THE AMMUNITION CONTRACT, 1905.

Appendix to the Journals of the House of Representatives, 1905 Session I, H-19b

H.— 19b

1905. NEW ZEALAND.

THE AMMUNITION CONTRACT, 1905.

Laid tm the Table of the Home of Representative, in accordance with Subsection (c) of Section t of' Ihe Ammunition-supply Act, 1904.''

Contract. This deed made the twenty-third day of May, one thousand nine hundred and five, between His Excellency the Governor of New Zealand, of Wellington, in the Colony of New Zealand (hereinafter with his successors in office called "the Governor") of the one part and the Colonial Ammunition Company (Limited), a duly incorporated company carrying on business ,n the United Kingdom, and at Mount Eden, near Auckland, in New Zealand, as manufacturers of small-arms ammunition (hereinafter with its successors and permitted assigns called " the Company ") of the other part. Whereas by deed dated the seventeenth day of May, one thousand nine hundred and one the Governor, acting under section 32 of " The Defence Act Amendment Act, 1900," entered into a New'zeaHnS J"?™ 7 W" ** Cm *"V ° f "<'«- to the Government o Zealand for tne term of three years from that date upon the terms and conditions therein appearing: And whereas the said contract has expired by effluxion of time but negotiations for new contract have since been ,„ progress, and in the meantime the Company has been supplying ammunition on the same terms as specified in the expired contract: And whereas the Company is willing to enter into a fresh contract under "The Ammunition-supply Act, 1904," for Supply of such quantities of small-arms ammunition as shall be required by the New Zealand Govern follows U -°" conditions hereinafter expressed: Now this deed witnessed as 1. The Company hereby covenants with the Governor that the Company will manufacture small-arms ammunition within the Colony of New Zealand in such quantities, aiid at such monthly or other intervals, as may from time to time be ordered by the said Government or its duW ,1 pointed officers during a period of five years, computed from the date hereof (being the term of this contract): Provided that the Company shall not be bound to maintain a monthly supply o more than thousand (500,000) rounds of 303 service ball ammunition and seventy five thousand (70,000) rounds of 303 blank ammunition. ' 2. The Governor will pay to the Company for all ammunition finally delivered under thi« contract a price equal to the current War Office cost, meaning thereby the current price for tie time being paid by the War Office to contractors for similar ammunition in Elandplu* t ordinary Imperial departmental charges upon the same, as packed and delivered at Woolwich increased by a sum at the rate of fifteen pounds (£l5) per centum of the aforesaid current War Office cost, to cover the expense of freight, insurance, wharfage, and general charges of delivery in New Zealand The aforesaid current War Office cost shall be ascertained annually in London as on the day of the date of these presents, and as on the same day in each year thereafter during he term o this contract, by the Agent-General in consultation with an expert (such expert be ng the Inspector of Warlike Stores or some other officer appointed by the Agent-General in thai behalf) and the Company's secretary ,n London, or some other person appointed by or on behalf of the Company and the current War Office cost so ascertained shall (increased by the c aforesaid) be and be taken to be the price (hereinafter called " the Company's price ") to be paid by the Governor to the Company for such ammunition during the ensuing twelve months- Pro vided however that m the event of war being declared or commenced between Great Britain and any foreign Power then during its continuance the Agent-General of New Zealand, or such expert _ ?l\ UTT r 7 m,n th f *"_*_ ***** in conjunction with any person appointed in that behalf by the Company, may fix and determine a special price (being not less than the the current, Company s price) per thousand rounds, and state the time during which such special pri«' shall continue to be paid, and the special price so fixed and determined shall for the time bein "be in substitution for the Company's price which but for this proviso would be payable 3 ' un ™ ll ! lnmm quantity of ammunition which the Governor shall buy from the Com ' pany shall during each year of the term of this contract be three million (3,000,000) rounds of -303 service ball ammunition and five hundred thousand (500,000) rounds of -,303 blank ammuni' tion, and the Company binds itself to supply the same in the manner and subject to the con dL tions of these presents: Provided that if during the term of this contract the Governor intend-*

H.—l9b

to make any change in the calibre of the arm with which the New Zealand Forces are now equipped {being the arm for which the aforesaid ammunition is to be supplied), he shall give to the Company eighteen calendar months' notice of such intention in order to enable the Company to prepare machinery and tools for the manufacture of the same quantity of ammunition per annum for the new arm, and from the date of the expiry of such notice or from such other date as the parties hereto may by memorandum in writing appoint the ammunition to be supplied by the Company during the residue of the term of this contract shall be ammunition for the new arm as specified in such notice in lieu of ammunition for the present arm as hereinbefore specified, and the provisions of this contract shall operate and be construed accordingly: Provided further that such notice shall not be given after the expiry of the second year of the said term. 4. The Company agrees to purchase and take from the Governor, and the Governor agrees to supply to the Company from time to time as reasonably required all powder, cordite, and other explosives required for the manufacture of all ammunition under this contract at the actual cost thereof to the Government, delivered at the Mount Eden Magazine, near Auckland, and the Company shall bear and pay all costs and all loss and risks by damage or deterioration in respect of the said powder, cordite, and other explosives (excapt destruction by explosion) whilst stored by the said Government prior to the delivery as aforesaid. 5. Before the Governor shall be required to accept the delivery of any ammunition under this contract he shall be entitled to have the same tested by a Government official appointed by him from time to time for such purpose, and the Governor shall be deemed to have taken final delivery of any instalment or portion of the said ammunition when (but not until) the required tests have been carried out, and the ammunition has been finally approved by a certificate in writing to that effect from the said official, such tests to be carried out and completed within reasonable time after delivery of the ammunition to the Government magazine at Mount Eden, near Auckland. . , . , 6 All ammunition to be supplied under this contract, and the materials employed in the manufacture thereof, shall be according to the specifications known as the Woolwich or Imperial -Specifications in existence for the time being for the same class of ammunition, and shall be subject to the same tests as ammunition being supplied to the British Government by contractors for the use of His Majesty's Imperial Forces. . 7. All tests of ammunition to be supplied under this contract shall be carried out in Auckland. 8 The Governor shall bear the expense of all aforesaid tests of ammunition except in respect of such tests as result in the rejection of any lot, and all ammunition expended in such last-men-tioned test shall be replaced by the Company at its own cost, 9 The official representing the Governor as aforesaid shall have the power to reject any ammunition which shall be found not to comply with the Imperial Government or other authorised specification as aforesaid for such class of ammunition or not to satisfactorily fulfil the aforesaid tests, and ammunition so rejected shall not be paid for. .__,.,* „ n 10 The Company shall be entitled to be represented by a duly authorised official of the Lornpany when ammunition is being examined or tested as hereinbefore provided, and the said testing official shall and will for this purpose give due notice to the Company or its representatives in the colony of the intention to hold such examination and testing from time to time. 11 In case the ammunition supplied or any part thereof aforesaid is rejected and is not replaced with ammunition fulfilling the required tests and conditions within a period of three months from the service of notice in this behalf on the Company or its representatives in the colony the Governor shall have the right of purchasing the same quantity of ammunition elsewhere ' and any extra cost or expense thereby incurred shall be paid by the Company. 12 The ammunition shall be made up in packages containing ten rounds each, and the Company shall mark all cartridges, and Hie wrappers or boxes or cases in which such cartridges are packed in any manner that may be required by the Governor. „■„•■. 13 The Governor or any person duly appointed by him shall at all times have the right of entry to the Company's works to inspect ammunition in the course of manufacture, and also the riant machinery, and material used in the manufacture of the said ammunition. 14 The Company shall not nor will assign or sublet this contract or any part thereof without the consent in writing of the Governor first had and obtained. 15 In case the Company fails to execute any order tor ammunition at the time and in the manner provided for by this contract (whether ordinary supply under the foregoing provisions hereof or special supply under clause 20 hereof) or in case the Company assigns or sublets this contract or any part thereof without the consent in writing of the Governor being first obtained or in case the Company fails in the observance or performance of any of the provisions or conditions to'be observed or performed by the Company contained in clauses four and eleven of this agreement or in case an order is made or an effective resolution passed for the winding-up of the Company' then and in any such case it shall be lawful for the Governor by writing under his hand to cancel this contract, and thereupon this contract shall be cancelled, and all sums of money hen due or accruing to the Company from the Government under this contract shall be forfeited: Provided always that if such failure is proved to the satisfaction of the Governor to have been caused by unforeseen circumstances over which the Company could have no control the Governor may rescind such notice of cancellation if given, or withhold the giving of such notice upon such terms as he thinks just and equitable: Provided further that if the Company commit any breach of Tny provision or condition of this contract other than those ,n this clause hereinbefore specifically mentioned then the Company shall pay to the Governor as liquidated damages for the first bScVo anT'uct> provision or condition the sum of fifty pounds, or the second breach of such provision or condition the sum of one hundred pounds, and should the Company commit any third breach of such provision or condition then the Governor may cancel this contract in manner hereinbefore provided.

2

3

H.—l9b

16. The Governor will pay for each lot of ammunition finally delivered under this contract within one mouth from the date of such delivery. 17. The Company shall during the continuance of this contract be allowed free of charge the use of any empty boxes or cases which, in the opinion of the Minister of Defence, may at any time be available in the magazine or stores of the Defence Department of New Zealand suitable for the delivery of cartridges under this contract, such boxes or cases to be removed from the magazine and stores of the Defence Department to the works of the Company by the Company at its own expense. 18. The New Zealand Customs duty paid by the Company during the continuance of this contract on machinery and stores bona fide imported into New Zealand by the Company for the purposes of this contract shall be refunded to the Company by the Governor upon his being satisfied, in the case of stores, that they have been used solely in the carrying-out of this contract, and, in the case of machinery, that it has been in position in the Company's factory for at least one year, and has been bona fide used for the purposes of this contract. And it is hereby agreed and declared that if and whenever machinery or stores in respect of which the duty has been refunded are used for any other purpose than the carrying-out of this contract, the full amount refunded shall be forthwith paid by the Company to the Crown: Provided that in the case of machinery which, after having been partially used in carrying out this contract, is used or disposed of for any other purpose, the amount so payable shall be such proportion of the full duty refunded as the Collector of Customs at Auckland may fix, having regard to the then value of the machinery and the purposes for which it is capable of being used. 19. The Company shall not import into New Zealand or erect in its factory after the date hereof any machinery for the purpose of carrying out this contract without the written consent of the Governor first had and obtained. 20. If at any time or times during the continuance of this contract the Governor requires any special supply of small-arms ammunition in excess of the quantity which under the foregoing provisions the Company would be bound to supply, he shall give an order to the Company specifying the quantity required and the time within which the same is to be delivered. If within seven days after receipt of such order the Company gives written notice to the Governor that it is able to execute the order within the required time the Company shall be deemed to have accepted the same, and shall be bound to supply the ammunition in terms of the order at the same price and subject to the same conditions in all respects as in the case of ammunition to be supplied under the other provisions of this contract. If such notice is not duly given as aforesaid the Company shall be deemed to have declined the order, and the Governor shall have the right to procure the special supply from the Imperial military authorities in such manner and on such terms as he thinks fit, or to invite tenders from other sources for the same, the Company being in the latter ■case allowed at the same time to submit their tender. 21. The Governor on his part will at all times during the continuance of this contract keep a reserve store of powder, cordite, and other explosives sufficient to enable the Company to commence and "continue to manufacture three million (3,000,000) rounds of "303 ammunition, and will (in terms of clause 4 hereof) supply the same to the Company from time to time so as to enable it to perform its part of the contract, and the Company on its part will at all times during the continuance of this contract store and keep in stock a sufficient quantity of till other materials necessary to enable it to commence and continue to manufacture such three million (3,000,000) rounds: Provided that if the Governor desires to change the pattern of the cartridges to be supplied by the Company to the Governor under this contract, the Governor shall give to the Company at least six months' notice in writing of such intended change before the Company shall be required to deliver to the Governor under this contract cartridges of such new pattern, and if such change of pattern will, in the opinion of the Company, render useless or unsuitable the materials which the Company has in compliance with this clause to keep in stock to manufacture the said three million rounds as aforesaid, then the Company may during the said six months (but no longer) reduce the quantity of such materials it has so to keep in stock to an amount sufficient to manufacture one million and a half rounds: Provided further that after the expiration of the said six months the quantity of material to be kept in stock shall be as hereinbefore provided, and shall apply to material for the cartridges of the new pattern. 22. The Company will at its works within New Zealand maintain a plant and machinery in good order sufficient to manufacture six million (6,000,000) rounds of '303 ammunition per annum during the term of this contract. 23. Upon giving six calendar months' previous notice to the Company of his intention so to do, the Governor may at any time during the term of this contract purchase as a going concern the whole of the works, plant, and stock-in-trade of the Company in New Zealand, including goodwill and including also the Company's estate and interest in the land on which its factory or works are erected (all of which are hereinafter referred to as " the Company's works ") at the fair value thereof to be ascertained by arbitration under the provisions of " The Arbitration Act, 1890 " : Provided always that the reference shall be deemed to be to two arbitrators (one to be appointed by the Governor and the other by the Company), and an umpire to be appointed by the arbitrators before proceeding with the reference: And provided further that the Governor shall not be bound under this contract to purchase any machinery, plant, or stock-in-trade used by the Company exclusively for the manufacture of sporting-ammunition unless the Governor intends and desires to continue to manufacture such sporting-ammunition in the said factory. If in the course of the arbitration proceedings any question arises as to what is or is not included in the Company's works, either party may require the same to be settled by the Supreme Court. In ascertaining the value as aforesaid of the Company's works the value of the Company's buildings and erections shall be included, but not the value of any leasehold interest then held by the Company from the Crown in the land on which such buildings and erections stand.

H.—l9b

4

24. If the aforesaid right of purchase is exercised, then, on the completion of the purchase, this contract shall be deemed to be determined, and in the meantime during the term thereof the, Company shall at all times keep and maintain its buildings, machinery, plant, and appliances in good and substantial order, repair, and condition, and carry on its manufactory works and busi-, ness in a proper and businesslike manner as a going concern. j 25. If the aforesaid right of purchase is exercised the Company shall also sell and the, Governor shall buy at a fair value, to be fixed by arbitration as aforesaid, the whole stock of ammunition of all kinds except sporting-ammunition, and all raw materials and all material in process of manufacture except respectively that exclusively used for sporting-ammunition then on the Company's works or actually at sea or in transit thereto and belonging to the Company. 26. The Governor will, as far as possible, and as far as is permissible by law, give preference to the Company in entering into a new contract al or before the expiration of the term of this contract by effluxion of time. 27. The term of this contract shall be for five years from the date hereof, being the limit of time fixed by " The Ammunition-supply Act, 1904," under which this contract is entered into. 28. The Company is represented in New Zealand by its manager and attorney, Cecil Arthur Whitney, whose address is at the office of the Colonial Ammunition Company (Limited), Auckland, also by Major John Whitney, general manager and attorney of the Company for Australasia, whose present address is at the Company's works, Melbourne, Victoria. Any change in the appointment of the Company's representative or representatives shall be forthwith notified to the Governor, and any notice, order, or direction to be given by the Governor under this contract, or any writ or other process requiring to be served on the Company shall be deemed to have been duly given or served if the same is delivered to or served upon the representative or representatives for the time being of the Company in New Zealand, or left at the office of the Colonial Ammunition Company (Limited), Auckland, New Zealand, or at the last known address of such representative or representatives as aforesaid. 29. The term " Governor " where used herein shall mean His Excellency the Governor of the Colony of New Zealand for the time being and includes any Acting or Deputy Governor temporarily appointed or acting during the Governor's absence, and the term " Company " shall include the successors and permitted assigns of the Compaq 7, and the term "the Agent-General " includes the High Commissioner of the Colony of New Zealand in London. 30. The term " small-arms ammunition " or " ammunition " shall mean and include ammunition for rifles and carbines and machine guns of rifle-calibre. 31. All moneys payable by the Governor under these presents shall be payable out of moneys to be appropriated by Parliament. 32. All or any of the powers conferred on the Governor or on the Government by these presents may be exercised by the Minister of Defence. In witness whereof these presents have been executed by the parties hereto the day and year first before written. Signed by His Excellency the Governor in the name \ and on behalf of His Majesty the King, and j_ sealed with the Public Seal of the Colony in the [ presence of— ) Signed by the said The Colonial Ammunition Com- \ John Whitney, pany (Limited) by its Attorney, John Whitney, I Attorney for the Colonial Ammuniin the presence of — j tion Company (Limited). Gordon R. Stewart, [ls.] Notary Public, Melbourne, Victoria. I, John Whitney, of Melbourne, is the State of Victoria, gentleman, do solemnly and sincerly declare as follows : — 1. I am the duly appointed attorney of the Colonial Ammunition Company (Limited) under and by virtue of a certain power of attorney under its common seal dated the first day of May, one thousand eight hundred and ninety-five, and deposited as No, 133 in the Supreme Court Office at Auckland. 2. I have not received any notice or information of the winding-up of the said company, or of the revocation by any other means of the said power of attorney. And I make this solemn declaration conscientiously believing the same to be true, and byvirtue of the provisions of an Act of the Imperial Parliament known by the Short Title of " The Statutory Declarations Act, 1835." Declared at Melbourne this twenty-third day of May, { To W one thousand nine hundred and five, before me — I Gordon R. Stewart, Notary Public, Melbourne, Victoria. Approximate Coat of Paper. —Preparation, not given : printing (1,425 copies!, £2 Bs. Bd.

By Authority: John Mackay, Government Printer, Wellington.—l9os. Price 3d.}