Karaka and Tararu Tunnel Scheme.

Thames Star, Volume IX, Issue 3048, 21 November 1878, Page 2

Karaka and Tararu Tunnel Scheme.

A meeting of the committee re the Karaka and Tararu tunnel scheme was held at the Pacific Hotel yesterday, for the purpose of receiving the report of the sub-committee and suggestions of practical men on the matter.—Mr Brodie was voted to the chair on the motion of Mr McCullough, seconded by Mr Benshaw.

The Chairman said before going on with the business he would like to make a few remarks touching a letter from his friend Mr Beddivh which had appeared in the Star, in which the writer stated he inferred from his, Mr Brodie V remarks, at a .former meeting, that he wished to throw cold water upon the scheme. It was unusual for him to take any notice of letters which appeared in the papers, but when a writer pat his name to a letter he deserved consideration. Touching the impression that he was opposed to the scheme, it was altogether without, foundation, hit remarks were only made with the object of having the 'scheme thoroughly discussed, that it might be established upon a proper financial basis; and 'all would admit * that such a consideration wai of the greatest importance, to the future success of the undertaking. Mr Brodie then called upon Mr jMcGollough to read the rierort of the sub-committee also the letters received from the gentlemen written to by the sub'committea.

Mr Frater's letter was as follows:-*-* " Yours of the 15th, re Karaka tunnel, recaived. With the view of being able to offer some suggestions as to the best method practically to carry oat the idea of the promoters, I /hare carefully considered the whole subject, but cannot see my way clearly to recommend any equitable plan by which the work can be carried on by the working miner receiving as payment for his labour half cash atd halfi in paid up scrip in the company's stock. Nominally, paid up scrip to start with* would bare little or no market value, consequently the first tenderers would, I fear, make but a small reduction in their cash estimate for such papeYr whilel in reality, this is jctst' the time when the assistance of labour is most required, and not when the company's stock has attained a market value, as, in such" a case, it could then easily be converted into cash. However plausible in • theory the co-operative principle sought .to be introduced into the undertaking may appear, practically it se«ms surrounded with difficulties. I do not see any analogy in the same principle as applied to manufactures,' where in such cases skilled workmen, ifc manipulating the raw material, must jot necessity enhance the value of the manufactured article. Had the work been Of less magnitude, so that a "number of working men could have tendered for the whole in one contract^ the matter would : have been simple enough. So mvch cash and so much paid up scrip could have been given in the same manner as some .rail: ways are > constructed, by the company getting so much' cash and so many acres of land. But as the work in this case, I presume, will be let in small contracts, difficulties arise. Should the company's 'stock have a market value, it would even then be used^ at a disadvantage owing to the uncertainty of such stock, and trte sudden fluctuations which all mining shares are subject, to. Contractors m their estimates would possibly make a large, allowance for probable depreciation in the value of the scrip by the time it would come into their hands.' . I am of .opinion it would be wise on the part of the promoters to abandon the idea of creating paid-up scrip with the intention of using it as part payment of labour, and instead form the company in the usual manner with all shares 'paid up nil,' at the same time giviag every working man an opportunity of becoming a shareholder for Buch number-of scrip as in his opinion his means will allow him. to support. The amount paid on allotment - with the first call ought to be sufficient to enable the company to purchase at least one of the most improved labour-savirg machines, namely, a rock drill, so tp to push the work ahead with all possible dispatch. As the tunnel progresses and lodes are cut, then the co-operative principle could be carried out on the tribute system as conducted in other, mines—l am, &c, Jens Fbater. [P.S. I understand the concession granted by the Government is ' subject to existing rights.' It is very important that the public should know what those rights are, to, prevent the possibility of the tunnel being driven at the company's expense for the exclusive advantage of those outside the scheme.—J.F.] " Mr MacDonnell's communication was as follows:— . - - - " Before a prospectus could be prepared it would be necessary to know the nature of the country traversed by proposed tunnel, and the known reefs likely to be intersected, as the probable, cost of I the entire works. Such information can alone be supplied by a competent surveyor. It should also be ascertained the number of claims and licenses already in existence on the proposed line of tunnel, so that the company will know the exact ground it would be entitled to. In fact, it would be absolutely requisite tha,t the ground be first surveyed and secured before the company was floated, 86 as to prevent speculators from taking up ground on the proposed line of tunnel. The combining of capital and labour in a large undertaking such as that proposed would be a difficult matter, in so far as that if holders of „ shares only be entitled to tender for contracts (and I hold that all work should be let by tender), the tenders would probably be in excess of a fair price for works required to be performed, A number of shares in the company might be reserved for the purpose of issuing same to workmen willing to take them, and allow the amount called up for shares to be deducted off monies due. Should the company be formed, I would (recommend that it should be .registered under Joint Stock Companies Act, nominal capital £40,000 in 40,000 shares, £1 each, nil paid up; Is per share on application, and Is per share on allotment, calls to be afterwards made as required, but not to exceed 6d per share per-month. Any assistance I can render in the matter will be given with pleasure.—Yours truly. D. G. MacDonneil."

Mr E. McDonald Scott stated in reply that the legal manager into Whose hands the formation of the company was placed would be able to furnish the information required.. The members of the Thames Stock Exchange endorsed the rlews expressed in Mr Frater's letter. , , A draft prospectus was then read and amended, and the hon. secretary was

instructed to call a public meeting and lay the result of,the committee'! work before it. Votes of thanks were also ordered to be sent to the gentlemen who wrote in reply to the request of the subcommittee for .suggestions, &c., after * which the meeting terminated.