NAURU PHOSPHATES.

New Zealand Herald, Volume LVI, Issue 17242, 19 August 1919, Page 9

NAURU PHOSPHATES.

; LARGE SUPPLIES IN SIGHT. HISTORY OP NEGOTIATIONS. BRITISH COMPANY'S POSITION At the outbreak of war Nauru Island ■ Belonged to Germany, but along -with other Pacific Islands belonging to the enemy it was taken in occupation soon after the declaration of war, and the troops detailed for the duty happened to be Australian troops. It was quite a bloodless conquest. But for the deposits of •phosphates, Nauru is of no value, and even under German rule the phosphates belonged to a British company, the Pacific Phosphates Company, Ltd., and this company also held all rights over similar deposits on Ocean Island. At the outbreak of war, two-thirds of the company's white staff of 56 were British, but a month after the outbreak of war these Britishers were expelled from Nauru by the German autnonties, and transferred to Ocean Island, which was, and still is, British. Two months later, in November, 1914, an armed guard from the Australian Expeditionary i orco was scut from liabaul, the detachment being carried in one of the company's steamers. The company held rights over Nauru from the German Government on a 99 years' lease, and it has still the same tenure from the British Government in respect of phosphates on Ocean Island. It is quite impossible to get reliable information as to the amount of phosphates on Nauru Island. The Germans estimated that the total was three hundred million tons, of a total value of seven and a-half milliards of marks. British experts have given such widely differing estimates as 42,500,000 tons, arid 414.000,000 tons. The Nauru phosphates arc of high quality, said to have been worth £3 per ton on the wharf at Nauru before the war. Ocean • Island phosphates were worth rather less than ha;f this price. The Pacific Phosphates Company has a nominal capital of ■ £1,200.000. of "which £787,500 has been ; J issued. The company has paid dividends I at the rate of 30 per cent., and 25 per ! 'cent., but during the war years the profits , I seem to have shrunk considerably, and the . rate of dividend in the first years of the > warthe last for which information is i available 7£ per cent. The output > from Nauru before the war was from ' 90,000 to 100.000 tone annually, and from I , Ocean Island the output shrank during the i ' war from 250,000 to 100.000 tons, the re- ! duction being due principally to scarcity > of shipping. The Mandate. [ This company had control of all the \ phosphate deposits south of the Equator, . a situation which never could have been , satisfactory to New Zealand and Austra- [ Ha. Several times the Government of l New Zealand was asked to consider the [ question of acquiring rights over some phosphates in some Pacific island, but . the opportunity never offered until the 1 war settlement made it possible to vary , some of the existing arrangements. Mr. , Massey first mentioned the matter in a despatch dated January, 1915, sent . through the Governor-General to the SecI retary of State for the Colonies. Several times since then the New Zealand Government has sent correspondence, and Mr. Massey has on more than one occasion discussed the matter with representatives of His Majesty's Government in London. Alwavs (the reply was ihat the business could not be dealt with until the final settlement was being made at the end of the war. When the end of the war did come, ' the allocation of such possessions as the Pacific Islands had to be made under the mandatories heme, which was part of the League of Nations idea. The man- ' datories for all these islands had to be given to Britain or some Dominion. Australia claimed Nauru by right of conquest and possession, but control ofj the phosphates by Australia might not have been very much better for New Zealand than control by the British company. At any rate, Mr. Massey opposed Mr. Hughes in this, and in the end the mandate was taken by the British Empire. i and a proposal made by Mr. Massey was adopted. The mandate went to Britain, | and in turn the British Government made ' an agreement with the Governments of i , Australia and New Zealand for the ad- ' ' ministration of the Island of Nauru, and [ for the distribution of the phosphates , from the island. Under the agreement ; it is provided that the administration of the island shall be vested in an ad- . ministrator. The first administrator is ' , to be appointed by the Australian Gov- i f ernment for a term of five years, and ! thereafter the appointment is to be ' made in such manner as the three Gov- j ernments decide. There is also to be a Board of Commissioners, one to be apI pointed by each of the Governments , parties to the agreement. The adminis- _ trator and the commissioners are to exercise all the ordinary functions of . government! on such a tropical island, except the levying of taxes. All the ;_ revenues are to come from the sale of the phosphates. ' j Claims of the Company. ' The arrangement for the purchase of the phosphates by the three Governments • jointly will, of course, have to be ratified by the New Zealand Parliament, The J company was a British company, and its 1 rights were indefeasible. The British - Government could not simply confiscate J the property of the company 'in the man- • ner that it might have done - had the eom--1 pany been German. The company paid to • the German Government royalties for the 3 phosphates exported at the ra-te of about Is 6d a ton. Those German rights have a been extinguished, and the company will 1 now become a concessionaire of the British 1 Government. But the company has erected plant for quarrying the rock and " for grinding it and shipping it. There 1 have been as many as 1500 workers engaged in the enterprise, so that it must be admitted that the company has built up a s considerable goodwill, for which the British c Government as mandatory ought in good conscience to pay in taking over the rights V of the company. Purchase of the rights 6 of ithe company is desired by the repre--1 sentatives of all three Governments pars ties to the agreement, and the agreement d lays down terms on which the purchase may be made. The company asserts that its rights are worth three millions sterling, but this is a matter on which there may be strong differences of opinion. It seems to be quite safe to say that the quantity of phosphates available from the island is sixty million tons, and at three millions as the purchase price, this works out at 3 a shilling a ton. i- As the agreement declarse the propore tions in which the phosphates are to be .. apportioned among the three countries— s Britain, Australia, and New Zealand—so d it declares that the cost of purchase must .. be borne in the same proportion by the a j Governments concerned. This part of the f . ; agreement is not yet quite definitely set- ;. irled, for it is still left to the Govern- .- ments by agreement to come to another li agreement as to how the cost is to be apportioned, but if no such other agreement is made within three months of the coming into force of the agreement, then the position is as stated—that the several Governments must bear the cost in the same proportions as those in which the output is to be allocated among them. These proportions are: Britain. 42 per ii i cent.; Australia, 42 per cent. and New e ; Zealand, 16 per cent.