H.—3o

52

The Board replied to the telegram of the 18th stating that the contract contained no provision for including the " Codrington." The Board received a reply reading as follows : — Directors astonished your Board making contract shutting out " Admiral Codrington " from frozen-meat trade without at least first giving us some notice or reason. As your Board is aware this company had at large cost purchased and specially equipped boat for New Zealand trade, and had only sent boat Argentine during slack period New Zealand trade and she is now awaiting instructions come New Zealand. Your Board's action will be most disastrous this company. Is there no saving clause in freight contract through which position could be protected ? All freight contracts prior establishment of Board contained a clause that if any other boat in trade was prepared to carry freight at less rate than contract stipulated they must reduce freight or owner free ship by boats outside contract. Is there any such clause in your contract ? While it is against our interests reduce freight yet we are prepared to do so rather than have boat idle which frankly we cannot afford especially after your Board facilitating sale of the company's works to the biggest combine in the world. Please reply promptly as boat is waiting for cabled instructions. The Board then replied as follows : — In reply to your telegram of 23rd instant freight contract contains no such clause in respect to refrigerated cargo as referred to by you. When Lysnar discussed with the Chairman of Board the sale of company's works to Vesteys he informed the Chairman that ship was to be sold. Meat Board never received any request from any one connected with your company to have ' Codrington " included in new contract although your Board and the receiver of your company must have known negotiations were going on. Mr. Jones says, at pages 776 and 777, that Mr. Lysnar was well aware that the shipping season commenced on the Ist November, 1923, and that it would take some time to negotiate the contract, and Mr. Jones adds that the fact that the Board was negotiating in London was in the newspapers in New Zealand. A further telegram, dated the 29th January, 1924, to the Board, contained the following : — \our telegram yesterday's date received last evening. Directors deplore fact your Board has not provided contingency clause in freight contract for cheaper freight if available as was always provided in contract prior establishment of Board. On the 25th February, 1924, the secretary of Mr. Lysnar's company wrote to the Chairman of the Meat Board a letter reading as follows : — We regret to say that since our last communication with you we have received cable advice that the mortgagees who hold a mortgage for £60,000 over the " Admiral Codrington " are under the impression that we are abandoning the steamer, and consequently they propose to take steps to sell her. We sent the following cable to our agents in reply : " Assure Bank Scotland we have no intention abandoning ' Codrington.' Reason unable arrange load from here owing action Meat Board unjustifiably excluding ' Codrington ' from current season's frozen-meat contract. We have asked be included next contract meantime going into matter with New Zealand Government." The directors of this company desire me to let your Board know the position, and to point out that your Board's attitude in excluding the ship from the New Zealand trade is largely responsible for the impression created, which will, if they carry out their threat, mean a still further very serious loss, as the ship has cost this compa.ny about £400,000, and at the current rate of freight she could more than earn interest on her total cost, providing she is kept running with Homeward cargo only, which your Board has barred her from obtaining. I am instructed to state that, as your Board has failed to assist or protect the position, if the mortgagee forces a sale we mil be compelled to seek compensation from your Board, or the New Zealand Government. Two days prior to that Mr. William Douglas Lysnar had made a declaration which reads as follows :— In the matter of the Stamp Duties Act, 1923, and in the matter of the Poverty Bay Farmers' Meat Company (Limited). I, William Douglas Lysnab, of Gisborne, sheep-farmer, do solemnly and sincerely declare as follows 1. I am the chairman of directors of the above-mentioned company, and have held that office ever since the company was incorporated. 2. The nominal capital of the company is £500,000, of which amount £195,860 is unissued. 3. On the 13th day of February, 1923, the company was indebted to the National Bank of New Zealand (Limited) in about the sum of £350,388 15s. 3d., and at the date of the sale hereinafter referred to owed the said bank a sum of about £300,000.