1.—16.

44

[j. H. WiTHEFOKD.

35. The Onakaka people were to get 35,000, and the Parapara people 100,000 : that would leave 215,000 fully-paid shares, assuming they were fully paid. I want you to explain to the Committee whether or not your company is being overwatered, which may have a possible effect upon the profitable carrying-on of the work. ?—Absolutely not. You are on the wrong track altogether. I have had considerable experience in financial matters in London, and I consider that the proposals of the Ethelburga Syndicate are very moderate. The Onakaka people are getting £7 in shares for every £1 they have put up. The Parapara people have paid about twice or three times as much in development-work as the Onakaka people, and they have done a great service to New Zealand, because they have proved the existence at depth of enormous bodies of ore on their lease, which will be a valuable asset to this country. The Onakaka people, as far as I know, have not done so; 1 cannot find out that they have been driving tunnels and doing the work that the Parapara people have. I say the Parapara people were entitled to receive 'for their interests and rights a larger proportion of the shares than the Onakaka. The Onakaka people have spent not more than £5,000, and they get 35,000 shares. The Parapara people have spent £40,000, and they get 100,000 shares. The people in London are going to put up £650,000, and what do they get? If they got the same proportion as even the Parapara people they would get 2,000,000 shares; and all there is for them to work upon is this 350,000 shares, of which 35,000 go to Onakaka and 100,000 to Parapara. You must take into consideration the enormous risk these London people are running, and the thousands they have spent already in various ways and expert advice of the most eminent iron and steel authorities in Europe. Yet they are begrudged a possible amount like this, that does not represent anything like the proportionate amount which the people here are getting. 36. Assuming you are getting £350,000 in fully-paid shares and £100,000 of the debenturemoney : do you still consider that this company is not being somewhat overloaded? —That is not a correct assumption. The statement of the Ethelburga Syndicate was that they would spend £650,000 on plant alone, and experts say they will have to spend another £200,000. 37. You say they are not getting- an unfair proportion if they get 215,000 fully-paid £1 shares and £100,000 of the debenture-money?—l consider the terms are wonderfully favourable to the Dominion. It is only because they have markets in South America and can dispose of the steel rails and other surplus products that they will look at the proposition. 38. Hon. Mr. Fraser.] If the Onakaka people are to get 35,000 paid-up shares, that assumes they do not pay anything for them—they get the shares fully paid up given to them?—l think that is it. 39. One hundred thousand paid-up shares go to the Parapara people?— Yes. 40. And 215,000 to tho Ethelburga Company. Are they all paid-up shares that are given to those people ?—I cannot answer- that. 41. I suppose you know something about the initiation of this company, do you not? —Yes. 42. Who is it intended shall find the capital if the whole £350,000 is paid away in paid-up shares and nobody subscribes anything? —Before I left London the general manager of the company told me that they had arranged for the whole of the required capital. He mentioned how it was arranged. 43. You mean for the £650,000?— Yes. 44. How was it arranged —by debentures? —Yes. What allocation they make in the division of the shares I cannot tell. 45. How many debentures are they going to raise? —They have £650,000 provided. 46. Upon what security do they raise those debentures?— The security would be the industry • —the plant and the capital. 47. You tell us that 100,000 paid-up shares are to be given to the Parapara Company ; 35,000 are to go to the Onakaka people : then there are 215,000 paid-up shares also. That means that the whole £350,000 capital of the company consists simply of paid-up shares, on which not one shilling has been paid. Is that the case or not?—-I must refer you to the lawyer. Mr. Myers: All these questions were put to me yesterday. Ido not know, and neither does Mr. Witheford; and why he does not say at once that he does not know I cannot understand. The position is this : 100,000 paid-up shares go to the Parapara Company Hon. Mr. Fraser: Which means no capital. Mr. Myers: Except the properties. The consideration given for those shares is the properties. The value of those properties I went fully into yesterday before the Committee. Then, 35,000 shares go to Onakaka, for which the properties would be transferred. That accounts for 135,000 shares. As to the other 215,000 shares, I have no knowledge whatever as to whether they are paid-up shares or whether they are contributing shares, or how many are of the one class or how many of the other, and neither has Mr. Witheford. Hon. Mr. Fraser: And there is nobody here who can tell us? Mr. Myers: No, sir. But when I was asked the questions yesterday I respectfully submitted that all these questions might be relevant at a certain stage, but they' do not very much affect the matter at this stage, although if the Committee make a favourable report and suggest that an Empowering Bill be passed into law, all these questions would have, no doubt, to be carefully considered by the Government. What I say is that we cannot carry that aspect of the matter any further now, and all the questions in the world cannot obtain the information from Mr. Witheford any more than they could from me, because neither of us has the information. 48. The Chairman.] Mr. Witheford, have you anything material to add to your evidence? —I would like to say that on account of the Ethelburga people I had the assurance of the High Commissioner in London that legislation had been arranged which would satisfy and enable the Ethelburga Syndicate to go on with the business, and this letter was sent from the New Zealand Government and a copy sent to me, viz. : " Westminster Chambers, 13 Victoria Street, London