3
The contention of the Company practically amounts to a claim that the Royalty is only paid on the net profit (if any) appearing upon a Profit and Loss Account from which only the cost of getting and cutting is excluded. This, in our opinion, is directly at variance with the terms of the lease.
2. The Company should be required to pay the Royalties upon the basis above indicated.
3. Nothing further occurs to us,
Dec. 31, 1899.
Balance at this date
Dec. 31, 1900.
£
⚫. d.
£
8. d.
745 11 8
525 3 10.
***
1,500 ( 0
10 10 0
London Office expenses, including Sec-
retary's salary, rent, &c.
Directors' remuneration for three years Auditor's fee
...
Interest on unpaid purchase money
Royalty on phosphate sales, being 5 per cents on £38,343 78. 2d, as shown below. Depreciation-
Works and buildings
Machinery and plant
306 13 5
3
19
2,342 7
1,767 3 4
***
2,824 5 8 2,717 3 11
5,541 9
7
Preliminary expenses including stamps... Managing Director's remuneration, being
5 per cent, on £32,372 19s, 8d.
On the other hand they had added:-
Address Commission
Difference in exchange
£ 8. d.
•
912 1 9
...
45 4 6
and before calculating the Royalty, they had re-added
the Royalty, viz.
267 1 5 1,628 12 11
£65,757 9 7
as well as what they call the "cost of getting,” which
they estimated at 18. 8d. per ton on-
£ 8. d.
1,767 8 4
35,091 tone, 16 cwts., 2 qrs., 1 lb., being the number 2,631 17 3
of tons sold during the year.
£4,399 0 7
That Mr. Lucas was to request us to take the above matters into our consideration and advise you :-
1. What deductions was the Company entitled to make, under the terms of their
lease, for the purposes of estimating the Royalty payable ?
2. What answer should be made to the contention of the Company?
3. Generally.
We have taken the papers into our consideration, and, in obedience to your commands, have the honour to
Report-
1. That in our opinion, upon the true construction of the lease of the 17th February, 1891, the Lessees are bound to pay a Royalty calculated upon the actual selling price after deducting "freight, commission, insurance and other like expenses." These latter words cannot be construed so as to entitle the Lessees to make any of the deductions claimed (beyond those allowed in paragraph 6 of the letter of the Crown Agents for the Colonies of 22nd June, 1901), except that for carriage from the place where the timber and phosphate have been cut and got to the place of shipment, and for loading. With this addition we think that the deductions suggested in that letter represent the proper basis for calculating the Royalty, We assume that the "analysis fee" is a necessary part of the expense of sale.
i
The Right Honourable J. Chamberlain, M.P.
&c.
&c.
&c.
We have, &c.,
R. B. FINLAY. EDWARD CARSON.
1
PUBLIC RECORD OFFICE
Reference :-
C.O. 885
15 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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