I.—3A.

[P. B. COOKE.

14

Now, if I may just interpose there —some members of the Committee may think that looks a tall order, but I have a suggestion to make in regard to that claim which I think will satisfy you. We have been informed that on the 19th March, 1930, the shareholders of the company passed a resolution purporting to authorize the directors to transfer the company's rights under its various concession agreements to the Crown, subject to the Government settling the claims of creditors and shareholders either by negotiation or by arbitration. Wo desire to say that our clients were not parties to and do not consent to this resolution. On the contrary, they rely on and desire to keep open whatever legal rights they have and amongst these is, we submit, the right to have their claims dealt with under the provisions of section 29 of the Native Land Amendment and Native Land Claims Adjustment Act, 1929. For this reason, we address this letter to you, and we ask you to treat it as an application by our clients to have their claims dealt with under that section. We have sent a copy of this letter to the Hon. the Minister of Native Affairs, and asked him to treat it as addressed to him also. Now, sir, before I deal with these claims—you will have noted that there are two of them—may I just remind the Committee of the position with regard to what was called yesterday the moratorium. As I understand the position—and if I am wrong no doubt those who follow me will correct me — the initiation of the moratorium was in 1915. Under section 19, subsection (1), of the Act (No. 63) of that year —I am giving the reference in case you desire to refer to it —the moratorium was fixed for a period until two years after the end of the war. Then, sir, under section 19, subsection (5) of the Act of 1921 (No. 62), it was extended to the 16th September, 1922. And then, sir, under section 28 (1) (e) of the Act of 1923 (No. 32), it was made perpetual. But, sir, under section 29 (1) of the Act of 1929 (No. 19), it was removed. lam merely giving the references to the general position, because I think it may be of some assistance. Now, sir, that brings me to the circumstances under which the advance of £14,000 in cash was made by Sir John, or, as he then was, Mr. Houfton; and, if the Committee will allow me some small indulgence, I would like to refer in some little detail to the situation when he advanced the money. Under the Order in Council of the 16th September, 1921, which is contained in the New Zealand Gazette of that year, Volume 3, page 2363 —I am not going to trouble you with a lot of references, but I just wish to give you an outline of the situation at the time the advance was made by Mr. Houfton —under that Order in Council the period for the construction of the line was extended on certain conditions, one of which was that the Order in Council should take effect unless within twelve months from its date a certificate, signed by the President of the Board, that all moneys due for royalties up to the date of such certificate had been paid was published in the New Zealand Gazette. Now, sir, I think I am right in saying that the moneys that would have been due in the following twelve months were arrears amounting to something like £35,000. The Order in Council was passed on the 16th September, 1921, and the arrears up to September, 1922, owing by the company were something like £35,000. I think, as a matter of fact, that figure is absolutely accurate. By section 19 of the Act of 1921 that Order in Council was, I think, validated, but varied to this extent; that of the moneys that the company was required by the Order in Council to pay to the Board within twelve months £6,000 had to be paid by the 30th June, 1922 —three months before the certificate was required. So that as a matter of practical politics the Tongariro Timber Co. was in this position : that it had to find £6,000 by the end of June, 1922, and a further £29,000 by the end of August, 1922, or it would have been liable to lose its concessions then and there. Now, sir, it cannot be denied that at that point of time the company was in a desperate plight financially, and it cannot be denied that the people who came to its rescue and saved it from complete disaster were Mr. Houfton, Dr. Chappie, and, to a very minor extent, Miss Wright, who, I understand, found £1,000. Ido not represent her or Dr. Chappie, but I understand that that is the position. Now, the point is this : Dr. Chappie provided, I understand, the £6,000. That was paid before the date that the Act required —before the end of June, 1922. Then the remaining £29,000 which had to be got within the next three months was provided, as to £1,000, by Miss Wright, and as to £14,000 by Mr. Houfton, and as to £14,000 by Dr. Chappie. As a matter of fact, sir, I have said that Dr. Chappie provided £14,000, and so he did so far as the Tongariro Timber Co. was concerned ; but I think I am entitled to mention that Mr. Houfton not only provided his own £14,000, also actually lent Dr. Chappie the £14,000 that Dr. Chappie advanced. That, however, is not now material, because the £14,000 that Mr. Houfton lent Dr. Chappie was recovered by Mr. Houfton from Dr. Chappie in certain proceedings that had to be taken by Mr. Houfton for that purpose afterwards. So that it comes back to this : that the Committee will be concerned, in so far as this claim is concerned, only with the sum of £14,000 that was advanced by Mr. Houfton on his own account. Now, sir, I want to read one or two very short extracts from certain letters that about that time Mr. Atkinson wrote to Dr. Chappie, because those letters put very pointedly, and quite sufficiently for the purposes of this Committee, the yeoman service that was done for the company by the provision of these moneys by Mr. Houfton. Here is an extract from a letter written by Mr. Atkinson to Dr. Chappie, dated the 7th August, 1922 : — Under these circumstances I want to make a modified proposal to you and Mr. Houfton to help me through. You have now worked long enough with me to have tested all my figures, promises, and strongly definite anticipations as to value and demand for the timber, and have, I think, learned to rely upon such with full confidence. I have often told you how much I owe to you for the invaluable assistance you have given me, from day to day, over a long period of time, and to Mr. Houfton also I owe so much for his understanding appreciation and substantial generous help even after disappointment, and to you two therefore I am very much indebted. Then, further on in the letter, he says : — I would add that if the Belgian contractors should undertake the building of the whole line on the scheme now being considered by them it should be accepted, and I would suggest that then you and Mr. Houfton might share 6d. per 100 ft., on the basis of 4d. to you and 2d. to Mr. Houfton, on the 1,400,000,000 ft. as a sufficient reward, seeing that the whole problem would be solved forthwith. I shall be glad if you will see Mr. Houfton at once and put the whole proposition before him and try to get it concluded, so that we may send out the £29,000 immediately. This will have a magic effect in New Zealand, and will enable us to complete our plans in full within a comparatively short time. The only other extract I desire to trouble you with is not from that letter, but is part of what I understand is an extract from Mr. Atkinson's official report to his company in New Zealand, dated London,