71

C—B.

Mr. Macdonald : What is the meaning of this ? Mr. Macarthy: The meaning is this : That the Mokihinui Coal Company had ceased operations for a time; that Straw was engaged there and had to be kept on. The general point is to show that the interests of the Mokihinui Coal Company were probably materially affected by Mr. O'Conor's connection with the sawmill. [Letter from Straw to Wright, 22nd September, 1888, put in. Also letter, no date, about "collar and hames." Also letter, O'Conor to Straw, 11th May, 1888.] Now, Mr. Straw, will you explain what was done to employ you on behalf of the sawmill property. Did you accept the position ?—No, sir. Why not ?—After Mr. O'Conor told me that, I said that I did not care to have anything to do with it, as working for two masters was not satisfactory. He said, "It will be all right; it will give you £1 a week." In a day or two one of Marris's sons came up who was in charge of the mill, and I told him that Mr. O'Conor had told me something about looking after the mill, and he said, " We would rather find our own man ; and, in fact," he said, " we have arranged with George Coleman." Mr. Macarthy: I put these things in to show that the rule laid down by Mr. O'Conor that directors should not be connected with other companies had not been observed by him. The resolution I read from the Westport directors goes to show that the business of the sawmill company had been mixed with that of this company. I will now take the question of the prospectus and the matters arising from it. The first point is as to my name appearing on it as a director. The minutes will show that I only became a director in February, after the issue of the prospectus. [Mr. Straw here left the room.] The prospectus says, " The capital has been expended in opening the mines, and in the construction of a railway connecting them with the Mokihinui Eiver ; in the erection of a wharf and coal-staiths ; also in providing plant, locomotivetrucks, weighbridge, screens, &c." To read that you would think they had a title to the wharves and coal-staiths, whereas there was no title. [Gazette put in, 19th August, 1890, with Order in Council.] The second paragraph of the prospectus says : " The property consists of about 1,800 acres of coal-bearing Crown land, held under lease and application, a small part of which is estimated to contain 3,000,000 tons of coal. The term of lease is sixty-three years, the rent commuted to a royalty of 6d. per ton. The company have a concession of wharfage sites, and the right to charge 2s. 6d. per ton on goods landed or shipped. A reserve has also been made for the company's benefit of 2 chains of land in width along the company's railway." Of this area, one lease of 160 acres, to be shown to you, is worthless, and it was known to be practically worthless for coal-mining purposes at the time this prospectus was issued. Mr. Macdonald : By whom was it known to he worthless ? Mr. Macarthy : The directors, I presume. No work was done on it. Mr. Miles: Do you say that part of this property, which was offered to the public in that prospectus of 1889, had no title to it at the time it was offered ? Mr. Macarthy: That Gazette notice gives you the particulars as to the title. [See Gazette, 19th August, 1890.] Coming back to the 160-acre lease, I say that at the time that prospectus was issued working for coal on that land had been stopped. The manager (Mr. Straw) will tell you that it was of no value to the company for coal-mining purposes, although the company was in this very serious position, that at the time the first two miles of the railway was constructed this lease was attached to the railway, and if the company abandoned the lease they must necessarily abandon the railway. We have been unable to continue working that lease and to comply with the conditions as to output, although we have been notified by the Minister that we would be required to continue the work. The other lease, 593 acres, we leave in abeyance, but lam under the impression that Messrs. Bayfield and Eowland had prior applications for the balance of the area referred to in the prospectus. Notwithstanding which the Wellington directors subsequently obtained a lease of 960 acres, and have it now. [Map put in, also letter from the Marine Department, 20th August, 1890, in reference to the wharf and coal-staiths.] Mr. O'Conor, who had just entered the room, desired to see the letter from the Marine Department. Mr. Macdonald : After Mr. O'Conor's conduct in taking away other documents, I do not think I am justified in letting him have any others respecting the affairs of the company. Mr. Macarthy : I say that the references in the prospectus to these leases and to the erection of a wharf and coal-staiths were seriously misleading, and had the shareholders in Wellington taken legal proceedings it would have been a serious matter to Mr. O'Conor and the other directors. In fact, the two miles of railway being constructed without a title, and the necessity for proper memorandum and articles of association, most seriously retarded the efforts of the directors to develop the company's business at Mokihinui. Mr. O'Conor : I protest against this inquiry. I have not been supplied with notes of the proceedings ; and what has this to do with the charges ? Mr. Macdonald : I have to say you were allowed every opportunity to open and state your case, and I will not allow you now to interrupt the proceedings. Mr. O'Conor continuing to address individually several gentlemen present in angry terms, Mr. Miles moved, "That, owing to Mr. O'Conor's disorderly conduct, the committee do now adjourn." Mr. Macdonald : This meeting stands adjourned. The inquiry was resumed at 7.30 p.m. Mr. Miles : When we parted last it was. on my resolution that, owing to the disorderly conduct of Mr. O'Conor, and seeing that it was impossible to transact any business while he seemed to be so fully determined to interrupt the proceedings, we should adjourn. We decided to adjourn until this evening. Now that we are met I hope the directors will be prepared to sit here until we have