1.—16.

30

L M. MIKES'

negotiations with the then Government, but eventually, instead of legislation being introduced into Parliament on the lines of the present Bill, a very different Bill indeed was introduced —1 refer to the Iron and Steel Industries Bill introduced in the session of 1911. Members of the Committee will know that that was the last session of the then existing Parliament, and they will also remember that that session began very late and ended very late, and that there was a very considerable congestion of business, 'lhe result was that the Bill of 1911 did not receive very much consideration; but be that as it may, it was not such a Bill as the Ethelburga Syndicate could have accepted, although, sir, I may tell the Committee that from the merely financial point of view it would probably have been a very much better Bill for the company than the Bill which contains their own proposals. However, no legislation was passed in 1911, and the options which the Ethelburga Syndicate had acquired expired. During the present year the option given by the Parapara Company to the Ethelburga Syndicate has been reinstated on precisely the same terms as the agreement of last year, but up to the present time the Onakaka Company has not seen its way to reinstate the agreement between it and the Ethelburga Syndicate. I may say, however, that, so far as the Ethelburga Syndicate is concerned, it. has been and is prepared to allow the Onakaka Company to come in on precisely the same terms as the Onakaka Company last year thought good enough, when it gave this option to the Ethelburga Syndicate on the 4th August, 1911. Whether or not, sir, the Ethelburga Syndicate would carry on this undertaking unless it can acquire both properties lam not at the moment able to say. I think that, as at present advised, the Ethelburga Syndicate would, if the question were put to them at the moment, say that they would not commence and carry on this undertaking unless they could acquire both properties. Before that question was answered finally it would probably be necessary for some representative of the Ethelburga Syndicate to go to the locality and look over the property and make sufficient inquiry and investigation. The Ethelburga Syndicate feels that there is room in this country, and will be room in this country for many years to come, for only one iron and steel works. 1 have already said that if the only market available for the New Zealand works were the New Zealand market these proposals would never be made by the Ethelburga Syndicate —I doubt whether these proposals would have been made even if the Australian market had been available as well as the New Zealand market —and the main reason, the real reason, and perhaps the only reason, why the Ethelburga Syndicate is considering the question of establishing the industry in New Zealand at all is that it is practically certain of foreign markets which probably would not be available to any other company establishing this industry in New Zealand, and which certainly would not be available to the New Zealand Government if a nationalized concern was established. I now propose to show that the whole risk in this undertaking under the present Bill would be the company's. In the first place, the company has to take the risk of being able to manufacture on such terms as will enable it to compete with undertakings in other parts of the world. If it is unable to compete successfully, the works would have to close down, because the shareholders and debenture-holders would never permit them to be carried on at a loss. I apprehend that the contract that would be entered into under this Bill would contain a covenant on the part of the company to continue working and to carry on the undertaking. 8. Mr. Blow.] And would contain a provision for forfeiture in case of failure? —There is provision for forfeiture in the Bill —clause 6: "Such lease shall be forfeitable only on a judgment of the Court of Appeal ... on an application by the Minister alleging that by reason of a breach or breaches of its terms by the lessees the lease should be terminated : Provided that in the event of the Court decreeing that such lease shall be forfeited, the lessees shall have the right of appeal from such judgment to the Privy Council: Provided further tfiat in lieu of declaring such lease to be forfeited the Court may impose on the lessees a penalty not exceeding one thousand pounds for any breach of the terms of such lease." 9. It says "not exceeding" one thousand pounds. They might be fined £s?—But you have exactly the same provision in other titles under the Mining Act. 10. lam aware of the provisions with regard to the lease. Now, you say that the contract would include a provision that would require the company to maintain the output and would involve forfeiture? —Not necessarily to maintain a particular output. Of course, it is a matter for negotiation, because it is not in the Bill. I cannot tell you to what length the company would be prepared to go in the direction of maintaining a minimum output. 11. Hon. Mr. McKenzie.] The Government could not enter into a contract that would be illegal: the contract must comply with the mining law under which the lease is granted ? — Certainly, the contract must comply with the mining law; but there is no reason why there should not be superimposed, if the parties agree, certain obligations which are not in the MiningActs at all. 12. But they are not in the lease? —Even if they are not in the lease, this is a new contract which is being made between the Government and a company, and the Government is entitled to impose any reasonable conditions and covenants, even though they are not in the Bill, so long as they are not inconsistent with the provisions of the Bill, Consequently there is nothing to prevent, by agreement, obligations being imposed upon the company in the contract which are not imposed upon the company as lessee under these leases or under the provisions of the Mining Acts. 13. The Chairman.] 'You are speaking for the Ethelburga Company : could you inform us whether they would be agreeable to terms of forfeiture being inserted in the contract I —l think it would be quite fair and proper that there should be some provision, but I am not able to say at a moment's notice what provisions I think would be fair. That question involves perhaps business considerations with which I am not capable of dealing, because I have not sufficient information to enable me to express an opinion.