For Information.

N.G. Goldfields Shareholders Ask

Chairman Answers Many Questions at Annual Meeting.

There was some animated discussion at the third annual general meeting of New Guinea Goldfields, Ltd., held at 67 York Street, Sydney, on March 27. Mr. F. Hambridge (Chairman of Directors) presided.

The following is a slightly condensed report of a discussion which took place on the motion of the adoption of the annual report.

Mr. Thompson: It is difficult to dis cuss the balance-sheet because a balance-sheet of companies such as this does not give sufficient information.

That is the system that prevails, but the result is that the shareholders in these companies know nothing; they are not supposed to know anything.

I am concerned about the rumours in the city, and I think this is an opportune time to mention them. I am not here to cause turmoil, but the posi tion is that people are making all sorts of charges against this Company, and so affecting the market. I have been asked by quite a number of people why it is that the London market gets information before us. For instance, I think it was in February last that the shares in the London market advanced 1/-. Afterwards the shares on our market made an advance, showing clearly that the information in regard to the Company got to London before it got to New South Wales. In view of the fact that the information has to come from this office it would indicate —although I do not say there is any thing wrong—that the information is supplied to London before it is sup plied to us, which, from our point of view, is a very wrong thing. You are

here to study our interests and not those of the London shareholders. We have a great respect for the London shareholders but we are here to look after our own interests.

There is another rumour going around which is somewhat personal.

I do not want to raise trouble, but it is preventing me from buying shares and it is also preventing me from selling shares, because the market won’t go up. It is reported that one of your leading officials is physically unfit to visit the leases. That is an unsatis factory state of affairs. If he is unfit to visit our leases, how is it possible for him to report to this Board that we should purchase leases which he has not seen? There is a tribute granted to Mr. Smith, at Bulolo, and there is another tribute granted to a Mr. Wild, at Callai, or some name like that. But that officer may not have ever seen those people. These areas I speak of are in the vicinity of 7,000 feet above where he happens to be.

Another thing that is rumoured is the purchase of the Bulolo hydraulic plant from certain people for £4,000. That is a lot of money to me at all events.

I understand that that hydraulic plant has been a failure, and that we are running that plant at a big loss.

There is another matter to which I want to refer, which is a personal one.

I am not trying to cause trouble; I am only doing what I consider to be the right thing in the interests of share holders. Mr. Livingstone, whom I do not know at all, was given a tribute, and from that tribute he derived some thing like £40,000. If Mr. Livingstone can secure £40,000 from a tribute, I want to know what our Company was doing to let such a valuable asset get away. I also understand that Mr. Liv ingstone is a sick man and I understand that it is the custom of this Company to examine medically all their em ployees before they appoint them. I understand that Mr. Livingstone was given an appointment in the Company, and that he only remained eight weeks.

I heard the chairman refer to this mill at Golden Ridges. I am told that it was necessary, in order to test that mill, to send ore to London. Well, there are two kinds of ore from the mine. You can clean the ore or you can send the original ore. Our people, instead of sending the ordinary ore which the mill in London would have to treat, sent clean ore. The result was that when the mill arrived it was considered satisfactory to deal with clean ore, but when it arrived at Gol den Ridges it was found to be quite unsuitable. The result is that your mill is net working full time, and Heaven knows when it will be working full time.

I could go on enumerating other

things but I think I have said enough for the shareholders to realise that they want to sit up and take nourishment.

These rumours about the city cannot be allowed to go on if we are going to make a success of this mine. I am of opinion that if the rumours which I have mentioned are correct, or even half correct, we should take drastic action.

I have not the slightest idea what fees your directors are paid. I am one of those people who always believe that when the public put their hard earned money into a concern, and there are lots of people who have had great difficulty in paying for their shares in this Company, if the mine is unable to pay a dividend I consider that the directors should work in an honorary capacity. They may be doing it, for all I know. If the directors will not work in an honorary capacity, then I ven ture to say that from this meeting to-day we should be able to elect a board of directors who would be will ing to do so.

I am not going to move a vote of censure on the Board. I do not know enough about them to do it. I know that we have Mr. Hemsley on the Board, and he is a man of such good repute that when you see that he is on the Board you know that the Board is all right. I assure you that you want to do something in your own interests. I shall be only too pleased if our chairman and our directors can deny my statements and explain them away to you.

Mr. Daly: Mr. Thompson made some remark about the fees that were paid to your directors. May I ask what they amount to?

Chairman: I think they are men tioned in the Articles of Association.

Mr. Lyons: Why does not the chair man give the information?

Mr. Daly: Why don’t you answer the question? What are the fees that are paid to you, Mr. Chairman?

Chairman: £250 per annum.

Mr. Daly: Is that all you are paid?

Chairman; The London directors are not paid anything.

Mr. Daly: I am not asking about the London directors. Are you paid more than that?

Chairman: I myself am because I de vote the whole of my time to the Company.

Mr. Daly: What are you paid?

Chairman: £500 per annum.

Mr. Daly: Is that in addition to the £250?

Chairman: Yes.

Mr. Daly: What salary does the general manager at New Guinea get?

Chairman: If you care to ask me anything about my position— Mr. Daly: I am asking about the gentleman in New Guinea.

Chairman: Concerning the salaries of any of our staff, we do not propose to discuss that at this meeting.

Mr. Daly: Why not? Here are the owners of this property, and if you want any evidence of the amount of interest that is taken in this Company, of which there are thousands of share holders in the City of Sydney, the attendance here to-day unquestionably speaks the that the conduct and management of this Company is rot ten, absolutely rotten. I take second place to no man in my opinion of Mr.

Hemsley. Mr. Hemsley stands in this city preeminently above most men, for integrity and ability. I am satisfied in

my own mind that Mr. Hemsley’s association with this Company has led to thousands taking shares in it. I might make the same remark with re gard to the other directors. But the chairman who refuses to tell you people what salary you pay to your employees, is not the right man in the right place. When you see a Com pany like this, that has expended in your interests in New Guinea upwards of half the amount that has been spent on that gigantic bridge, and you have not got a red copper out of it, there must be some good solid reason for it. The tributes of your Company have been let to several men, one of whom made £40,000 out of it, and there are several others who have done very comfortably. The whole concern is kept away from you people. Why, look at the reports which are published every day in the “Herald.” Who in the world understands them? Nobody.

I have been mining for the greater part of my lifetime. I put money into this concern on the reports of men who have been there, and what have we

got? Nothing. Unless you people wake up and make some move the day will come when you will be told that there is nothing there, and that your four millions of money have gone to the wind.

Mr. Palmer: I want to say that the shareholders at this meeting to-day are not the owners of this Company. They are only a very small proportion of them. I represent clients who prob ably own more shares than the whole of the rest of the people here. I say it is a shame that these remarks should be made. For a man to come here and make remarks like that with out giving you a chance —well, I say that he does not know what he is talking about. The management of this Company is not rotten. It is very good.

Mr. Wright: Is not the majority of the shares in this Company owned by English shareholders? It seems to me that it is not only controlled by the Mining Trust but by the English share holders. While the English sharehold ers own the majority of the shares in

this Company it will never do any good.

Chairman: In answering the discus sion that has taken place, I do not think there is any doubt that the gentlemen who have spoken have the best interests of the New Guinea Gold fields at heart. . . . Certain share holders have come along and made charges which have been more or less received as having been made in per fect good faith and perhaps with some foundation. But when charges are made such as have been made to-day, in the spirit in which they have been made, then I say that no self-respecting Board could do anything less than accept the challenge.

Mr. Thompson referred to certain rumours. His trouble apparently is that London gets information in ad vance of Australia. He referred to one case in February last. Undoubtedly on one occasion the London Press did get information in advance of what we in Australia did. That was entirely due to the staff in the London office of our Company. The man who controls and deals with the handing out of in formation for publication was absent on that occasion, and a communica tion from our general manager to London was handed out before it had been sent back to Australia for simultaneous release, which is the method we regularly follow. I do not know what the net result of that mat ter of London being in advance of Australia was, but if there has been harm done to anybody we take the blame for it willingly. We are sorry.

Our London office made a mistake.

Now concerning the rumours Mr.

Thompson referred to with regard to our officials. Everyone knows I am a good Australian. I would not be occu pying this position unless I had the interests of the Australian mining in dustry at heart. I was not a share holder of the Company. The London people put up a million pounds which made it possible for this Company to be incorporated.

Mr. Daly: And it did not carry out its contract!

Chairman: That I do not know. If there is any breach you can report that to the directors and it will be investigated. We do not like these allegations. We want absolute facts. I myself think that Mr. Thompson has unwittingly done the best servant that this Company could have had a very grave injustice. A lot of these stories you have heard to-day are absolute falsehoods. To say that that officer has not been up on Edie Creek often enough is incorrect. I myself have been there twice.

Mr. Daly: You have been there once with him and once with the engineer.

Chairman: You are wrong. Our official, in common with this Com pany, inherited quite a lot of ill-feeling because he went in there to represent a big concern. Originally Edie Creek and the fields surrounding it were in the hands of the small miners. Ulti mately it was decided that a portion of that could not be worked satisfac torily by the small miner, and a large company was formed for the purpose of working it. From that date this Company has been subjected to more or less blackmail throughout the whole of its existence, and its leading officials, being the men in charge of the interests of this Company, have had a most harassing time, not only

in getting satisfactory titles but in their treatment. Ultimately, through being treated in such a manner, the Company was forced, against its judg ment, to enter into tributes, which it had no wish to do.

When I first went there a notice was on the board, “No tributes.” That created a good deal of ill-feeling towards our manager personally. A number of men whom he has refused to encourage up there, and in addition a number of persons up there whom he has had to discharge, have been making reports against him which are absolutely false. I know many mining engineers, and I say advisedly that if there is a man in Australia who could have tackled the job in New Guinea better than Major Harrison, I do not know who he is.

That brings us to this question of the Livingstone Tribute, and that brings up a matter which this Com pany did not want to enter into but which it was forced to enter into for the protection of its interests. The statement of £40,000 having been re ceived by Mr. Livingstone is wrong, but he did make a good deal of money.

When that tribute was entered into with Mr. Livingstone, England had not gone off the gold standard, and the exchange between Australia and Eng land was not what it is to-day, nor had the aerial freight been reduced from sixpence per pound to fourpence per pound, which it is to-day. The tribute which was entered into with Mr. Livingstone on the conditions that existed then was a highly satisfactory tribute agreement as between the owner and the tributer. Mr. Living stone did well for himself. Good luck to him. So did we. If things had gone the other way, I tell you candidly that if you like to go to the field and get first hand information and ascer tain the conditions that were existent on the day that tribute was signed and compare them with what actually took place, Mr. Livingstone probably made £10,000 or £12,000 more out of it than was ever anticipated. As a man who has been associated with tributes be fore (not in gold-mining, but in other forms of mining) I say that it will be a bad day for any Company when it tries to go back on its tributers or when it shows that tributer ill-will. I say, with all the knowledge of the cir cumstances surrounding that tribute, that it was a workmanlike and busi ness like tribute, and that it was abso lutely forced on the Company at the time.

Mr. Daly: Was not he appointed to a position here when he came back from England ?

Chairman: Yes.

Mr. Daly: Who appointed him?

Chairman: The appointment of all our technical officers is made by the Technical Committee.

Mr. Daly: But who appointed Mr.

Livingstone to that position when he came back here?

Chairman: The Mining Trust, our consulting engineers.

Mr. Daly: What Mining Trust ?

Chairman: Evidently you do not even know the Mining Trust.

Mr. Daly: I know a good deal more than you think.

Chairman: I think there is quite a good deal of malice which should not be in existence. A lot of statements have been made here to-day which are entirely untrue and false. Mr, Living

stone was appointed by the Mining Trust, our consulting engineers. The Mining Trust was the Company which are really responsible for the million pounds which was put up for the work ing of this Company and the exploita tion of the New Guinea Goldfields. In other words, the Mining Trust control this Company. The Mining Trust, when they took control, asked me to become the chairman of the Board. 1 became the chairman at their request and not of my own volition. I was anxious to do something for this Com pany because of my association with certain members of the Mining Trust, and I was anxious also to do some thing for Mount Isa. It meant that I would have to devote the whole of my time to the affairs of this Com pany and the Mount Isa Company. I am not afraid of anything I have done.

If there is anybody who will come along and take on the job, I will give it to him gladly.

Mr. Daly demanded information about the rate of salary being paid to a high official.

Chairman: If you ask for that infor mation, I will ask you to see me at the office and — Mr. Daly: We are entitled to know what he is paid.

Chairman: I will not give you any information concerning the salaries paid to our staffs.

Mr. Daly; Why? This is the regis tered office of the Company, and we want to know.

Chairman: Subject to discussion with my directors, I am not going to give that information here. I think that is the class of information that should not be asked for ...

Chairman: It does not matter to me who it is in control, as long as New Guinea becomes what I hope it will become. 1 might say that apparently you are ill-acquainted with the tech nical mind. In 1929 when you became shareholders you became shareholders in a Company which had certain allu vial ground up there and which had a nominal capital of some four mil lion odd pounds. Mr. Daly, in referring to our expenditure up there, says that we have spent half the amount of money that it cost to build the Bridge.

Mr. Daly: It was near enough to that.

Chairman: Well, if that is so, I hope that the dividends which the Company will make this year will only approximate the extent of Mr. Daly’s error. As a matter of fact, if you re view our balance-sheet you will see that up to the present we have not spent more than £650,000.

Mr. Daly: What is the cost of sink ing per foot in any shaft you have sunk?

Chairman; It might be anything from £3 to £20, according to the nature of the shaft.

Mr. Daly: Is it anything from £1 to £3?

Chairman: No; anything from £3 to £20.

Mr. Daly: That is a pretty solid amount.

Chairman: Well, I can take you to places in Broken Hill where it has cost as much as— At this stage it was moved and seconded that Mr. Daly be no further heard. The voting on the voices not being clear, the chairman proposed a show of hands, but this was not taken.

Chairman; Mr. Daly has been very

malicious in his statements. Mr.

Thompson also has made statements which are quite untrue, but I do not blame him altogether for that. I think he has heard those stories, but I can assure you that those stories are abso lutely wrong. I think they have been formed with a view to market opera tions, something I do not indulge in. I will promise Mr. Daly this: I am not a crook and I have not stolen any money, nor do I think that any of the directors have. We do not want to steal any money. We merely want to make some. If our methods are not exactly as you would have them, it is within the province of the share holders to dismiss this Board and to put on it men with Mr. Daly’s experi ence. His statements are entirely

wrong, and I do not propose to tackle them seriously or answer them seriously. I do not mind, when a man seeks information and acquires it, if he comes along and tells you the facts, but he has made no such attempt to my knowledge. I do not know what the Stock Exchange operations are. I am not interested in them. It has taken me all my time to attend to the affairs of this Company. With regard to our general manager, I say advisedly that you cannot find a man in Australia who could do better than he has done in New Guinea. . . . Now that we have improved the position under Major Harrison’s guidance, we have put civilised camps out there.

The men instead of living on tinned food are able to have chilled beef sent from Australia. They can and do buy the food that we are able to have in Sydney. That has all been brought about by Major Harrison and his work men, aided, of course, by the money the Company has put at his disposal.

Major Harrison has had a hard and difficult time, and I say, with a full knowledge of all the conditions, that he has done excellent work.

Mr. Davis: Do you think it will ever be possible for this Company, with a capital of £5,000,000, to pay a dividend?

Chairman: It depends on what divi dend you expect.

Mr. Davis: Say a dividend of 10 per cent.

Chairman: The position is that a million pound Company has been asked to earn dividends on four and a half millions pounds of shares. I say this, that with the work that has been done our chances are that you will re ceive some dividends, although not in the immediate future. The position was that you took on New Guinea Gold fields at the start, a Company which had to find the lodes and develop. You took on a prospecting Company. You did not take on a Company with any

reefs which had been opened up. You want to face that position.

Mr. Davis: But do you think it is possible for a Company with a capital of £5,000,000 to pay dividends?

Chairman: I say this, that it may be easily possible to pay dividends on that £5,000,000.

Mr. Palmer: With regard to the state ments that have been made concerning the rumours going about the city, I might say that I investigated most of those rumours myself, and it is a pity that Mr. Daly and others did not do the same. I investigated the business of the £40,000 two or three years ago, and it was quite all right. I hope that you will not allow the salaries of your officers to be interfered with. It will be a very bad day for the Company when you do. Major Harrison had to deal with inaccessible roads. He had to go up the most mountainous district that ever was. And he had to civilise the district and train the natives, an almost impossible task. If all the de partments are completely successful, this Company will be one of the great corporations of the world. To ask whether it will pay a 10 per cent. divi dend simply shows that the man ask ing the question has not gone into the matter. Yet it will be as easy as winking.

Mr. Bannan: Will the chairman tell us how much money has been spent on construction of roads?

Chairman: We have spent on the construction of roads, as will be seen from the balance-sheet (which roads I might say the whole of the population are using to-day, although we built them for our own purposes) approxi mately £13,000. That is only on the road which leads from our head quarters up to the Golden Ridges Mill, and from the Golden Ridges Mill to Edie Creek. Our headquarters are stated at £3,500. Golden Ridges has been connected by road to Edie Creek, and the transmission line from our power-house to Golden Ridges had to be built. We have done nothing fur ther in connection with the construc tion of a road from the Coast. We are still persevering with the use of aero planes, which costs us approximately at the present time a shade under £40 a ton for transportation to the Coast.

Before we begin carrying our stuff from our headquarters to our mines up the mountains we have to spend £40 a ton. Any man who knows anything about mining will realise that a cost of £40 a ton for transportation will naturally make all your costs rather high.

Mr. White: Mr. Livingstone was an officer of the Company when he re ceived a tribute from it, was he not?

Chairman: No.

Mr. White: But he was an officer afterwards ?

Chairman: Yes. As a matter of fact, Mr. Livingstone was examined here in Sydney before he went to take that job. He waited for two months until his doctors assured him he was fit for the work. He went there and he worked very hard. He is a competent man, and above all he is a loyal man.

Mr. White: I want to mention this, that no officer of the Company is en titled to receive a tribute, is he?

Chairman: No.

Mr. White: And that has not been done?

Chairman: On one occasion. We

have not given tributes to our officers, but we had a very loyal officer named Hylton who had been our Lease Registrar. One of the most important things in those days on that field was the due protection of our titles. We were able in process of time, by hand work at Canberra and with the Admin istration, to get the security of title for which we aimed, and at that point Hylton’s job vanished. When Hylton was to leave the Company he was given the chance of this tribute be cause he was expected to leave the service in four or five weeks. He did not leave the Company; something went wrong with the negotiations, and he remained on for four or five weeks.

Meanwhile his brother went on the tribute. The tribute was given by Major Harrison, not so much as a re ward but as a job for an officer of the Company.