THE SCARCITY OF COAL.

Lyttelton Times, Volume CIII, Issue 12242, 30 June 1900, Page 2

THE SCARCITY OF COAL.

• —; —❖ : CHIACUMSTANCES, THAT HAVE CAUSED IT. THE CLOSING DOWN OF TEE WEST-PORT-CAKDIFF COMPANY’S MINE. Statement Have repeatedly been made lately that there is a scarcity of coal in Christchurch, and there are conjectures as to the circumstances that have led up to such a state of affairs. With the object of gaining some information on the subject, a, representative of this journal on Thursday waited trpoh Mr \V. H. Hargreaves, of this city, who has been connected with the coal trade in Canterbury for nearly forty years, and who; is well acquainted with its ramifications.

■ The reporter first of all asked what, in the opinion of Mr Hargreaves, had induced the present scarcity. “ Several causes have led up to it,” replied Mr Hargreaves, “and it is felt all over the nblony. .The first cause, and the principal, one, is the war, which has had the effect of bringing into rise a very large number of transports and other cargo vessels of large tonnage, and their requirements in respect to fiiel have'placed a very great strain on the production of even Newcastle coal. I would draw attention to the fact that there Has been a large increase , in price at . the English collieries. For example, Cardiff coal, in South Wales, could, say, less than two years since, be obtained free on board for about 10s or 10s fid a ton, whereas lately it has gone up to 17s fid, free on board. Tins has, probably, diverted, a good deal of trade to New South Wales, and, as a result, the extra, tonnage, together with the increased difficulties of loading, helped to cause the detention of■ vessels, and charterer have naturally increased the rates of freight, especially with regard to steamers. These are some of the chief causes of the scarcity* ami they have been emphasised to a large'extent by the outbreak of the plague in NeW South Wales. Shipowners have to 'submit to quarantine on- arrival at the Several ports in New Zealand, and 1 this fact tends to further increase the freight to New Zettlafnd ports: -■ 'With the approach of winter, when the demand for New South Wales coaT is always considerably increased, and withthese causes .still in operation, the markets in New Zealand have been kept at'a hand-to-mouth supply. As fas as I am aware, there are no stocks at a single port in this 1 colony. As a matter of fart, I might say that until yesterday (Wednesday) tnere was practically .no Newcastle coal in Christchurch. You see, Newcastle, besides being called upon to provide the extra demands to the transports, is, as I learn, supplying the British Government with part of its colonial requirements. “ With regard to the demand in New' Zealand, there always has been a considerable consumption of Newcastle coal, notwithstanding the fact that the production of coal in this colony has steadily increased, and its consumption is likely to contiunue. I may say, that the strain put upon the productive powers of Newcastle has had the effect of giving a great impetus to the production and sale of New Zealand coal within the colony, especially with ■ regard to Westport coal, which is* probably without exception, the best steam and household coal of its kind produced' in the colony. The circumstances -to which I have referred have created such a demand for local coal that most, if not all, of the colleries have been totally unable to meet -it. -This remark applies especially to Westport coal, which is very largely used by the ocean-going steamers that sail from the principal ports of the colony. Now, there are practically only three mines on the West Coast at present at work. They are the Westport Coal Company’s mine, at Westport; the' Blackball Company’s mine and the Point Elizabeth Company’s mine, at weymouth. The Westport Coal Company is; unable, and has been unable for several months past, to fully meet their increased local demand, which is added to by the requirements of the ocean-going vessels (such as those belonging to the New Zealand Shipping Company, the Shaw-Sayill and Albion Company and other London liners), and also of the chartered vessels for South, Africa. But there is another reason for the unusual strain put upon the Westport Coal • Company’s resources, aiid that is the closing down -of the only other mine in the Westport ; district. I mean the mine belonging to the Westport Cardiff Coal Company. In 1 consequence- of the closing down of this mine, the Westport Company is called upon to meet not only the increased demands referred to, but to meet them without the aid, of the other mine, which, had it been in existence, would have helped to the extent of at least 60,000 tons, per annum. Of course, the other companies on the West Coast have taken, their part- in meeting the demand as far as it is possible for them to do so, and 1 may specially mention the Blackball Company, which, I understand, has practically doubled its out-put, or will do so. this year. With regard to the other Greymouth mine, I am not able to speak with certainty,-because it is weH known that the coal in the Brunner mine is limited, blit for, all which it can produce, it has a, ready market.” With regard to the Westport Cardiff Company’s mine, can yon give any information as to the circumstances that led up to its closing? “Well, yes. It is a long story, but I am willing to give the particulars. From the inception of the company, I have been its chairman and the managing director. It was practically the failure of the marketable coal that led to the mine being closed down. To go further into details of this matter, however, I may say that the company was formed in 1892. Ite lease had sixty-six years to run, and the extent cf its holding was a little under 2000 acres, situated in the MokiMnui district. From investigations made prior to the formation of the company, we had good reason to believe that the lease comprised a large area and good body cf first-class coal, (similar in all respects to that. produced by tire Westport Cud Company. As a matter of fart, the peculiar class of coal to which I am referring is obtained only in the Westport district. To resume' the history of the company, however, I must explain that before it was formed, the Mokihinui Coal Company had been in existence for several years. In the early stages of its existence it built its own railway from tbe mine to the mouth of the Mokihinui River, as it was thoughtchat the company would be able to ship the whole of its coal over tbe Mokihinui bar. After the railway had been constructed, however, it was found that, with the exception of a few cargoes which had been sent out of the river, the place was quite unsuitable for the shipment of coal The, Mokihinui Company then asked the Government to build a railway from the Ngafcawau River to join the company’s line at Mokihinui, the company agreeing to guarantee a return equal to 6 per cent on the cost of construction. -An Act was passed in September, 1890, whereby' all lessees holding coal leases in the Mokihinui district, were caHed upon to contribute, in proportion to the acreage held, to any deficiency that might occur, short of the 5 -per cent on the cost of constrution. Prior to the line being, opened, the Westport Cardiff Company was established, but the ■new company had• nothing whatever to do with asking the -Government to provide the Act in question. The Act came into operation be!ore we were able to get our preliminary works ready, and before we were called upon to put out coal, in accordance with the terms of our lease. However, shortly after the line had been opened for traffic, the Mokißtimi Company suspended operations, by reason of the failure of coal, and, consequently, was utterly unable to contribute one penny to the revenue of the line. Ultimately, the company went into liquidation, after selling its section of the line to the Government. By this means, the burden of the penal clauses of the Act fell upon the Cardiff Company. We commenced to put out coal in 1894 and from that time up to the time that we stopped operations, we more than complied with aU the. Conditions of our lease, especially with regard to the output clauses. To go back", a little,; however, I may say that-' the “cost of. the line from

Ngakawau to Mokihinui, to complete the junction with the . Mokihinui Company’s line, was set down at £28,000. The cost- ■ of the line now stands at dose, on £5.6,000, which., as- you will sec, makes the Cardiff Company’s liability just double, or 10 per cent on the first stated £28,000. Well, notwithstanding the fact that Cardiff Company has more than fulfilled its conditions with regard to output, the deficiency in connection with the guarantee of 5 per cent has steadily mounted tip } ear by war against the company, until it is now claimed as neaxiy £4OOO. _lt must _be borne in mind that on the original portion of. the line from Westport to Ngakawaii,. over which the Westport Coal Company's traffic pauses, no such' guarantee had been made, and the lessees in that district were not called upon to make up any deficiency whatever, yet a very large section of that line remained practically uurcmunerative fcr nearly twenty years. “ During our operations, extending over the first two or three years, _ we were beset with very serious difficulties in the shape of stone faults,, rendering it very difficult to get out any fair quantity of payable marketable coal. Ultimately we were compelled, under the advice of our managing engineer, to abandon the whole of our original workings, on which wo had recently expended upwards of £6OOO, in new plant and material, in addition to the original cost of opening up this district arid providing the first plant. In order to maintain our output, we proceeded to open an entirely new mine on our lease. Thus gave good promise at the outset, but, after expending close on £3OOO, the whole of the coal in this portion of our workings failed 1 on account of the same disturbances and faults that we bad met with in the other portion of the lease. Steps were immediately taken to meet this contingency by prospecting in other portions of the lease, and we finally fixer! upon a spot which promised an output for tbe next twenty years at the rate of about 70,000 tons a year. The cost of opening up this, however, was, approximately, £12,000, arid as the company had already expended upward. of. £40,000, which comprised nearly the whole of its capital, and all the profits that were made upon the coal previously, it was.found impossible for the company to open,out this-new area unless further capital was provided for so doing. At this juncture, in view of the disturbed nature of the country through which we had already passed, and of the continually increasing liability for deficiency under the Act, combined with the fact that the haulage from Seddonyille (where our mine was situated) to Westport, amounted to 3s 2d a ton, as against the Westport Coal Company’s haulage rate from Wadmangaroa at 2s Id, we came to the conclusion that we had a handicap which we were nob justified in facing, having regard to the large amount of money expended during the • previous seven years of the existence of the company. “It should he noted here that from the inception of the company until it closed down, the shareholders never received a single penny on their investment. The district is now shut up, and a railway nominally valued at about £130,000 is practically lying idle. Before the company closed down, it was decided to interview the Government, and the Government offered to grant a subsidy of pound for pound up to one-half of the cost of the new works, to waive all claims in respect to past liability for deficiency, and royalty, and make some concessions with regard to haulage. We agreed that if the Government would do this, we would proceed at once to raise out proportion of the necessary funds to further develop the mine and keep the district open. In the meantime we were compelled to close down, and advised the Government, who sent their inspecting engineer to report on the proposed work, and his report was most favourable on the entire scheme. It was agreed on his suggestion, that a preliminary prospect should be made, fonriing part, of the whole work, at a cost of about £BOO, the Government .providing pound for pound up to half that amount. In. the event of the preliminaiy work proving satisfactory, the Government was asked to put in writing ite .willingness to carry out its own proposals for the completion of the main scheme in order that we xniilffit at once make arrangements •to raise the necessary funds, and thus save time. The Government refused to comply with this request* or to bind itself in any way, and finally gave us notice that unless we unconditionally accepted the amount promised for the preliminary prospecting, it would take steps to put an end to the unsatisfactory state of things as far as the company was concerned. My Board had no alternative, as prudent business men, but to decline, and, after a final appeal to the Government, which met with a refusal, we were reluctantly compelled to go into liquidation in April last.' In the meantime a fire broke out in the mine by spontaneous ignition,- and we were compelled to expend several hundreds of pounds in attempting to pub out the fire. The Government has since determined our lease and re-entered into possession of our property, together with the whole of the permanent improvements costing several thousands of pounds. In addition to this, the Government has also seized and taken possession of the whole of our movable plant and machinery, and has even impounded our office' furniture, so that the company has beeu literally denuded of everything it possessed. The indebtedness of the company to the Government that we acknowledge amounts to about £2140, for royalty, but in addition to this the Government now claims upwards of £3400 for the so-called deficiency, and this latter claim we decline to acknowledge.

“ Our reasons for doing so are, firstly, because the origin of traffic should be made as from the coal mine, and not as from Westport ; secondly, because, inasmuch as the Mokihinui Company failed absolutely to keep any conditions of its lease from the time it started until the time it went into liquidation, and never contributed its proportion of revenue to this section of tli railway, it is unfair that we should be called upon to bear the burden of another com pany’s misfortunes; arid, thirdly, because the Government, having purchased the property of, and having, become successors U), the Mokihinui Company, has also failed l<> contribute to the revenue in a like manner; and finally, -because the''Government, after being very strongly and. continually urged by us, agreed to bring in legislatiou’to relieve ns of this liability, in consideration of our raising and expending a sum of £SOOO in further developing the mine. We raised and expended upwards of £6OOO. The Westport-Ngakawau Extension Act, 1897, was .paissed, but the Government refused to give us the promised relief unless we raised and expended an additional £SOOO, althongn we have satisfied them that we had already expended the larger sum-. . It is not generally known that, although this deficiency of 6 per cent is claimed on the working of the section known as tne Ngakawau Extension, the whole of the Westport line (of which this forms a small part) shows, by the published returns re March, 1899, a return of £l3 3s fid per centof earnings on the entire cost of construction. • “ I may say that, in- the case of ©very co-.l mine on the West Coast, and,-probably; in that of every coal mine in New Zealand, concessions have been granted, and some of them are of a most important and extensive character, notably with’regard to the Westport Colliery Company in the early days of its existence. .• I think the concessions wererightly and fairly made, otherwise it "s probable that none of these coal mines would be in existence. In contrast to this however, the Westport-Cardiff Company has repeatedly applied for ordinary fac'd! ties to enable it to carry on its operations, but it has never received a single concession, a refusal being met with in every instance. “ The position briefly now is that the company, after spending upwards of £40,000 in this concern-, and those responsible for its conduct having brought the best business ability to bear on its affairs, finds itself in the position of being practically stripped of everything it possesses. The district is closed, and is likely to remain closed, unless such facilities are given as we have repeatedly applied for, but have failed to obtain. “It is most important to note;that the whole of the revenue derived -from ri,e traffic of the Westport, lines""goes to ' the' funds ox the W’estnort'Harbour.“Board. ;n

order to provide for the payment of interest and principal of their loans. The revenue is now nearly all derived, at the present moment, from one company —the Westport Coal Company. It is, therefore, manifestly in the interests of everyone concerned that steps should be taken to open rip the district that is now closed. I may add. that the Westport-Cardiff Coal Company’s contribution by way of revenue to 'tills Board’s funds amounted approximately, for. coal alone, to about £9OOO a year. I may say, further, that the' company, from its inception, paid in wages in the district, on the average, from £12,000 to £14,000 a year. ,“In conclusion, whilst offering no criticism on the position of affairs, I venture to think that- the facts stated are. not" calculated to inspire confidence in investments in the district-referred to; and I affirm that the district will never be opened by ordinary investors under existing conditions respecting deficiency clauses -and, haulage. This district is the most _ disturbed and' ‘faulted’ of any other portion of the Westport coalfields.”