NAURU ISLAND

Hokitika Guardian, 15 January 1921, Page 4

NAURU ISLAND

For innumerable ages past the habitation of countless sea birds, the island of Nauru has suddenly become a place of international importance. Discussion has raged round it in the councils of the nations, and it has been added to the many other valuable assets of the British Empire. How valuable an asset it is may be gauged from the words of Colonel Leslie Wilson, the Parliamentary Secretary to the Ministry of Shipping, who, as the Minister in charge of the Nauru Island Agreement Bill, said recently in the House of Commons:—“There never was a more sound investment for the Empire, not only from the financial point of view, Imt also from the point of view of securing for all time an all-important raw material for the rejuvenation ot our land, the demand for which is made now to a very large extent, and a demand which must inevitably increase ns the years go by." In 1019 it was apparent' that there was going to be a general shortage of wheat throughout the world, and the tendency to exhaustion of the new soils of the world meant a largely increased demand for phosphates. Germany had maintained her agricultural production with the aid of large quantities of phosphate manuies. In ""fact, in 1013, she used no less than 3,500,000" tons, including basic slag. In 1913 tbe United Kingdom used 743,000 tons of phosphates, and it was suggested that if a policy of increasing the area of arable land was' to be pursued that amount would have to be nearly ■ doubled. Canada and South Africa have also increased their demands. The production of superphosphates has been ; greatly facilitated by numerous acid ‘ plants erected in the United Kingdom 1 and the Dominions for munitions put-

poses. Details of the history of Nauru are not generally familiar. It was also known at one time as Pleasant Island, and is situated to the west of the Ellice and Gilbert islands, south of the Marshall Islands, and to the north-east of the Solomon Islands. It is within a degree south of the equator, and is about eight miles square. The island may he described as an uplifted coral atoll, the highest point of which is about 100 feet above sen level. Dejecta of the innumerable birds who have made it their resting place for ages has permeated the coral rock to a considerable depth—something over 40 feet. The island was discovered by Captain Hunter in 1798, and was annexed by Germany in 1888. At the outbreak of war it was administered as part of the .Marshall Islands, and on September 9, 1{)14, the island was unconditionally surrendered to 11.M.A.5. Melbourne. Enter—on September 17—it was included in the capitulation at Rnbnul. At the request of the Government of Australia, the administration was then undertaken by the High Commissioner for the Pacific. ' There are some 1709 indigenous natives of the island, and they are said to he an extremely handsome, intelligent, and Christianised race. They have, since the capitulation, expressed their keen desire to remain under British rule, being aware probably of the advantages which accrue from British rule, from tlieir neighbours in the Ellice Islands. During the war they petitioned the King to be allowed to remain under his rule. During the discussions at Paris preliminary to the Peace Conference, it became clear that tlie mandate for Nauru would come to the Brit,sh Empire, ami the question of the future administration of the island became a subject uf conversation between the Dominion representatives who were interested. Nauru is practically a rock of solid phosphates, and the Dominions Royal Commission report of 1917, pointed out how dependent the Empire was on foreign sources for supplies of phosphates. The rock phosphate found in Nauru is not generally applied in its crude state. It is converted into superphosphates by means of sulphuric acid. As illustrating the demand for the product it may be mentioned that the average net imports into the United Kingdom from 1909 to 1913 were 487,000 tons, and the exports of superphosphates during the same period were 121,000 tons, the chief customers being Australia and New Zealand. These phosphates came from Florida and North Africa, and were from lower grade ores than are found at Nauru. The existence of phosphates at Nauru was not discovered by -Mr A. F. Ellis, of the Pacific Islands Company, until 1900, only 20 years ago, and the first estimate of the quantity visible was put down at some 42,000,1X10 tons. In 1913 a German mining engineer, Karl Elsclnier, made a report, in which he said that the phosphate area was over 1800 hectares, and the average contents at least 12 tons per square metre. If that estimate he accepted it means that there is a minimum of 216,000,000 tons of phosphates. There are, however, even more optimistic figures. The Interstate Commission’s report of 1918 referred to a German estimate of 300,000,000 tons. A report rendered, to flu* New Zealand Parliament indicated that the amount visible at the present time is at least 80,000,000 to 100,000,000 tons, and this may he taken as a fairly reliable estimate. A concession to work the phosphates at Nauru was granted by the German Government in 1905, and it was to continue for 94 years from April 1, 1906. It was given to the German company then mining the phosphate, known as Jaluit Gesellschaft, and it gave the exclusive right of exploiting the guano phosphate deposits in the Marshall Islands Protectorate. This concession, with the consent of the German Government, was transferred to the Pacific Phosphate Company, the successors cf the Pacific Islands Company, by agreement dated January 22, 1906. This company also owned the mining rights in Ocean Island, which has an area of only about two square miles and a population of some 600 natives. Ocean Island has since been brought within the scope of the Nauru Island agreement. The phosphates in this island extend to an even greater depth than in Nauru, 57ft being knoiy.n. The same German engineer, Karl Elsclnier, estimated the amount, of phosphates visible in Ocean Island at about 15,000,000 tons. An agreement was concluded with the Pacific Islands ■Company for the mining rights of Ocean Island for 999 years from May 3, 1900. After the formation of the Pacific Phosphate Company this agreement was altered to

a license, which was issued to the new company in 1902, to run for 99 years | from January 1, 1901, so as to coincide, i with the period of the Nauru conces-! sion. It was decided by the British Government and hv the dominion Governments concerned to buy the company out, and article 7 of the agreement shows that “any right, title, or interests which the Pacific Phosphate Company or any person may have in the said deposits, land, buildings, plant, and equipment” shall he converted into a claim for compensation at n fair valuation. The sum of £3,500,000 was finally agreed upon as fair valuation, and for this sum the three Governments acquired the full benefit of both concessions and of all leases and other rights, and also the offices in Melbourne, Sydney, and Adelaide, buildings and piers in the islands, and an extensive system of tramways, machinery, power, electric light installations, boats, gear, etc.

The original Pacific Phosphate Company was registered on April 18, 1902, witl*i a capital of £250,000, of which £200,000 was allotted to the Pacific | Islands Company, which was the forerunner of the Pacific Phosphate Company. The capital was increased to £500,000 in 1909, to £875,000 in 1010, to £975,000 in 1912, and in 1914 the authorised capital was increased to £1,200,000. Tlie last amount consisted of ordinary fnlly-paid-up shares, with the exception of £375,000 £1 shares, of which only 10,s had been paid, and 225,000 preference shares, which had not been called up. There were some holdings by Germans; hut these were sold by the Public Trustee in 1917. Before the war, with a nominal capital of £1.200,000, the company paid anything between 25 and 50 per cent. During the war, owing to reduced ship-, incuts, it did not pay dividends as large. The German shares, which were bought by British subjects, in 1917, fetched £574,818, and at that time the company was paying about 7 poi cent. No actual valuation, it is stated, was made when the purchase price of £3,500,000 was decided upon, as the principal factor in the case, namely the future price of phosphates, which constitute the bulk of the company s assets, was - necessarily conjectural. The Nauru Island Agreement was signed on July 2, 1919, by the Prime Ministers of the three Governments concerned. The agreement is not one which, in the opinion of the British Government, requires to be submitted to the Council of the League of Nations, because it is held under resolution of the Supreme Council.