VALUE DISCOVERED.

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, aad the fh'sr estimate of the quantity visible was put down at some 42,000,000 tons. In 1913 a German mining engineer, Karl Elschner, made a report, in which he said that the phosphate area was over ISOO hectares, and the average contents at least 12 tons per square metre. If that estimate be accepted it means that there is a minimum of 216,000,000 tons of phosphates. There are, however, oven more optimistic figures. The Interstate Oommissloai 's report of 1918 referred to a German estimate of 300,000,000 tons- A report rendered to the New Zealand Parliamen* indicated that th? amount visible at the present time is at least 80,000,----00 ft to 100,000,000 tons, and this may be taken as a fairly reliable estimate. A concession to work the phosphates at Nauru v, a 3. 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 •Triluit Gesellschaf't, a-nd it gave the exclusive right of exploiting. the guano phosphate deposits in the Marshall I». lands Protectorate; This concession, with the consent of the German Government, was transferred ito the Pacific Phosphate Company, the successors of the Pacific Islands Company, by agreement dated January L' 2, 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 ms.tives. Ocean Island has since been brought within the scopd; of the Nauru Island agreement. The'{phosphates in this island extend to aji even greater depth than in Nauru, 57ft being known. The same Geminn engineer, Karl Elschner, estimated the amount of phoisphates visible in Otenn Island at about 15,000,000 tons. fAn agreement was concluded with the Pacific Island Company for the mining rights of Ocean Ihlaaid for 999 yen rs\ from. May 3, 1901. After the formation of the Pacific Thosphate Company, this agreement was altered to a license', which was issued to the new company in 1902, to run for 99 years from jir&nuary 1, 1901, jo as to coincide with the period of the Nauru concession; It was decided by the British Government and by Vie dominion Governments concerned to buy the comand article 7 of the agreement •J&tbws that "any rights title, or iri&'rogtff which-the Pacific /PlhospHate Company or any person may have.in. the said deposits, land, buildings, plant, and equipment" shall be converted into a claim for compensation at a fair valuation. The sum of £3,500,000 was fm'ftlly agreed upon as a fair valuation, and for this sum the three Governments acquired the full benefit of both concessions and of allJeaees and other rights, and also the offices in Melbourne, Sydney, amd Adelaide, buildings and piers in the islands, and an extensive system of tramways, machinery, power, electric light installa-j •tioms, boats ,geav, etc.

THE ORIGINAL COMPANY. The original Pacific Phosphate Company was registered on April 18, 3902, with 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 1910, to £975,000 in 1912, and in 1914 the authorised capital was increased to £1,200,000. The last amount consisted of ordinary fully-paid-up shares, with the exception of £375,000 £1 shares, of which only 10s had been paid, and 225,000 preference shares, which had not been called up. There were some holdings by Germans; but 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 shipments, it did not pay dividends as large. The German shares, which were bought by British subjects, 'in 3917, fetched £574,818, and at .that time the company was paying about 7 per cent. No actual valuation, it is stated, was made when th< purchase price of £3,500,000 was decided upon, as the "principal factor in the case, namely the future price of pnosphates, which constitute the bulk of the company's assets, was necessarily conjectural. The Nauru Island Agreement was signed on July 2, 3919, 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 submitteed to the Council of the League of Nations, because it is held under resolution of thy Supreme Council.