CO882-(2-3) — Page 92

PUBLIC RECORD OFFICE

Reference :-

ITTIC.O.{

-882

56

In the first place they appointed Mr. Lumsden to be their manager, and he was accordingly dispatched to Labuan in 1868, and be continued manager until he was dismissed in 1871, at which time he was succeeded by the present manager, Mr. Gray.

It is important to see what Mr. Hennesy stated in praise of Mr. Lumsden, for it is this that the Directors look to as their excuse for having kept Mr. Lumsden so long at Labuan.

As noted in the Company's communication to Lord Kimberley of date 27th July last,* Mr. Hennessy being Governor of the Colony of Labuan on the 10th January, 1869, wrote a letter to Sir James D. Elphinstone, Bart., in which inter alia he stated as follows:-"Though you mention to me in your last letter that you are no longer con- nected with the coal enterprise here, yet I know you continue to feel a hearty interest that in the prosperity of Labuan, and therefore I have great pleasure in telling you Mr. Lumsden's success is beyond all doubt. He is exactly the man for the place. Last month I sent a Report on the working of the colliery, which shows that the present manager is making a large profit for his employers every month. The coal hewing is never stopped for an hour now. The mining operations proceed like clockwork, and every one here sees that the manager has nothing to do but make plenty of money from this out."

From that time until the present Mr. Hennessy has been loud in his praise of Mr. Lumsden, and curiously enough the letter which Mr. Hennessy refers to in his com munication to Lord Kimberley, of date 5th October last, as having been written to Mr. Miller of Manderston, late M.P. for Leith, was written at the very time the Directors were obliged to recall Mr. Lumsden preparatory to his dismissal. Even in the last com- munication to Lord Kimberley, of date 5th October last, Mr. Hennessy strives hard to induce his Lordship to believe that Mr. Lumsden was quite a model manager.

But see what money he spent at Labuan. The expenditure during and for Mr. Lumsden's managership from 1888 to 1871 was as follows:-

Wages at Labuan

Stores

Charges

19

++

Loss on Exchange

Royalty

Interest

£

25,493

7,174

2,535

392

258

23

35,875

57

best to forward their manager's exertions at Labuan, they charged no fees for their services as Directors, nothing of this kind having ever been paid by the Company.

Nevertheless the charges stated against the Directors by Mr. Hennessy are of the most serious character that could be laid to the charge of any board of Directors. For these Mr. Hennessy must be called to account unless an apology be made.

Meantime, in the interests of the Colony and mines of Labuan, it may be proper to touch on a few of the matters referred to by Hennessy as criminating the Directors.

First. He states that the Directors saddled the mines with heavy expenses connected with their steamers the "Vine" and "William Miller." Why, these steamers belonged to the same shareholders as the coal mines did. There were two separate Companies, There was not the smallest but the shareholders in each were precisely the same. difference in any respect, nor in the pecuniary interest of any single shareholder. The steamers were sent to carry the coals from Labuan to the markets of Singapore and elsewhere, and the steamers were retained in that service until sent away by Mr. Lumsden himself to engage in general trade on account of his output of coals not being sufficient to keep them in work. The profits of the general trade were, however, kept in the hands of the Coal Company's agents at Singapore, Messrs. Hamilton, Gray, &c., who were also agents for the steamers, on whom Mr. Lumsden was in the habit of drawing bills to supply his wants at the coal mines. By authority of the shareholders the steamers them- selves were mortgaged to raise money to meet Mr. Lumsden's demands from Labuan. At last the steamers were sold. The Coal Company thus became indebted to the Ship Company to the extent of 15,0001., and to meet this debt the shareholders of the Coal Company created new Ordinary Stock, which they registered in name of themselves, and this was all they, as shareholders of the ship property, got for their debt against themselves as shareholders of the mines' property.

Mr. Hennessy's charge of mal-administration and corruption, and his assertion that there was a conflicting interest betwixt the partners of the ship property, and the partners of the mines property, are utterly groundless.

Then as to the two road engines and sixteen coal waggons which were sent to convey the coals from the mines to the Victoria Wharf, their cost, and also the cost of the two

coal cutters which were sent to save labour in the mines, were as follows :-

Road engines Waggone..

Patent cual cutters..

£ $. d.

1,650 14 8

820 0 0

500 0 0

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

2 PUBLIC RECORD OFFICE, LONDON

::

The charges at Leith during the same period were as follows:-

Sending out miners

£

605

Sundries

730

1,335

37,210

From the above, the sums realized for coals fall to be deducted,

viz.:-

For coals

For lighterage..

10,974 188

11,162

26,048

The other items of expenditure of the 40,000l. of capital are as follows:-

£

First cost of the mines and plant at Labuan .

7,500

Engine, road engines and waggons, and coal getters sent to Labuan Lighters purchased at Singapore..

3,744

231

440

Gangarra Bridge

184

874

223

695

13,611

39,659

Expended on road to Governor's house

wharf (Lumsden's time)

erecting sheds

Unaccounted for by Mr. Lumaden

+

Total

The Directors of the Company are men of character and business habits, all gentlemen taking a high place in public estimation, and while they have endeavoured to do their

No. 14.

+ No. 35.

Total

2,970 14 8

Mr. Hennessy's accusations in regard to these articles are groundless. The road engine patentee, R. W. Thomson, Esq., was certainly connected with the Company, but what of that? He was the only party who could supply them, and they were purchased at the lowest price,-the price having been raised shortly after to the general public. As regards the waggons into which Mr. Hennessy states he pushed his cedar-wood pencil, they were made by a first-class firm in Leeds, in no way connected with the Company, and were of the best English manufacture, but at Labuan they were left uncovered and exposed to the weather. Mr. Hennessy does not condescend on the date he pushed his On so serious a matter as this Mr. Hennessy should have stated pencil into the wood. whether the waggons were rotten when landed, or only after they were left uncared for at Labuan. The Directors are prepared to show that they were landed in good order. Mr. Hennessy's statement, therefore, must refer to a subsequent date. In that case this is really a charge, not against the Directors, but against their manager at Labuan, Mr. Lumsden. As to the coal getters, they were purchased from the Patentee in London, who was in no way connected with the Company.

Mr. Hennessy asks Lord Kimberley to call for production of the detailed accounts at the Leith Office. This is a most extraordinary proposal, but without offering an opinion upon the propriety of any such proposal the Directors have to state that they will be glad to afford every information in their power to Lord Kimberley, or even to Mr. Hennessy himself, or to any respectable person duly appointed for that purpose.

Exaggeration, unintentional of course, appears to be another feature in Mr Hen- nessy's declamatory statements, for example it is stated that the Company paid 25 and 30 and even 40 per cent. for money borrowed in Labuan. The fact is simply this, Mr. Gray on his arrival in Labuan found everything in great disorder, and he had to pay arrears left by Mr. Lumsden of 5651. 19s. 1d. for furnishings to the mines, and 6991. Ov. ¡d. for wages to the miners, the latter having been the subject of the court proceedings referred to by Mr. Hennessy. In this state of matters the following interest was paid:

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