Ngg Awaits End Of The War

Long Hard Fight Probable Before Any War Insurance is Paid

NEW Guinea Goldfields, Ltd., in Sydney on March 4, held its first annual general meeting since the outbreak of the Japanese war. The Company operated for only three months and three weeks before the gold industry shut down about January 22, 1942, and Europeans were compulsorily evacuated.

The Company hopes to resume opera tions after the war: but if the mines have deteriorated owing to lack of care, only the alluvials may be worked. The Company made a profit of £12,057 in the three months; and this, added to reserves, etc., made available about £137,000, in cash and liquid assets, for resumption of operations.

The Company has an issued capital now of £950,370, in shares nominally worth 4/3.

The manner in which this New Guinea concern has been dealt with by the War Damage Commission was described by the chairman, Mr. J. Kruttschnitt. in his address to shareholders. The following extracts:— “The fact that whilst hostilities con tinue, we are prevented from trying to maintain the mines makes it almost impossible to forecast the outlook at Golden Ridges. The mine was in good condition when we were closed down, but much depends on whether the elements and ground subsidence will so damage the workings that the re-opening of the mine may prove uneconomical. As far as the alluvials are concerned, it is safe to say that water races and plant can be rehabilitated and resumption of pro fitable operations is reasonably assured.

“Assets to the value of approximately £300,000 have been lost as a result of enemy action and/or scorched earth policy. Partial claims are being filed with the War Damage Commission in cases where proof is reasonably conclu sive that the loss sustained comes within the definition of war damage. The filing of these claims has involved the furnish ing of more detailed evidence than one would expect in connection with insur ance of this type.

“Our correspondence with the Com mission suggests that it may prove most difficult to furnish the kind of evidence it requires to establish proof of loss.

Unless newspaper reports and aerial photographs are to be completely disre garded, we may reasonably assume that Salamaua was first bombed, practically out of existence, and thereafter occupied by the enemy. We are also informed that the locality' has been bombed con tinuously by the United Nations air force since the Japanese occupation.

“But. in the face of this common knowledge, the War Damage Commission has asked the Company to furnish, among other things, statutory declara tions by independent witnesses that our buildings and stores at Salamaua were wholly destroyed, that the site was examined and nothing remained to be salvaged. If this attitude be maintained it will prove next to impossible in many cases to produce documentary evidence establishing the agent and manner of destruction. We recognise it is the duty of the War Damage Commission to admit claims only for war damage as defined in the Regulations, but a too rigid procedure for establishing claims may result in injustice.

“Compare the Commission’s attitude

with that adopted by a commercial insurance company. In April last one of our houses at Wau, together with con tents, was destroyed by fire, the origin of which was unknown. On our furnishing a declaration that the property was acci dentally burnt, and was not destroyed by enemy action, the insurance company promptly paid our claim.

“Let us also consider the need for liberalising the definition of war damage as contained in the Regulations. This, of course, can be done only by the Federal Government. It will be recalled that the civilian population was by military orders completely evacuated from Wau, Golden Ridges, and Edie Creek, areas which were subsequently declared military areas, pro hibited to all persons except those in the armed forces. Thus there was no opportunity granted us to maintain el even watch over our plant and build ings, and we consider the Regulations should be amended to permit the result ing depreciation to be included as war damage.”

Future Value Of Gold

The chairman was asked whether the directors had formed any opinion about the future of gold—would it hold its value after the war?

He said he thought it would. There had to be, in the world, a standard of value —something into which all property and service could be ultimately reserved.

Gold fulfilled that function. It had always done so and it would so continue.

Some countries had tried to carry on without gold, which might seem possible in theory; but, in practice, they always came back to gold. No one could fore tell the future gold value per ounce; but he did not expect any serious deprecia tion.