred by the warehouseman for which he claimed a lien on the stored goods, and whether or not the product was insured. It would give the name of the warehouse, the signature of the warehouseman, a statement as to whether he was incorporated, and such additional terms as the Minister of Agriculture might from time to time prescribe. On the back of the receipt there would be a statement of encumbrances and liens on the stored goods. It would also state the maximum period for which the goods could be stored. It would be open for the depositor at the conclusion of his contract to enter into a new contract with the warehouseman. Section 18 : Such standards as have been established by the Government must be used to state the grade. Where such standards have not been devised the Minister of Agriculture would recognize such other standards as he considered proper. Section 19 : Only one original receipt is permitted. If a receipt is lost or destroyed, a duplicate receipt may be issued by the warehouseman only after the owner of the receipt files a certain statement with the warehouseman, and furnishes a bond (to be determined in the regulations) in relation to the amount of the value of the commodity represented by the lost receipt.

9—B. 5.