Taranaki Ironsand.

Taranaki Daily News, Volume LV, Issue 57, 25 July 1912, Page 5

Taranaki Ironsand.

BRITISH CAPITALISTS AND HARBOR BOARD. THE OTHER SIDE OF THE PICTURE. BOARD'S COMPLETE REFUTATION OF CHARGES. In Tuesday's issue we reprinted from the Wellington- Times an article from its London correspondent in connection with the Taranaki ironsand leases. In it, a Mr. T. Donne made several serious charges against the New Plymouth Harbor Board for its treatment of his application for ironsand rights, leading one to suppose that the Board had systematically blocked all effort to establish a large and important industry in our midst. Mr. Donne was described as a man of very considerable weath, a big proportion of which he was prepared to expend in Taranaki and its ironsand. Judging by the statements contained in the interview, he has, after great trouble and expense, solved the question of successfully treating the sand and only wants the opportunity to demonstrate the success of his process. The chairman of the New Plymouth Harbor Board (Mr. J. B. Connett) put the other side of the question to us yesterday. He kept nothing back, his desire being to place before the public the true facts of the case and to leave it to the public to judge as to whether the Board had not acted properly and in the interests of all parties. In the first place, Mr, Connett explained that the Board had never heard directly from Mr. T. Donne. The Board had, however, been in communication with a W. G. Dauncey, C.E., M.E., of London, who, it had transpired, was associated with this Mr. Donne. The correspondence from Mr. Dauneey was marked "Private and confidential," but he was not treating it so, as the letters ■had evidently been placed before the New Zealand reporter in London, and therefore Mr. Connett felt no diffidence about furnishing us with copies of the correspondence. Indeed, since ex-parte statements had been made, it was necessary, in order to enable the public to fully grasp the position, to publish the matter. The first'time they heard of W. G. Dauneey was in February, 1010. A letter dated November 25, 1909, was received from him, but it did not reach the Board till February, 1910, it being replied to the following month. It was necessary to give these particulars, because Mr. Donne, in the newsr paper article, complained of the dilatoriness of the Board in acknowledging this letter, which was as follows: To the chairman, Hartor Board, New Plymouth.

Dear Sir,—. . . For some twelve months now we have been experimenting on Taranaki ironsand, with a furnace erected in London, arid working under a patent taken out over the joint names of Messrs. Dauncey and Donne. The High Commissioner has been kept well posted as to the progress and nature of these experiments, which have now been carried to a successful issue, and he has signified his intention of personally visiting our works to see some of his own'.eand converted into pg-iron and steel. Through his instrumentality, and cables to and from the New Zealand Government, we have been placed in possession of all the information relating to the Sir Arthur Cadman syndicate, and are led to believe that all the sand deposits in the Taranaki land area will again be under your control in February next. Assuming that this information is correct, I can outline our proposition without further explanatory passages. Without egotism, I may say I have a certain reputation as a, successful metallurgical engineer, and the financial position of my partner is open to all possible enquiry. Upon these points the High Commissioner has thoroughly satisfied himself, and we are prepared to give every facility for further enquiry. We do not desire it to be understood that we are out on a "kiteflying" expedition, but rather that our suggested scheme is one based upon thorough and costly trials and experiv ments, and that, with your all-power-ful assistance, it is one likely to be carried to a successful issue to the ultimate benefit of your country as well a-s the promoters. We are thoroughly well aware of the vast potential wealth contained in your deposits of ironsand, and are not making out suggestion without having well weighed our chances of carrying matters to a successful issue, and at an early date. Briefly, we are in possession of a proved process for the manufacture of iron and steel, and have the necessary financial strength to guarantee a sound start, should your assistance be forthcoming. Perhaps it will facilitate your replying if I number my vital points thus:—(l) What are the nwnber and areas of the various deposits contained in the land under your jurisdiction? (2) Upon what terms can these .individually and collectively be acquired? (3) Are you prepared to give us a short-length option over these deposits, and, if so, what premium would you require? (4) In the event of terms being arranged, are you prepared to supplement your Government's guarantee to place substantial orders for the supply of iron and steel with our company? As the High Commissioner is fully acquainted with all our moves, he has suggested that it would be advisable for all cables and correspondence to pass through his office. Under these circumstances I shall esteem it a favor if you will cable to "Dauncey, deputy, London," and write to "Dauncey, c/o High Commissioner, 13 Victoria street, 'London." If, after receiving this, you are favorably impressed and decide to negotiate with us, will.you cable something to that effect (the cost of such cable to be remitted to you by the next outgoing mail), and we would then arrange for one of us to visit Taranaki to discuss and arrange, all details of the terms, etc. Should any further item occur to me in the meantime, this letter shall be supplemented by the next mail. Trusting that we shall be able to arrange the business, and that the ultimate result will be mutually advantageous,—l am, dear Sir, faithfully yours, I W. G. DAUNCEY.

To this the. Board replied on March 21, 1910, in the following terms:— W. G. Dauncey, Esq., C.E., M.E., 30 Holborn Viaduct, London, E.C. ©car Sir, —I am in receipt of your letter dated November 25, 1910, with reference to the ironsand question, and

I must apologise for the delay in an; swering same, which has been quit* unavoidable. At the present time, however, my Board, much to their regret, are unable to deal with tit ire*eand leasee, but tbey fully expect to be in a position to do so within, Bay, twelve months' time. As the law stands at present, it will be necessary to put the leases up for public competition when the time arrives, but ample time will be given you, if so desired, to enable you to make ell provision to compete on equal term* with any other likely purchasers of the leases. As desired hy you, my Board has treated this correspondence as •strictly private and confidential.—l am, etc., C. S. RENNELL, Secretary. The Board then reecived the following letter:— London, May 5, 1910. To the Secretary, Harbor Board, New Plymouth, New Zealand. Dear Sir, —I am in receipt of your letter dated March 21, and, while* thanking you for the same, must confess to a feeling of keen disappointment at the very fragmentary and unsatisfactory nature of its contents. In my letter to you. of November 25 last, I specifically asked you a series of questions bearing upon the ironsand problem, and your reply answers nothing at all, unless the vague statement that "your Board is unable to

deal with the question" can be taken as an answer. My letter making a definite offer to put down money for* an "option" was in your possession about New Year, but was not noticed until nearly, three months later. Dur- ' ing this time (if my official informs-. ■ Mon was correct) the old "option" had ' fallen in, and you had made some fresh' arrangement, which precluded my application from being entertained. Seeing the acknowledged importance of the question, and that we had been spending our private money, that our process had been proved in every detail —Whilst we were prepared to go on at our own risk and expense, I hardly think my proposition was met in a fair and business-like manner. My application was in your hands for a-fi least one month before you entered into fresh arrangements, and yet you say "they" (your Board) fully expect to be in a position to deal with the ironsand leases within twelve months. If your Board were convinced of this fact they must also have been convinced that the gentlemen who am now in England would be unsuccessful in their efforts to float their scheme-. Taking these facts in conjunction, it seems more than strange that my application should have been shelved for practically three months, whilst other* went to America and England with a scheme possessing not the very remotest elements of success, and to the detriment of a legitimate proposition. Then, again, I have made every enquiry but cannot get any explanation of your statement that the leases will have to be put oip for public competition when the proper time,;arrives», Did Messrs Grigg, Morris and Co. secure the option under which they are acting by public competition?. If so, may I ask why I was not notified by .cable and'given a.ebince of competing on equal terms ? When I asked you tot treat my previous communication aa confidential I was not 'aware • that a

member of your Board.-was also a member of the Grigg syndicate, or I should have at once seen the futility of my request. Although you aay about twelve months will Bee your Board in a position of being able to deal with these ironsand leases, may I ask you to let me know, upon Teceipt of this, some definite date ? My reason for asking this is 'that I intend leaving; for New Zealand immediately after knowing when the competition is to take place. Perhaps when it is thoroughly understood that the present holders, having failed in their efforts to float an experimental scheme, yonr Board may be able to deal with the matter at an earlier date than you ■ suggest. At any rate, I shall esteem it a favor if you will let me have the information herewith asked for a 4 your earliest convenience, and I should like to know, in answer to question (1) of my previous letter, whether you have any of the deposits; other than Taranaki, under your jurisdiction, for I presume you have only been thinking of Taranaki beach? My anxiety is to secure a short-term "option" over Taranaki was not caused .by any wish to be in a position to hawk the property about as others have done, but to place us in a position from which we could safely expend our own and the monies of our immediate friends.

I am sorry to put you to so much .trouble, and may explain that my anxiety is in part due to the fact that, in the absence of some business-like and definite settlement we must continue under heavy and regulaT expense in keeping works open, with the idle men to be paid. Awaiting the fa vox of your early reply,—J am, etc., W. G. DAUNCEY, C.E., M.E. The Board's reply was as follows: W. G. Dauncey, Esq., C.E., M.E., London, E.C. Dear Sir,— I am instru«ted to acknowledge receipt of your letter dated May 5,1910, on the subject of ironsand i leases, and in reply to inform you that the only information the Board can supply at the present time is that a portion, or possibly the whole, of the ironsand beach will be pit up for public competition about March next, but as to giving a definite date, that is' quite impossible at the present time. Regarding question (1) of your original letter, my Board has no jurisdiction over any other than Taranaki beach, and we have been dealing with this only. From the tone of your letter you appear to have 'been grossly misinformed; in your "official information." As a matter of fact, my Board have not been in a position to get possession of the leases, although they have been trying to do so for some time. The very earliest possible date they can do so, and then only by default, will be March next. No fresh arrangements have been made witk the present lessees. Consequently they did not require to compete at public competition for what they were already in possession of. At the time your letter was received (on February 10, and not New Year, as yon state), my Board was trying to obtain the leases, and your letter was held over for a month in order to see if we were successful. In this, however, we failed, and consequently we could not entertain your application. Regarding your accusation that a member of my Board is also a member of the Grigg syndicate, I can give this an emphatie denial.—l am, etc., C. S. RENNELL, Secretary. The following was the next letter from Mr. Dauncey:—

London, February 2,1911. The Secretary, Harbor Board, New Plymouth. Dear Sir,—As the 31st of March draws near, I ami hoping to receive sonic communication from you which will, to quote you own words, enable me to compete on equal terms with ■any others who may be desirous of applying for the sand leases.

I have asked Messrs Garrick, Cowl; shaw and Fisher, of Christclrarch, t<act for me, and doubtless you will hear from them. Trusting we shall soon achieve some, settlement,—l am, etc., W. G. DAUXCEY, C.E., M.E. The Board replied to this on April 2fi 1911, as follows:

Dauneey, Esq., London, E.C. Dear Sir.-I am instructed to acknowledge receipt of your letter dated I'ebruary 2 with reference to the ironsand leases, and also to state'that we have been in communication with Messrs Garrick and Co., of Christ-' church, who are acting on your behalf. Ihe Board are offering ( wo leases of ironsand beach by tender, which will close in November next, and by next mail 1 will forward you copies "of the plans and conditions of lease.—l am etc., ' C. S. REXXELL, Secretary. This letter' was followed soon after by the following, which came through Messrs Garrick, Cowlishaw, Alpers and Nicholls, solicitors, Christchurch: The Secretary, Harbor Board, Xew Plymouth. Sir—Acting under instructions fromMr. W. G. Dauncey. we are sending herewith a letter addressed to you. We shall he glad if you will communicate with us in the matter—Yours, <*<•'•> GARRICK & CO. (Enclosure). ' Secretary. Harbor Board, Xew Plymouth. Dear Sir,—Re Taranaki ironsand I am approaching you again in connection with the above matter, because by the time this reaches von I. believe

all option, etc., will have"expired, and that your Board will be in a position 'to entertain my application for a short-term option embracing the right to take up and work the ironsand deposits in Taranaki.

To make my position quite clear, 1 ■may remind you that I have been in

communication with you for nearly three years ..bout tliis matter, and ihiive always been prepared to carry out my original offer, namely, to pay a nominal sum for a short-term option, providing that in the event of

my demonstrating that my contentions were all correct, the leases would become my property afterwards. I would suggest as the" most satisfactory arrangement *hat the Harbor Board, after receiving my cash for option, should evolve some scheme by means of which they could receive—(l) A nominal rent for the period, that would have to elapse after my securing the leases 'before I could' commence to turn our manufactured iron and steel, and thenceforth an arranged royalty of so much per ton on all iron and steel manufactured: or (2) That your Board place an annual rental charge upon the iron-bearing area of Taranaki.

To my mind, the first suggestion would be the most mutually advantageous if worked out, say, at a royalty of so much : per ton up to 100 tons per week, a slight decrease when the output exceeds 100 but not 200 tons per week, and so on to meet anv possibly output. By this means* your Board vjould be assured of an increasing revenue from the sand deposits, although the royalty per ton would be a decreasing one. I only make these as tentative suggestion, "and shall be glad to receive and give the fullest possible consideration to any alternative ideas your Board may care to advance.

Now that all the other schemes and ideas have fallen through I presume there will be no obstacle placed in ■my way, and that, at last, I may be about to have my turn. lam sending this communication under cover to Messrs Garrick, Cowlishaw and Fisher, of Christchurch, and shall be glad if you will notify them of any action you propose, and trust that some scheme may be evolved by means of which past differences may be obliterated and a mutually advantageous working basis reached. Awaiting the favor of your further communications.—l am, etc.. W. G. DAUXCEY, C.E., M.E.

The Board replied on May 27. 1012, to Messrs (iarrick and Co. to the effect that the Board had not renewed the leases to the present holders; that thev had simply compelled' them to carry out the terms. The leases had many years to run, and so long as the conditions were observed they could not be forfeited. . /hvi the- .'event of forfeiture of these leases, the Board would be glad to treat with Mr. Dauncey, but held out no immediate hope. THE BOARD'S ASSISTANCE-. ■■ "Instead of thwarting Mr. Dauncey and Mr. Donne, as you would gather "from the above letters had been the case/' said Mr. Connett, "the Board has gone out of its way to help and facilitate their objects. The Board had plan's and forms of tenders for lease of those portions of the foreshore not in possession of the Public Trustee. Now these portions are quite as valuable for the purpose required by the English people as the Public Trustee's. There are.people, competent to express an opinion, who go further and say the portions still available are more valuable than those let."

Mr. Connett produced the plan mentioned. It clearly shows the areas let and to be let of the foreshore. Plans, together with form of tender, had been sent to Mr. Dauncey, but no acknowledgment of their receipt had vet reached the Board. He must have 'received them, as in the interview he refers to them, in contemptuous ■terms, as being of little account. '•ln the article, Mr. Donne refers to two gentlemen having left New Zealand and travelled through America and England, .seeking in every possiblt way to induce capitalists to 'put up money for experimental works in Taranaki," said our representative. "Do you know anything of this?" "I can only conclude," replied Mr. Connett. ■•'that Mr. Donne is referring to the people who got options over the leases from the Public Trustee. Possibly they tried to sell them. But the po'int is. the Harbor Board, having granted the lea<cs. they have no say in the matter of iheir future di-posal, so long, of course, as the conditions of the leases are observed. It is only in the event ol breach of the conditions occurring that the leases granted can revert to the Hoard. Rut to say that Mr. Donne and his people have been blocked, as maintained by him. is entirely untrue. As I have said, there are the other ] ( >a,cs. every bit as good as the Paritutn ones." THE PKI-SENT LEASES.

'•You .have referred to the lenses vested in the Public Trustee. Are you prepared to toll llic public what the" circumstances are in connection with them? ■•Certainly," promptly replied the chairman. "I ii.'ii! only too anxious to pla< e the fads before the public. The leases embracing the. foreshore near the breakwater .were originally granted in 1002 to the. late Sir Alfred Cadman and Mr. Daniel Horry (the latter being afterwards secured by Sir Alfred Cadiiian) for a period of ]."> years, with the right of renewal for a far!her 21 years. On his death, the leases became, vested in the Public Trustee, wdio was executor for deceased's estate. The leases contained

a proviso that the lessee should expend the sum of £2OOO on the erection of plant, buildings, etc., fer smelting the ironsand by a certain date. The Public Trustee applied for an extension of time tor the erection of these works, and the Uoard granted the application in cou-•dd-eratioii of the lessee permitting the Board to remove from the land leased, stone, gravel and other material required by the Hoard. A further extension was subsequently granted (this, mind you, was long before Dauncey appeared on the scene) on the holder waiving all rights to the beach near the breakwater and surrendering to the Board the oilbearing Tights over the whole of the land comprised in the leases. Then the Public Trustee applied for a further extension, and deposited with the Board £2OOO cash on condition that the money was to be forfeited to the Board and leases surrendered unless by March 31, 1912, there had been erected on the land buildings and plant to the value of at least £2OOO. Meanwhile, I might explain, the rignts v-tefl in the Public Trustee had been taken over by the Parapara Ore Company. The e'rection of the works was proceeded with, and prior to the stipulated date, viz., March 31, 1912, the holders of the leases had the requisite buildings and machinery erected, Uius complying with the conditions of the leases. Evidence was furnished to the Board as to the extent of the expenditure and the suitability of the plant and buildings for the purpose designed was certified to by Easfcerfield, of Wellington, and the £2OOO was returned.

"I might explain that the Board has all along proceeded on the advice of its solicitor (Mr. J. H. Quilliam), and in regard to the extensions granted by the Board from time to time his advice had always been that it was impossible, to forfeit the leases unless a reasonable time had elapsed after notice requiring the lessee to comply with any condition of the lease and default thereafter. ''Prom the above, you will see that the statements made by Mr. Donne in the interview you reprinted are entirely wrong and misleading; that the Board has helped Mr. Dauncey in every way possible to secure the remaining leases; that the Board's great desire is°to facilitate and see the ironsand industry established; and that the Board's hands were tied, and the Board could not have acted in any other way than it has in regard to the present leases."