THE MOKAU INQUIRY.

Dominion, Volume 4, Issue 1226, 7 September 1911, Page 8

THE MOKAU INQUIRY.

CONCLUSION OF MR. HARDY'S EVIDENCE. AIR- M'NAB MAKES' A STATEMENT. VALUE OF THE BLOCK. The Native Affairs Committee yesterday continued the Mokau Inquiry. Mr. AY. T. Jennings (chairman) presided. Other members present were Sir Jas. Carroll, the Hon. A. T. Ngata, Dr. To Eangihiroa, and Messrs. B. Dive, W. H. Herries, T. Tarata, F. Mander, and T. E. Y. Seddon. Messrs. W. F. Massey, F. G. Dalziell, and J. Jones wero present. The examination of Mr. E. H. Hardy was continued. To Mr. Dive witness silted that he was adviser to the Natives who had-at first refused to sell their land. He had neither advised them to sell nor to reject the offer. They had never asked him whether it was advisable to sell or not. The reason ho had not advised them to accept, seeing that ho thought .the price ottered was more than the land was worth, was that ho did not desire to prejudice them ill any way. In his opinion, tho Mokau Block was not suitable for closer settlement. Indircctly ho had opposed the sale most unmercifully, because tho Natives at the start did not wish to.- sell.' Upon getting the additional offer of. .£2500 worth of shares, he still did not directly advise the Natives to sell. , To Mr. Herries: If the Natives had been able to raise tho .£BOO he did not think they would have consented to sell. Certainly he ' would not have advised them to sell. At one meeting of assembled owners, Mr. Dalziell spoke of withdrawing the o(Yer. It was not a threat. Mr. Andrew Eketone seemed to object to tho statement. Practically, the Natives, not being able, to raise the «£SOO, had to sell by way of making tho best of a bad job. The ,£2500 worth of shares were fully paid up. The idea was to hold them as-an investment for the Natives. ' If the company failed it would bo .by reason of tho fact that the land was not as good as it was made out to be. In that case, the Natives wonM have no ground for complaint. The share wero not intended as an extra inducement. They were, intended to as--suaga tho sentimental rojjrct of the Natives at parting with their lands. "Witness had had considerable experience of Native land dealings. He had never heard of an Order-in-Council being issued to override the limitation provisions of the Act. Neither had ho heard of laud purchased being vested in the president of tho Maori Land Board. He had arranged with the company that it should assist towards the expenses of the transaction with • an amount not exceeding .£IOOO. The legitimate expenses would como to about .£I6OO. He had told Mr. Bowler that lie did not approve of tho deduction of leu per cent, ot tho .£25,000, and he had not. made any claim upon this amount. He arranged with Mr. Lcuglrnan ill Palmerston in regard to tho .£IOOO on March 17. There was an honourable understanding with his fellow-mem-bei's of tlie committee that this matter of ,£IOOO should not be pressed upon the attention of the Natives, lest it should be regarded _ as an extra inducement. To the chairman: Ho did not know what the Natives wero getting from the lessees prior to tho, sale. Ho understood that it was a farthing an acre. Ho was quite sure that'the Natives for whom he had acted owned other lands outside this block. Boad fonnation on the block would bo very costly indeed. The withholding, of this block from settlement had been a great blow, to the country for years. It would bo a soiirco of gratification to residents to know that these lands were going to bo cut up. As a result of the block being opened, access would be afforded, from Te Kuiti to tho sea. Tho block as a whole, unencumbered, would not bo worth more than <£1 an acre. Mr. Massey quoted from a letter from a settler named Jackson, in which the writer stated that the Mokau Estate consisted largely of easy country, of magnificent. quality. He believed that few people realised the enormous quantity of coal in it. Reefs 18 feet thick were numerous. Witness said he did not agree with this opinion. - Not only the valuo of tho land had to be considered, but the difficulty of access. Mr. Massey was proceeding to quote from a newspaper article on Mokau when Mr. Ngata protested. After some discussion, tho chairman ruled that the quotation was irrelevant. Mr. Massey said Ik, would call '.ho writer (Mr. Cowin). "Our Share," further examined, stated that the sum of ,£IOOO mentioned had been paid into a suspense account under his control. It was intended to cover- agent's fees and law expenses. This .£IOOO was apart from the ten per cent., nart of which had been collected. Ho had explained to the Natives that "our share" would be less than four per cent. By "our share" he meant agent's expenses. Ho had the .£IOOO, but he had not. the ten per cent. He had refused to have anything to do with this. No attempt had been made,.with his sanction, to raise it. Ho did not think it had been possible for the Natives to sell to the Government, directly. He did not know that a gentleman up there had obtained a commission of .£IOOO on account of a sale to the Government. The Natives could not have insisted on tho covenants in -the leases being complied- with without the matter going throngh the Courts. "To An Outside Company." Mr. Massey: "I can't understand how it was that you went over the head of Mr. Dalziell and over tho head of Lewis and went to aii outside company in Palmerston." Witness said ho had gone to Palmerston as a result of his interview with Mr. Whyte. Mr. Macdonald had never said that 75 por cent, of the owners were opposed to the Sale. He did not agree with the statement if it applied to owners, but did if it applied to places. Mr. Massey: On March 7 Mr. Macdonald wired yon that Mr. Bell was not required °—I may not have got it until March S.' Before Mr. Bell's telegram reached you in. which ho said that he preferred to stay in Wellington, had you and Mr. Macdonald decided that it was not necessary for him to conie?—l don't know, judm from the' telegrams. The question being repeated, witness ho did not draw any conclusions. Mr. Massey: You had made up your mind that- Mr. Bell would not bo" required ?—No. Theil Mr. Macdonald had made up his mind?—l don't know. The telegrams showed tho times and would speak for themselves. _ .Mr. Dalziell was permitted to put a question. Ho asked witness: In reference to tho question of damages Mr. Hardy, could you toll us it .tun were advised that you could claim damages ? Witness: Yes, they claimed ,£IO,OOO damages for failure to complywith the terms of the lease. The Natives were informed of this. Questions by Mr. Jones. Air. Jones now ynsked leave to put a question pointing ojit that Air. Dalziell lia.d been permitted to rlo so. The chairman: Air. Dalziell is hero by permission of the committer. Mr. Jones: So am I. The chairman: I am not aware of that. Kir James Carroll: Yes, that is so. Mr. Jones then asked witness: Are you aware that by order of the Court the shares in the land wero all equal?—l don't know. The matter was safeguarded by the president, of tho Uard. - "Mr. Jones said the chairman had put a question as to whether the British Board of Trade had not sent out an engineer to examine the block. Did witness know of this? —No. Air. Jones said that he wanted the committee to understand that the ehairman had put. a question for which there was no foundation. Tho Board cf Trade had not sent out anybody. Mr. Jones: Aro you aware—there has been a lot of talk about Ah'. Dalziell and Mr. Skerrott—that I hey nppenred before this committee' iu 10J0 as representing this company? The chair.iuin: I don't think that has any bearing on tho inquiry. Mr. Jones: You have staled that the coal on this property is valueless in a measure ai compared with the other side.

'Die witness said tliit, economically speaking, tho coal was not worth much. Mr. Jones put a number of other questions abnut the coal deposits. Finally the chairman asked the committee to determine whether he should be allowed to continue. Mr. Seddon: What is the object of these questions? The chairman: I don't know. Sir James Cirroll: lie rcpeseuts Mr. Massey. Mr.' Massey denied that anyone represented him. The chairman suggested that Mr. .Tones might bring forward the information ho desired when he was himself examined. Statement by Mr. R. M'Nab. The next witness called was Mr. Robert M'Nab. He stated that lie w-ished to give evidence in connectiou with tho statement made by Mr. Massey in his speech at Auckland regarding tho Mokau-Moha-katiuo Ei-jck, in which ho mentioned witness's name. From this statement the inference had been drawn that he had acled with Sir John Findlay and Sir James Carroll to bring about tho purchaso of the block by a company of which he was now chairman, and ho wanted to givo evidence to negative tho suggestion. 'lne, first knowledge he had of the sole of the Mokau Block was on January fi. He was in I'almerston North, and met Mr. Whyte, a land agent of Hawkes Bay, and Mr. Masou Chambers. They spoko of the purchase of the Mangapapa Block on the other side of the river from Mokau. Mr. A\ hyte stated that Mr. Mason Chambers had secured an option over what was known as the Mokau Jones Block. About an hour afterwards, when he reached his own homo, Captain Priest, a laud ajjeut in Palmerston North, waited upon hiiu and introduced himself as agent of an option holder in the Mokau-Mohakatino Block, and asked him if he would care to take up shares in it. Witness told him he miist be in some mistake, as ho understood that ail agent from Hawke's Bay had tho option. Tho agent stated that he would see witness again. He (witness) then went stjuth. The next communication he had in regard to the block was a. telegram from a land. agent named J. 11. Johnston on January 18. The telegram stated that Mr. Masou Chambers had secured an option over the Mokau-Mohakatino Block and was putting that option in with another by Mr. Eraser for what was known as tho Mokau coal mines, situated in Mangapapa, and that .tliey were going to float a company to work tho property. When ho,returned to I'almerston Messrs. Johnston and Whyte spoke to him, on or about January 24, about it, and asked him to take up shares in tho company. They produced a roughly drawn prospectus. He agreed to take up a thousand Shares iu the company. The capital was to be .€IOO,OOO in JCIO shares. His object was to purchase the two properties, if they were considered satisfactory. A document was drawn up by Mr. Longhnan wherein Mr. Mason Chambers and Ml'. Fraser entered into a contract with Mr. J. jr. Johnston and Mr. D. Whyto to bring about tho flotation of the company to take over their interests. The document was dated January 27. It provided that tho price for tho freehold of the Mokau Block was XSI.OOO for -IG.OOO acres. Tho price to be pa.id Mr;, Mason Chambers for tho leasehold option if he could not provide a freehold tit.lo on the day of flotation was .EoG.GOO. Tho document provided that £15.000 should be paid for the niine. This had a bearing on tho amount of shares given to the Natives. Mr. Fraser also had an option over two steamers, the Tainui and the Manukau. Tho agreement had been executed in duplicate. Witness put in one copy and stated that the copy of the agreement retained by the company bore the following further memorandum "In consideration of tho within-iiien-tioned Hermann Lewis granting certain extended timo for the completion of tho within-recited option," and in consideration of the said Hermann Lewis agreeing to hand over to the company all offers, options, and other documents relating to the property, we, the vendors, agree to the issue by tho company to TJiomas Mason Chambers, of an additional 400 shares of the nominal valuo of ,£lO fully paid up,' to be held by the said T. M.Chambers until tho completion by tho said Hermann Lewis of his undertaking aforesaid." Total Price £85,000. This made the total purchase price ,£85,000.! The company was registered on March 18, and he was appointed chairman. Tho first meeting was held on March 29. On April 15 a resolution was passed authorising tho payment to Mr. Mason Chambers of ,£85,000. Witness put the following account in evidence:— The Mokan Coal and Estates Company, Ltd., in account with T. 11. Chambers, Esq. Dr.: To purchase mon;y of MokauMoiialratino Block, >£85,000. Cr.: Paid Travers, .Russell, and Campbell, first and seoond mortgages, .£44,221 Is. Gd. Paid Maori Maniapoto Land Board, J52500. Paid Survey Liens and other encumbrances cleared, .£I4G9 Bs. 3d. Paid cheque to Findlay, Dalziell, and Co. for balance due to Hermann Lewis, .£3809 10s. 3d. Shares held by T. M. Chambers, .£BOOO. Shares to Maori Land Board, JU2500. Total, .£85,000. Witness continued that mention had been made of a mortgage to certain named parties, of whom ho was one, and apparently it was not fully explained to the committee. When they made their arrangements with the bank they paid Sir. Mnson Chambers in cash and fully-paid-up shares. To enable tho largo sums to be disbursed, arrangements were made under which some of the directors guaranteed the amount. Some ef the guarantors asked that, before signing tho guarantee, they should get security in tho event of the bank calling upon them to pay. Tho directors thought the request reasonable, and made arrangements for a mortgago to be executod guaranteeing the directors. This was done at the meeting in Dannevirke on May 11. The chairman, one director and the secretary wero authorised to issue a memorandum of mortgago and mortgage debenture, giving security to tho guarantors or the bank in respect of all financial accommodation required. He presumed this was the mortgage nhich had been mentioned. To Mr. Herries: The amount of the mortgage, ho thought, was ,£75,000. During the whole time he had not had any communication with any member of tho Ministry, either Sir John Findlay or Sir James Carroll, and had never discussed it.with any of them until after tho statement was made by Mr. Massey, when he asked when the Committee was going to be set up. No person was authorised by tho company to represent them before tho .Natives in any transactions with tho intermediate buyers in coming to. any settlement. Mr. Ngata: Wero you ever approached by any of the Natives or by anyone acting for them prior to. the company acquiring these options?— No. ' Witness added that he had had no direct communication that ho could recollect with Hermann Leivis until after the sale was over. Mr. Ngata: Do you know anything about this payment of JC2500 worth of shares to the Natives? Witness understood that it was something that had cropped up after tho vendors had made their calculations. Ho had .heard them complaining of having to pay it. Mr. Ngata: "In arriving at the valuo of .£85,000 for the freehold, how was the company advised?" Witness said he had personally been influenced by the opinion of Mr. Mason Chambers and that of Mr. Fraser. The shares to tho Natives were shares in the company. If they did not hold an interest in the mines then neither did he nor Mr. Mason Chambers. "The Inference Conveyed." To Mr. Seddon: The inference convey-' cd to him by people reading what had appeared iu the newspapers and coming to him, was that, by somo means that he should not be proud of. he had brought about a condition of things in which he held a property that was going to return a large profit and that, as ho had been formerly n colleague _ of tho two "entJeman mentioned, this relationship had brought it about. He took it that, this was the infcreuco that tho public were drawing. To Mr..llomas: The total amount paid for the two properties was 4:130,000. The chairman of the Maori Land Hoard now held the title. So Mr. Longhnan had informed him. .Air. Herries: Did you know of that arrangement when you became cluijrinan of tho company?— No. Ho came to know about it 011 June 13 or a day or so after. Mr. Uerries: Do you know when tho mortgage was signal from tho president of the Maori Land Board to yourself? Witness said it would be alter May 11, but it appeared that ho was referring to the mortgage from the company guaranteeing the liability of the directors, Mr. Herries: The president of the Maori

Lm<] Hoard mortgaged the property to a number of people, anion# whom was yourself. Do you l:now anything about it? Witness: No. It wa> probably nil arrangement of the conveyancing men when the transfer was being signed. The company had no title and had to cut up the land inside three years. The company had acccptcd the assurance of its solicitors that everything was in order. Mr. Uerries: Has Mr. Bowler got any shares?—No, unless Mr. Mason Chambers or some other gentleman has transferred them to him. Mr. Herries: I see tho name E. K. Bowler?— That is a solicitor in Gore. To Mr. Jennings: ]Ie remembered only vagnelv an anplicntbn for the purchase of this block'while he was Minister for Lands. Retaining the Minerals. To Mr. Alassey: The freehold interest in, the block had been purchased in tho first instance, under authority of an Ordcr-in-Couneil, by Mr. Hermann Lewis. It had then been sold to Mr. Mason Chambers, and the latter sold to the present company. Tho company had paid .£85,000 in shares and cash. Jtr. Massey: You say the area you purchased is 40,000 acres. Are you aware that Mr. Hermann Lewis purchased tho whole block of 53,000 acres? Witness: I understood that lie had pur-, chased more than was disposed of, and that he only disposed of what was outside of occupation by tenants. Mr. Alassey: Then he npparenly kept TOOO acres for himself?— Yes. Mr. Massey: My point is that in calculating the value of the block we have to add the value of the 7000 acres to tho .£85,000 paid. Witness: I see that. To Mr. Massey: Tho sale to Hermann Lewis was confirmed on March 22. Tho company was formed some time before Mr. Hermann Lewis received his title. Mr. Massey: Does the company intend to develop the minerals in Iho block? Witness: No decision has been come to about the minerals. At. the present moment the Scenic Board had issued a proclamation in regard to a belt along the river bank for something like 30 miles. Ho had asked that acccss should be left from the sections to the river, and this had been agreed to. In regard to the minerals tile directors had never considered the question at all yet. The company was also a mining company holding an interest in the mine on the oth?r side of the river nnder a 40 years' Icass. He presumed that they would at anv rate retain sufficient minerals to ensure the working of the company. Witness said a statement had appeared that the company had purchased an additional area of 17,000 acres. What tliey had purchased on the other side of the river (from tho Mokau-Mohakatino Block) was a lease for 42 years of the surface rights of 1400 acres with the coal mine on it. Over the remaining 12,000 acres they held coal and ail rights for 42 years To Mr. Jennings: Surveyors had been working on the block for the last, three months and the eutting-up should bo completed by March 31 next. The c-ommittco adjourned until 10.30 a.m. to-day.