LEASE OF COALMINE.

New Zealand Herald, Volume LXVII, Issue 20640, 12 August 1930, Page 12

LEASE OF COALMINE.

THE MacDONALD PROPERTY.

A REPLY TO CRITICISMS. STATEMENT BY MR. COODFELLOW The claims made by Mr. W. I'. Endean, M.P., and Mr. H. R. MacKenzie, in regard to tlio negotiations for the lease or sale of the Mac Donald State mine near Glen Afton, aro answered by Mr. William Goodfellow, managing director of tho New Zealand Co-operativo Dairy Company, Limited. Irr- a statement yesterday Mr. Goodfellow said:— "Tho Glen Afton coalfield is owned and was developed by the New Zealand Cooperative Dairy Company for the express purpose of providing cheap and adequate supplies of coal for the company's dairy factories at a period when adequnto coal for its requirements was difficult to obtain. Tho company's factories and suppliers consume approximately one-third of tho present output, tho remaining balance being disposed of throughout tho North Island, principally to freezing works and other co-operative dairy companies." Due to tho Glen Afton Company enjoying tho bulk of tho slack trade there had been 110 necessity to join any carbonisation scheme for tho utilisation of slack, continued Mr. Goodfellow. The company had developed a permanent outlet for its coal and was not a member of tho Slack Association. The company had the largest output of coal in the North Island. Largely increased output, however, would exhaust tho oxistiug inino in 35 to 40 years.

Negotiations For New Field. In order to provide ample coal reserves for tho future dairy industry the directors considered it advisable to acquire tho adjoining State coal field, which was in reality a portion of tho field at present operated by the company. Negotiations for the purchase or lease of the Mac Donald property were commenced with tho Reform Government and had there been any urgency the property could have been acquired several years ago.

The Reform Government carried out preliminary development work on the property but due to tho necessity of building a railway, costing £120,000, it was considered tho cost of operating the mine would bo excessive. For that reason tho Reform Government decided to sell or leaso in preference to operating the mine themselves. Tho United Party took the same view and it has been common knowledge for some years that tho Government was prepared to dispose of the Mac Donald coalfield and thereby convert a liability into an asset. Quotation to Power Board.

Had Arapuni not defaulted tho Glen Afton Company would in any case have acquired the property. Immediately following the failure of Arapuni tho Government withdrew negotiations. The directors of the Gien Alton Collieries quoted tho Power Board a low price for crushed coal and slack for a ten-year contract (or until Arapuni was again available) for tho express purpose of enabling the company to secure tho adjoining State property. The New Zealand Co-operative Dairy Company was primarily not a divi-dend-earning concern, but in reality a service organisation operated by tho dairy farmers of the South Auckland Province who in turn would bo very largo com sumers of electric power to bo supplied by the Auckland Electric-Power Board until such time as Arapuni again functioned.

"It has been staled that a lower prico would have been obtained bad tenders been called," said Mr. Goodfellow. " Such would uot have been «tho case and in all probability only ono price would hnvij been submitted. The price charged m the Power Board in the past by Renown and other collieries for this class of c-r-il was 17s 6d, or 2s a ton higher than the Glen Afton quotation." Incomo Tax and Royalties.

Referring to the statement of Mr. W. P. Endean, M.P., Mr. Goodfcllow said Mr. Endean's remarks were incorrect. "In the first place," Mr. Goodfcllow continued, "the Glen Afton Company did pay income tax on all coal sold in competition with other collieries. The difference in royalty payable to the Government (i.e., 8d and Is a ton) would amount to £2509, not £25,000, as stated by Mr. Endean. It would bo emphasised, however, that Is a ton royalty is an excessively high figure. No other colliery in the Waikato is paying more than an average of approximately half that sum, 6d a ton, which is now largely considered a reasonable royalty for Waikato coal, and is all the Glen Afton Company have paid during the last seven or eight years. "Therefore the royalty payable by Glen Afton Collieries to the Government, 8d a ton, is in reality roughly 2d more than the price paid by any other Waikato Colliery (other than Renown). It would bo of interest to know just how much of the Renown royalty of Is a ton is actually paid to the land-owners and I}° W much goes into the pockets of a few gentlemen in Auckland." Gross Exaggeration Alleged.

Referring to Mr. H, R. Mackenzie, Mr. Goodfcllow stated that Mr. Mackenzie complains of the unfair advantage secured by the Glen Afton Company, which, in view of tho above facts, must be regarded as little more than an excuse to the shareholders of tho Renown Company. Glen Afton was operating under almost identically tho same circumstances ns other collieries in the Waikato district and other than the business of the New Zealand Cooperative Dairy Company had absolutely no special privileges and did pay income tax.

"It appears to mo," said Mr. Goodfellow, "that both Mr. Endean (Reform member) and Mr. Mackenzie (chairman of the Reform Committee) are particularly anxious to discredit the United Party and in consequence havo made statements which are not only incorrecL but 'amount to gross exaggeration."