t—l6.

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[it. MYEES

the whole of the risk, and the whole of the responsibility in regard to this undertaking is really being taken by the company, although at first sight and without full consideration it might appear that under the Bill the company would be obtaining some very substantial advantages from the Government. The next point is this: that under the Bill the Government would have the right at the end of forty years to take over the whole undertaking of this company absolutely free of cost and free of encumbrances. That, sir, is a very important consideration indeed, because at the end of the period of forty years —and we must assume, of course, that these people are business men and not going to spend £650,000 for the fun of spending it— presumably this business would be a very flourishing one, and there would be attached to it a very substantial goodwill; and the whole of the machinery and the tramways and other plant of the company and the goodwill of the company's business would pass absolutely to the Government without payment of a single penny. If during the forty years this business had been a profitable one, and if at the end of the forty years the Government found it undesirable to carry on the business, then there would be in the hands of the Government an asset of very considerable value, and the Government would be in the position then to arrange either with the company or with some other concern to take over the undertaking upon satisfactory terms to the Government. The Government Would have in the goodwill attaching to this business an asset the value of which it is impossible to predict at the present time. It might conceivably be worth some millions of pounds. Then, sir, it was pointed out during the course of the previous proceedings before this Committee that there is no provision made by this Bill that the company's plant should be kept in good condition. Might I point out that section 4, paragraph (c), subclause (viii), provides, " The lease shall contain such other terms not inconsistent with the provisions of this Act as may hereafter be agreed upon between the Minister and the lessees." Obviously a covenant to keep the plant in good repair and condition would be a proper covenant. It is a covenant which is inserted in most leases, and would not be inconsistent with the provisions of the Act, and it is certainly a covenant which the Government would require in a contract being entered into under the provisions of this Bill. In order to understand the provisions, of this Bill, and in order to appreciate some of the benefits which, under the Bill and under a contract made in pursuance of it, would accrue to the Government, it is necessary to look at the provisions of the lease under which the Parapara property of 920 acres or thereabouts is held. 4. Is this a copy of the lease? —This is a copy. This is a lease from the Warden of the Karamea Mining District to the Public Trustee as executor and trustee of the will of the late Sir* Alfred Jerome Cadman. It is dated the 15th August, 1905. The lease has become vested in the Parapara Company, and it is one of the properties over which the Ethelburga Syndicate has an option. The lease, sir, was granted for a term of forty-two years, commencing on the 15th August, 1905. I will come now to a very important point, and that is this : that under the lease there is provision made whereby the lessee has the right of renewal provided for under section 138 of the Mining Act, 1898. Now, under that section there can be no doubt about this : that the lessee would have at least the right to renew for a term not exceeding the term of this lease :in other words, the lessee would have a right of renewal of the lease for a term of not exceeding another forty-two years. 5. Mr. Davey.] Are you sure of that, Mr. Myers?—Yes. There is a further point, upon which I am not proposing to express a definite opinion : It may be, sir, that under that Act the lessee of this lease would be entitled to perpetual renewals. I am not giving that as a definite expression of my opinion; lam only saying that it seems to me at first sight to be at least possible to argue that this is the effect of the section, because the renewed lease would have to contain the same provisions as are contained in this lease, including the right of renewal. If that is so, then the lessee of this Parapara lease would have what amounts to a lease in perpetuity. I want to avoid in any way misleading the Committee, and I am only giving that as a possible construction of the section. In any case, the lessee has the right to one renewal up to another forty-two years. In that view of the position the lessee has what amounts to a lease for eightyfour years. 6. The Chairman.] Do you think that was the intention? —Unquestionably I think so. This section .138 of the Act of 1898 deals with mineral privileges and the right of renewal. I think, sir, that probably those gentlemen on the Committee who are members of the legal profession will agree with me in saying that in all probability this lease amounts to a lease in perpetuity, because there is a subsection (7) in section 138—" The foregoing provisions for the renewal of the original term shall apply to every renewed term." Under this lease there is a rental payable. The rent payable by the lessee during the said term shall be £115 yearly, rent being at the rate of 2s. 6d. for every acre or fraction of an acre of the land. The lessee shall also pay a royalty, and the royalty is to be 3d. per ton on iron-ore raised in pursuance of the lease. 7. Limestone pays no royalty?—No, not limestone used for the purpose of treating iron. Now, the next provision in regard to this lease that I desire to mention to the Committee, in order to enable the Committee to understand the benefits to the country under the Bill, is this : " Notwithstanding anything herein contained, or any right, Act, or law to the contrary, the Governor, at any time during the said term or any renewal thereof, on giving to the lessee at least six months' previous notice in writing of his intention so to do, may purchase from the lessee all the lessee's right, title, estate, and interest in the demised land and in this lease, and in all other land situated in the said mining district or on the sea-coast thereof and used in connection with the lessee's mining operations on the demised land, and all the lessee's plant, machinery, appliances, and other property used in or in connection with such mining operations, at a fair value, to be ascertained in case of dispute in the manner following: (a.) The amount of the purchasemoney to be paid to the lessee shall be determined by arbitration under and in accordance with