SALE OF MINING LEASES.

Timaru Herald, Volume CXXV, Issue 18583, 2 June 1930, Page 9

SALE OF MINING LEASES.

Allegation Of Corruption.

PROSECUTIONS MAY FOLLOW. (Unltod Press Association—By Boetrio Telegraph—Copyright.) BRISBANE, May 31. As a result of discoveries by the Crown Law Officers during the present visit to Chillagoe regarding mining affairs, it was stated authoritatively that criminal prosecutions would follow. David Hughes, a miner, is alleged to have admitted that he gave an interest in Flourspar claims to Mr Theodore, because he was relying on Mr Theodore, as Premier, and the influence he would wield, to dispose of ore. Investigation of mining leases at Mungana and Chillagoe has been going on for some time, as a result of charges of graft against Mr W. McCormack, former Labour Premier of Queensland, but Mr Theodore’s name has been mentioned once only in the cables, and that in evidence regarding a remark by Mr McCormack. In the present charges against Mr McCormack a Royal Commission was set up to investigate t his alleged interests in the Mungana mining leases, and the assistance given by his Government to the Chillagoe smelters some years ago. Mr Peter McCaffrey, senior inspector of the Audit Department, stated that while Mr McCormack was Premier in 1926. he told Mr McCormack that the Chillagoe smelters were an absolute "white elephant,” the losses on which were £IOO.OOO a year. Mr McCormack asked him to make a thorough investigation and furnish a report to him, not to the AuditorGeneral. Witness also told him that Mr Goddard, who was closely identified with the Mungana leases, was greatly worried about Mungana, the capital cost on which had risen to £200.000. Mr McCormack replied: "What has he to worfy about over Mungana? That is my pigeon, and Theodore's, not his.” Mr McCaffrey expressed the opinion that the Auditor-General's report in 1923-24, concerning the Chillagoe smelters had been falsified. At a subsequent sitting of the Commission, counsel for Mr McCormack obtained an injuncion restraining the Royal Commission from producing or disclosing the whole or part of Mr McCormack's bank account. Peter Louis Goddard, late general manager of the Chillagoe smelters, said that when the company was formed Mr Theodore's shares were put in the name of Goddard’s wife and son, he thpught. Cross-examined by the Commissioner, he said that only 15.000 shares were issued, and 15,000 were held in reserve. Mr Theodore did not authorise Goddard to take up this share for him. He did it without Mr Theodore's knowledge. He did not tell him because he did not think it was worth while. He took them up for Mr Theodore because he was very friendly with him about that time. Mr Theodore did not learn about it till about eighteen months later. Goddard thought Mr Theodore w r as pleased when he found the shares had been taken for him. Goddard paid Mr Theodore's share. Seven hundred of those shares were allotted to John Louis Goddard, and 850 10 Johann® Goddard. They held the shares. 1550 in all, for Mr Theodore.

At another sitting of the Commission. Peter McCaffrey said that he considered that the Auditor-General's report in 1923-24 was falsified, inasmuch as it stated that it was essential to write £281,000 off the Chillagoe Smelters, knowing in that amoimt was £46.000 interest owing to the Treasury. Mr B. Fahey (for Mr McCormack): “Is that not the usual practice with State enterprises?” Mr Justice Campbell: “We fervently hope not.” Mr Fahey: "But it is the practice, is it not?” McCaffrey: "It is done.”