The Paralysis Of Upper Morobe

From the point of view of the New Guinea Administration, and equally from Australia’s point of view, the posi tion on the New Guinea goldfield (Morobe) is not satisfactory.

At one end of the field, gold is being produced at an ever-increasing rate, and under such good conditions that most people concerned are liable to overlook the unsatisfactory state of affairs at the other end of the field. The subject calls for attention by the Governmental author ities; and it is in the interests of everyone that the thing be forced to an early issue.

Gold, at the present time, is exception ally valuable. Any country producing gold in large quantities to-day is placing itself definitely in a position of advan tage, in relation to the economic develop ments which are attending the breaking up of the depression. In a couple of years, gold may not be so valuable. There fore, it is of importance that, if there is rich gold in New Guinea, it should be brought into the world’s market at the earliest possible moment.

Morobe goldfield is roughly in two sec tions the upper section, held mostly by New Guinea Goldfields, Ltd., which is a reefing proposition; and the lower section,

held generally by the Bulolo (or Ameri can group), which is recovering gold by dredging. The story of the energy and enterprise which brought the Bulolo sec tion of the goldfield into rich production so quickly and efficiently has been told many times and needs no repetition here.

We are concerned at the moment as all friends of New Guinea are concerned with the comparative paralysis which has fallen upon the upper section of the field, controlled by New Guinea Goldfields, Ltd.

After the first flurry of discovery and pegging, from 1927 to 1929, New Guinea Goldfields, Ltd., was formed under the aegis of Mining Trust, Ltd., and it took over practically the whole of the leases between Edie Creek and the Bulolo block, issuing to the lessees the shares of the Company in payment for their interests.

Eventually, the total of its issued capital reached the colossal figure of £5,250,000, by far the greater portion of which is represented by shares issued for the pur chase of leases. The original plan may have been sound enough it apparently was proposed that the interests at the back of the Mining Trust, known vari ously as “Urquhart” and Russo-Asiatic Company, should find whatever cash was necessary to develop this goldfield on a

large scale. But the depression, and events attending the depression, very seri ously cramped the activity of Russo- Asiatic, with the result that from 1930 onwards New Guinea Goldfields, Ltd., has not engaged in large scale developmental operations on Morobe but, on the con trary, has merely scratched around this enormously valuable territory. It has engaged in a certain amount of sluicing; it has permitted various tributers to take out large quantities of gold on the usual basis; and it has erected one or two toy mills.

The position of N.G. Goldfields, Ltd., is perfectly plain, of course. The shares of this five and a quarter millions Company are valued by a somewhat hesitant Stock Exchange to-day at around 7/-, and they have been down to half that. To carry out worth-while developmental operations, and bring out gold from these rich leases sufficient to pay an attractive dividend on £5,250,000, will involve an additional capi tal expenditure running into hundreds of thousands of pounds. Where is such additional capital to come from? If there is to be another issue of ordinary capital, it is most unlikely that the new share holders will permit the new issue to merge with the old issues of shares, now valued at 7/-. The present shareholders, on the other hand, seem opposed to a recon struction and are most unwilling to permit new preference issues. And so the stale

mate goes on, with a growing suspicion that there is, somewhere or other, a policy of freezing out the little shareholders in order to prepare the way for reconstruction and a new issue of capital.

But the general and casual observer, who is anxious for the progress and prosperity of the Territory, is not concerned with the internal troubles and dissensions of New Guinea Goldfields, Ltd. All he is anxious for is that this industry shall be developed quickly, before the present high and favourable value of gold shall shrink.

The rights of private property must be respected, of course; but that is not to say that the Mining Trust, Ltd., shall have the right to squat indefinitely upon a slice of country that ought now to be returning great wealth and benefits to New Guinea and to Australia.

New Guinea Goldfields, Ltd., has been apparently muddling about for the better part of four years with this presumably rich proposition, keeping out other interests which might have done something, and apparently unable itself to finance the large-scale operations that are necessary.

It appears to be trying to finance developmental activities either wholly or in part from gold won on the field — clearly, a feeble and futile plan. Meanwhile, its shareholders are without dividends and the New Guinea Administration without the revenues it has a right to expect.

Unless something is done to end this stalemate, New Guinea Goldfields will miss its chance. By the time it reaches production on a scale commensurate with its capital, gold will have fallen in price and production will not be worth while, considering the cost of transport.

That brings into further consideration the question of a road from the coast into

the goldfield. Three years ago the proposal to build a road was a very live question. But while various interests concerned were arguing, the Bulolo group solved the problem by establishing their very efficient and dependable air transport services. They have already carried in by aeroplane all their heavy equipment; and unless there are big and hitherto unforeseen developments (such as the discovery of new values at deep levels) they can now complete all their future operations with aerial transport alone.

But what of New Guinea Goldfields?

This is a reefing and not a dredging area, and if there is to be worth-while production, much heavy equipment has yet to be carried in on to this section of the field. Is this to be done by means of aeroplanes or by means of a road? The present high price of gold will permit the use of either means of transport. But if there is to be much more delay and the price of gold should fall, it is clear that many of the N.G.G. leases, which now could bear a heavy impost on account of transport, may become quite unprofitable to work. And this, from the N.G. Administration viewpoint, would be a calamity- Surely it is time that some action was taken, on behalf of both the N.G. Administration and the Company’s own share holders, to put an end to the present position. Above all, some attempt should be made to ascertain whether the present position is due merely to directorial feeble ness and incapacity; or to events arising out of the unforeseen depression; or whether it is due to a deep-seated plan for creating conditions favourable to a reconstruction, in which the interests of the weaker shareholders may suffer.