In dealing with the matters referred to this Committee by the Order of the Dáil, dated 25th June, 1935, the best arrangement of the matter seems to be to set out events referred to in the Terms of Reference in the order of their occurrence, stating all facts and circumstances connected with and surrounding them, and introducing in their relevant place the broad controversial questions arising at each stage. It should be noted, with regard to the phrase in the Terms of Reference—“the following allegations made by Deputy P. McGilligan,” that the Deputy has raised objections in the Committee to these allegations as not being those made by him. He has made distinctions as regards the meaning in some of them and has formulated his own charges. These submissions of his will be best examined in their own proper surroundings. The Committee received facilities from the Department of Industry and Commerce and the Department of Finance to inspect all documents and files, relevant to the subject matter referred for investigation to the Committee, and privilege in respect to publication, or discussion in public, of documents was claimed only where, in the opinion of the Department concerned, publicity would have been contrary to the public interest. At the outset it is desirable to indicate so far as is considered necessary at this stage the general legal position relating to the grant of mining leases.
The Law Relating to Mining Leases.
Article 11 of the Constitution of Saorstát Eireann provides that all the … minerals, within the territory of the Irish Free State hitherto vested in the State … shall from and after the date of the coming into operation of this Constitution belong to the Irish Free State, subject to any trusts…then existing in respect thereof … and shall be controlled and administered by the Oireachtas, in accordance with such regulations and provisions as shall be from time to time approved by legislation, but the same shall not … be alienated, but may in the public interest be … granted by way of lease or licence to be worked or enjoyed under the authority and subject to the control of the Oireachtas: Provided that no such lease or licence may be made for a term exceeding ninety-nine years,… and no such lease or licence may be renewable by the terms thereof.
The Constitution was enacted in 1922 and the first legislation dealing with mines and minerals was passed in 1931. The Mines and Minerals Act, 1931, empowers the Minister for Industry and Commerce, inter alia, to grant leases of State mining rights for a term not exceeding 99 years. A demise may be made by way of a take note or prospecting lease for a term not exceeding two years and the lease may contain an option to the lessee to take a reversionary lease for such term as will together with the term created by such take note or prospecting lease not exceed 99 years.
Paragraph (c) of the Terms of Reference.
Qs. 1629-1630. 1637.
In a strict order of sequence, the first matter that calls for attention is the allegation at (c) in the Terms of Reference, viz., that the lease to Senator Comyn and Deputy Briscoe was “made at a time that the Minister was aware that another party or other parties were proposing to seek a demise of the same rights, on terms more advantageous to the State.” Deputy McGilligan raised an objection to this term of reference. He states in evidence that he never made this statement and could not have known anything which would enable him to make it. He says again that “the nearest I came to this charge was that soon (after the lease being granted) it emerged that more advantageous terms could be got from other people.” He states that his allusion here is to Mr. Heiser’s group, who were in the field, seeking a demise of these lands, before Deputy Briscoe and Senator Comyn got their lease, and who appeared again shortly afterwards as the proposed sub-lessees of these two gentlemen, offering them terms more advantageous than those which the State had got. He says that he never was in a position to say that Mr. Heiser was an applicant concurrently with Deputy Briscoe and Senator Comyn. Whether or not it is accurate to attribute this charge to Deputy McGilligan, the matter has been referred to this Committee for examination as to the facts.
The fact that applicants, at various times prior to the passing of the Mines and Minerals Act, 1931, had approached the Department of Industry and Commerce is shown both by the files furnished to this Committee by that Department and by the evidence of the officials. In the period immediately following the passing of that Act it was the policy of the Department to notify all such former applicants of the change in the law and warn them that they should take steps to revive their applications, if they thought fit to do so. By applying this policy in the present case it was the belief, expressed to this Committee by Mr. W. Maguire, a Principal Clerk in that Department, that all former claimants to lands included in the terms of the lease under investigation had been effectively dismissed. There are some points in connection with these various cases that can be best appreciated by examing them individually.
Application of Messrs. Hume and McDonagh.
Qs. 895-6; 902.
The first case is that mentioned in the evidence in connection with the names of Mr. Hume and Mr. McDonagh. These gentlemen appear to have had, prior to the setting up of the Saorstát, a lease of lands including the townlands now in question, for which, it was stated, they paid a rent of £60 to the Crown. The information given to this Committee is to the effect that the lease was a “take note” lasting one year and that it was renewable. It seems to have originated in 1921, or perhaps earlier, and to have been renewed from year to year. It would appear that, under its authority, substantial prospecting took place and a good deal of capital was put into the task. About the year 1924 the parties to this lease were informed that in the absence of legislation there was no power to give them a further renewal. In that year they communicated with the Quit Rent Office requesting renewal of their lease in the event of new legislation being passed as contemplated. With regard to the general notification, following the passage of the Mines and Minerals Act, 1931, to former applicants for leases, the Departmental records fail to show that any letter issued to the persons associated with this interest. About the month of June, 1935, the successor to the lessees visited the Department and confirmed that he had no notification from them that he should take steps to keep alive any interest he might claim in the lease. The point of view of the Department expressed to the Committee was that, as nothing was heard during ten years from the parties interested in this case, it was a natural assumption that they were not pursuing the matter. At the same time it is admitted that it would have been “courteous and decent” to have communicated with them as soon as possible, and that inadvertently effect was not given to the intention to do so. The information available to this Committee does not enable the Committee to say that active interest in this lease was ended, but it is noteworthy that no application for its renewal was made between the passage of the Mines and Minerals Act, 1931, and the granting of the lease to Senator Comyn and Deputy Briscoe on the 1st November, 1934.
Mr. Heiser’s Application.
The next applicant was Mr. Maurice E. Heiser, representing the Risberget Iron Ore Syndicate, of 39a Maddox Street, London. As this gentleman was frequently referred to in the course of this inquiry, it should be stated that he is an Australian by birth, and that he enjoys the reputation of being a competent mining engineer. His first connection with mining work in County Wicklow is stated to have been an engagement by the owners of an estate there to prospect for minerals. Whilst thus engaged he apparently gave consideration to the possibility of gold mining in the Saorstát, and he consulted the records in the Geological Survey Office. His first application to the Government of Saorstát Eireann was on May 15th, 1930, for permission to prospect in the valleys of the Avoca and Aughrim Rivers. Owing to the fact that the legislation had not been passed no progress could be made. The files lodged with the Committee show a constant correspondence on the subject of his application, asking for expedition, and giving details as to equipment, proposed capital, financial associates, areas desired, etc. This correspondence continued during 1930, but towards the end of that year Mr. Heiser is stated to have gone to America to attend to other interests. Throughout the year 1931, in which the Mines and Minerals Act was passed, his Dublin associates, and particularly Mr. F. M. Summerfield, maintained pressure on the Department of Industry and Commerce to grant the lease. They even continued this into the year 1932. The Department, in pursuance of its policy in that respect, informed Mr. Heiser’s London solicitors on the 4th May, 1932, that they were then ready to receive an application from Mr. Heiser (or the Risberget Co.) under the Mines and Minerals Act, 1931. The reply received was that Mr. Heiser was in America, that they had no instructions to proceed and that they could only assume that the proposal had lapsed. A short time afterwards, however, on 25th May, 1932, they wrote again saying that they had got in touch with Mr. Heiser in America and that he had certain papers with him essential to answering questions arising out of his application, but giving the names of the technical and scientific staff at the disposal of the Risberget Co. and dealing with the question of supplying maps. The full discharge of other queries was anticipated at an early date. The letter went on to say that the object of Mr. Heiser’s visit to the United States was to raise funds to finance this enterprise in County Wicklow, but they assumed that, on account of the depression in that country, he had failed to collect the necessary money.
The Department eventually wrote to Mr. Heiser’s solicitors on the 2nd March, 1933, stating that in the circumstances they regarded the proposal to take out a lease to have lapsed. At the same time a copy of this letter was sent to Mr. Summerfield, whose constant pressure on the Department has been mentioned. Indeed the question whether this application of Mr. Heiser should be regarded as being still in existence seems to be settled by a reply of Mr. Summerfield himself, given in this Committee to a question relating to the lease granted to Deputy Briscoe and Senator Comyn:— “So far as I know it was the only application in at that time.”
Mr. Maconchy’s Application.
The next application was lodged in the period 1924-25, in the name of Mr. J. K. Maconchy. He stated that he had at that time sufficient capital and the nucleus of a Company. The scheme of development, which he had in mind, was elaborate and would require substantial resources, financial and technical to achieve. A lease could not be given to him then, but after the passage of the Act he was requested to renew his application. In reply he stated that he was not ready to reform his Company and requested an extension of six months to see if improved conditions would permit of this being done. On the 20th March, 1933, Mr. Maconchy was notified by the Department that his application was deemed to have dropped. He was also informed that any further application from him in the future would be fully considered.
Application of Senator Comyn, Deputy Briscoe and Mr. Norman.
The next application to be received by the Department was in the names of Senator M. Comyn, Deputy R. Briscoe and Mr. G.H.C. Norman. As this application was withdrawn and a fresh application in the names of Senator M. Comyn and Deputy R. Briscoe only was submitted, the latter being the application in response to which the lease referred to in the Terms of Reference was granted, it is not necessary to consider the former application for the purposes of this part of the inquiry.
The evidence of the officials of the Department of Industry and Commerce on paragraph (c) of the Terms of Reference, following up the information disclosed on the files in reference to the above applications, is, therefore, that, subject to a slight reservation in connection with the Hume-McDonagh case, at the time the demise was made to Senator Comyn and Deputy Briscoe there was no other party or parties proposing to seek a demise of the same rights.
The finding of the Committee on paragraph (c) appears at the end of this Report.
Position of Mr. G. H. C. Norman.
The application, referred to above as withdrawn, which stood in the names of Senator M. Comyn and Deputy R. Briscoe and Mr. G. H. C. Norman is important for the purposes of this inquiry, as a whole, because of Mr. G. H. C. Norman’s place in the chain of circumstances leading up to the grant of the demise. The application was one for a take note or prospecting lease over nine townlands in County Wicklow. The term of the proposed lease was two years, and the consideration was the payment of £5 per annum dead rent plus a royalty of 2½ per cent. The minerals mentioned in the application included gold and silver amongst others. It was stated that it was proposed to expend up to a maximum of £200 on this prospecting even if no results were obtained. Mr. G. H. C. Norman was named as the “competent scientific staff” at the disposal of the applicants. The date of this application was the 23rd March, 1933.
Deputy McGilligan has made a principal part of his charge against Senator Comyn and Deputy Briscoe that they meted out “shameful and sordid” treatment to their fellow applicant, and that this amounted to the exploitation of a young Irish national.
Qs. 4755; 4791.
The earliest appearance of Mr. G. H. C. Norman in the story is in conjunction with his father, Mr. H. F. Norman, who was engaged in mining operations in Glendalough in connection with lead, sulphur and zinc. He was at that time under the age of 21 years. In rebutting a charge that he had no greater qualifications than the possession of a mere vocabulary of mining terms; he pointed out to the Committee that he had spent some years in an engineering factory in England where mining machinery was made. He there worked in the laboratory and in the practical departments of the establishment. In the year 1930 he returned home, and began to work on the Glendalough schemes. Owing to a fall in the price of lead this work tended to become uneconomic in the early part of the year 1932. Mr. Norman, Senior, conceived the idea of getting a Government grant to enable him to tide over the period of depression consequent on this state of the price market. He approached Deputy Briscoe for guidance in this matter. An application for help was made in due course, but in December, 1932, this was definitely refused by the Department. Mr. G. H. C. Norman states that in the following March, 1933, he visited Deputy Briscoe at Leinster House and informed the latter that it was proposed to abandon the work at Glendalough. A new .phase of their association developed from this point. There are, however, conflicting versions of the motive behind this further association. Deputy Briscoe states that the elder Norman asked him to find work for his son, suggesting that something like what he was doing in Glendalough would be acceptable. In reply to this Deputy Briscoe said he would speak to a friend who might be prepared to put up some money and, if so, the young man might help him (Deputy Briscoe) in his prospecting. In other words, the Deputy’s motives were charitable. As against this, Mr. G. H. C. Norman denies and resents any such suggestion. He says that, on the occasion of his visit to Leinster House, Deputy Briscoe questioned him as to whether he could find gold in County Wicklow. Mr. Norman undertook to do this. Thereupon Mr. Norman was introduced to Senator Comyn. Deputy Briscoe asked the Senator whether he would join in a “speculation.” The Senator agreed to put £50 into the speculation of gold-mining in Wicklow. It was agreed that the Deputy would put up a similar amount and that Mr. Norman would begin the actual search for the gold. He was to be paid his hotel expenses (£1 10s. 0d. per week) at Woodenbridge, plus 15/- a week towards other expenses. It was agreed that all three were partners in equal shares. In connection with this payment to him of £2 5s. 0d. a week, Mr. Norman was at great pains to explain that it did not denote “employment” of him by the Deputy and Senator, but was a payment of the expenses of a working partner. Mr. Norman, furthermore, claims that the precise location of the search was his work and that his fellow partners did not possess sufficient knowledge to enable them to nominate the townlands which should be prospected and of which leases should be sought from the Department. Mr. Norman thereupon began to prospect and continued working till June, 1933. The work during this period was not authorised by the Department. Deputy Briscoe, however, notified them that the work was proceeding. It was, in reality, illegal. During the period from March to June there was considerable panning and some shafts were sunk. This work was done by Mr. Norman, and his parents, visiting the ground at the time, were so alarmed at the conditions under which he was working, that they wrote to Deputy Briscoe protesting and complaining that the young man was not adequately insured against accidents. Mr. Norman, Junior, does not appear to have complained of these conditions, and, indeed, they may be inseparable from such work if elaborate machinery is not installed.
During these early months Deputy Briscoe endeavoured to interest some French parties in these operations. They advanced to him a small sum of 2,000 francs, and were apparently endeavouring to raise more in France. Senator Comyn, however, took exception to their method of doing this. He complained of the use being made by them of his name and position. He insisted on the return of the money advanced by them. Thus ended the first effort to secure development of the alluvial deposits in this area. The next effort made was by the partners themselves. They decided to examine the subsoil and made a contract with the Irish Boring Company to that effect. The results when obtained were not satisfactory. The Boring Company encountered bedrock and did not proceed any further. Thus only 35 feet of soil were examined. Deputy Briscoe and Senator Comyn informed the Boring Company that they considered that the contract had not been carried out, and demurred at paying their account. Eventually, after the receipt of a demand from the solicitors of the Company the account (amounting to £13 odd) was paid. In view of the use made by Deputy McGilligan of this dispute about payment, it would appear that the unwillingness of the Deputy and the Senator to settle with the Company was due to their conviction that the latter had not fulfilled their contract.
With the disappearnce of the Frenchmen and the failure to derive any useful results from the boring, with the first series of pannings on the site completed by Mr. Norman and with the shafts waterlogged, the whole project is stated to have stagnated. Mr. Norman returned to his father’s business in Dublin. He resumed the work of prospecting in November, 1933. In the interval he paid some visits to the spot in connection with complaints from farmers regarding holes and shafts left on their holdings. In November, having written to Deputy Briscoe for information as to proposed lines of development, it was suggested that he should design a cradle and use this in the work. A new arrangement was made that his remuneration was to come out of gold found by him. Mr. Norman was confident that with this new apparatus he would be able to pay his own way. About this time, too, an important step was taken in committing to writing the terms of the partnership. This document is only a rough draft in Senator Comyn’s handwriting, unsigned and uncompleted, and consequently must not be regarded as a binding document. Its importance lies in the light it sheds on the relationship of these three parties. In particular it valuates the shares of the partners at £250 each. In the examination of Deputy Briscoe and Senator Comyn it was sought to establish that this figure had no significance and merely indicated that the shares of all three were equal. Mr. Norman seemed, however, to take it at its face value. Before the introduction of the cradle a period occurred in which remuneration at the rate of £2 10s. 0d. per week was agreed on. It is to this period that Deputy McGilligan’s charge relates, viz: that “they [Mr. Norman and his fellow-workman] got this money for one week. They did not get it the second week, and they spent the third week writing for the second week’s money. On the fourth week they got £2 10s. 0d. for the second week. That was the last payment of £2 10s. 0d. they got. The payments became less week by week and eventually they ceased.”
On proceeding to work the cradle some nuggets were found in the beginning, but then another period of despondency set in. Mr. Norman states that the Senator insisted on his working in locations where there was no gold. He became dissatisfied with his position and wished to sell his share, so that he might get to work in places from which he hoped for better results. Deputy Briscoe states that about this period he wrote to Mr. Norman that he was not satisfied with the method of the work and proposed to drop it. He states that Mr. Norman then asked for £130 for further equipment, and after that for £40 for a truck to cart gravel. Deputy Briscoe was not inclined to grant either of these requests. Mr. Norman then offered to sell a quarter of his share, and he states that his partners informed him by letter they were going to drop the project, and asked him what nominal sum he would take for his interest. This letter was not produced to the Committee. His reply was that in that case he would sell out his entire share for £40. Deputy Briscoe offered him £25 and this was agreed upon, but as payment was not forthcoming Mr. Norman took the matter to a solicitor. The sum was eventually paid under threat of proceedings. Mr. Norman’s main complaint against Deputy Briscoe and Senator Comyn is that, contrary to their alleged representation to him, they did not drop the affair. He is, however, unable to produce the letter, in Which, according to him, this undertaking appears. The issue, therefore, remains inconclusive.
Application of Senator Comyn, Deputy Briscoe and Mr. Norman withdrawn.
Qs. 37, etc.
The application of Senator Comyn, Deputy Briscoe and Mr. Norman for a two years’ lease of nine townlands, already referred to, was dated 23rd March, 1933. Having made some inquiries in the Land Commission and the Quit Rent Office, the Department of Industry and Commerce, on the 16th May of the same year, wrote to the Deputy stating that the Minister was prepared to give a prospecting lease over the three townlands of Ballintemple, Clonwilliam and Coolgarrow, providing for a royalty of 4 per cent. and a dead rent of £5 per annum, and asking whether they were willing to accept this. It was further stated that this grant would include the right of a lease for 97 years, subject to specified rent and royalties, on satisfying the Minister that the lessees were possessed of the necessary financial and technical resources. This offer of the Department was accepted on the 18th May. In pursuance of these letters a fresh form of application was completed. This was lodged on the 17th June, 1933. After some correspondence between various Departments on matters arising, the Department of Industry and Commerce instructed the Chief State Solicitor on the 22nd November, 1933, to prepart a draft lease on the basis set out in the application and in correspondence with the applicants. The costs were to be discharged by the lessees on, and the dead rent was to begin as from, the late of the lease. On the 29th March, 1934, the draft lease was returned to the Department of Industry and Commerce. It was about this period that Mr. Norman proposed to execute a release of his interest.
Application of Senator Comyn and Deputy Briscoe.
A release of Mr. Norman’s interest was executed and accordingly the original application was withdrawn and a fresh application in the names of Senator Comyn and Deputy Briscoe alone was submitted. The new application, which was dated the 19th June, 1934, shows some important variations from the preceding applications. Thus, the statement of scientific staff available for the work is given as:—“Making arrangements for services and advice of geologists, and mining experts’ names will be furnished.” Again the financial resources of the applicants available for prospecting and developing work are stated simply as “£200.” The application was granted and the draft lease was presented to the applicants for signature. Senator Comyn signed readily but Deputy Briscoe was reluctant to complete the document. This attitude of his and the reasons for it will be examined later. Eventually he yielded, and the lease was sealed on behalf of the Ministers for Industry and Commerce and for Finance and came into operation, bearing the date 1st November, 1934.
Résumé of the Terms of the Lease.
The lease which covers part of the lands of Ballintemple, Coolgarrow and Clonwilliam, containly roughly 982 acres in the County of Wicklow, is for a period of two years at the yearly dead rent of £5, payable in advance, the first payment to be made on the execution of the lease, together with a royalty of one-twenty-fifth.
The covenants are briefly (1) to pay the rent and royalties, (2) not to commit unnecessary damage on the lands, (3) to constantly keep and employ on the lands at least four able-bodied and experienced miners and to supply them with all proper tools and appliances, (4) to make merchantable without delay all minerals found and to ascertain their quantity and value, (5) to make monthly returns of all minerals got during the month, (6) to give notice of intention to remove any materials, (7) to keep account of all minerals sold, the prices obtained, etc., and to permit inspection by the lessor (the Minister for Industry and Commerce), (8) to make a six-monthly return of production and prices, a statutory declaration to accompany same, (9) not to assign or part with possession by way of licence or otherwise without the consent of the lessor in writing first had and obtained.
Then follow provisions in the event of defaults in payment of rent or royalties or performance of the covenants or in making search and trial for the substance demised or ceasing to make same; for the most part these consist of powers to void the lease.
Lastly, if minerals are discovered “the lessor will if required by the lessees at any time prior to the determination of this demise and on being satisfied that the lessees possess the financial and technical resources necessary for the free development of the undertaking” grant a lease for the term of 97 years providing for a yearly dead rent of £10 and a royalty of one twenty-fifth and for the employment of eight able-bodied miners, the lease to contain covenants “similar to the covenants contained in this lease” and such other covenants as the lessor finds necessary; the lease so given to be determinable by the lessees on giving six months’ notice in writing or at the end of any seven years of said demise.
Paragraph (a) of the Terms of Reference.
Having thus detailed the main events leading up to the issue of the lease, the Committee are in a position to investigate the allegation made by Deputy McGilligan contained in paragraph (a) of the Terms of Reference, namely, that the demise was “made to Senator Comyn and Deputy Briscoe because they were political associates of the Minister”. Deputy McGilligan denies that the allegation is his. His attitude towards this suggestion of “political association” is that, reviewing the transaction from the beginning to the granting of the lease and especially to its later stages, involving events not yet narrated, including the non-fulfilment of the covenants and the non-voidance of the lease notwithstanding this, also the proposed introduction of non-Saorstát nationals with all that he alleges in connection with this, it is “chock full of politics”. Politics, in his view, pervaded the entire transaction, but he stated that it is in the period subsequent to the granting of the lease that this is mainly noticeable. Deputy McGilligan says that if the lease had been operated by Senator Comyn and Deputy Briscoe in a normal way on their own behalf, he would have nothing to say against the method of granting it; but the evidence of political favouritism in the post-lease period is so strong and definite that he states that he is forced to the conclusion that the granting of the demise was likewise coloured by political association. He states that in his earlier speeches in the Dáil he did not allege that the Minister’s political association with the lessees was a determining cause of the grant being made to them. An attempt, he says, was on that occasion made to force him to say so. He said then that he believed it to be so, and would eventually ask the public to agree with him. Before the Committee he repeated these views, and undoubtedly he leaves very little gap between the definite statement contained in the Terms of Reference and his statement of the charge. His justification of his position is the abnormality which he alleges in the procedure adopted by the Departmental officials in dealing with this application. He accuses them of laxity, of precipitancy in acceding to the application, of an insufficiency in their examination of the facts of the case. Though he is aware that the Minister personally knew nothing of this application being pending in the Department, he alleges that political considerations caused the results described, in so far as the officials subconsciously yielded to the desire to do something which would be acceptable to the Ministerial head of the Department, i.e., to facilitate the new Governmental policy, to which the Departments generally were at the time conforming themselves. He states that without their being perhaps aware of it an influence radiated from the Minister to the officials. Yet he says that any man of sensibility, who was quick-witted, would appreciate the existence of this influence. There is, he further says, nothing special to the existing Administration in this radiation of influence from Minister to officials. He has no doubt that it existed in the period when he himself was Minister. He even gives one example of it in his time. Officials are not corrupt or wanting in courage if they sometimes succumb to it. The important thing for a Minister was, he says, to devise checks which would obviate the possibility of abuses arising from this source. He states that in his time he recognised this danger and provided for it. In the present case he points out that, the application having been duly lodged in the Department, it is admitted that no examination was made into the adequacy of the sum of £200 stated in it to be available for the work, nor into the technical capacity of a youth such as Mr. Norman, not, at the time, of age. He further states that, when the latter retired from the matter there was no examination into the ability of the two remaining proposed lessees to carry out the work nor were they asked for the names of the experts they proposed to engage. Covenants as to employment were neglected, and nothing was done about it. Such methods of discharging public business would, he said, not have been normal or even possible during his period of office. He goes so far as to describe them as “shocking.” When the Mines and Minerals Act was passing its stages as a Bill through the Oireachtas under his care he stated that he expected that applicants would be examined as to their financial and technical competence. Subsidiary points made by Deputy McGilligan were, that he could not understand why rules were made whereby a questionnaire was issued, yet when the Department received the answers they disregarded them; the method of applying royalty percentages adopted in another country to a new situation here is slap-dash; the statement that £200 was the sum to be applied was a red light which should have started a thorough investigation into the feasibility of the project. He believes that in this case the lease was more easily granted than if the applicants were outsiders. The explanation of all these things is that Civil Servants felt that they would not be censured. Yet (Deputy McGilligan concluded) if it were not for the aftermath of the whole affair he would not go the length of saying that politics coloured the granting of the lease; in view of the subsequent history he is obliged to do so.
Departmental Defence to Allegations at Paragraph (a).
The general charges of Deputy McGilligan just referred to, it will be noticed, are based not only on official acts or alleged omissions to act prior to the granting of the lease, but also on happenings involving the Department which occurred after Senator Comyn and Deputy Briscoe had got their two years’ lease. The defence of the Department to his charges, in so far as the pre-lease period is concerned, now claims attention; their defence to allegations concerning the later period appears in its appropriate place. There is a general denial that facilities were given to the lessees in this matter. It was stated that the normal practice of the Department was followed; that at all stages permanent officers dealt with the questions arising from the application; that the lease was eventually signed and sealed by the Secretary of the Department without the Minister being brought into the case; that the officials were not, therefore, instructed by him, nor were they conscious of any influence radiated from him; in fact, that Senator Comyn and Deputy Briscoe received the same treatment as other equally well-known persons outside the Oireachtas. The official witnesses admit that no examination was made as to the adequacy of the sum of £200. The financial position was, however, in their view, governed not by the statements made in the application, but by the covenants in the lease, which were binding on the lessees. If the execution of the covenants required the expenditure of more money than £200, the Department holds that it is in a position to insist on this being spent notwithstanding the terms of the application. If the covenants were not observed the lease could be voided. But in the earlier stages of an activity such as this, things should be made easy for the prospectors, they consider, in view of the fact that they were risking their own money. If there were competitive schemes before the Department the comparative financial and technical resources would be taken into consideration. There was no statutory duty, imposed on the Department by the Mines and Minerals Act, they stated, to decide or recommend whether any sum of money was sufficient for a particular enterprise. No inquiry, it was admitted, was made into the technical qualifications of the applicants, either before or after Mr. Norman went out of the affair. The Departmental attitude was governed by the opinion of their economic-geologist, viz., that very little more is required in prospecting than physical endurance, and the analogy of the “grub stakers” in other countries was cited. Such searchers for gold approach their work with no money and only the minimum equipment of implements. In deciding to grant a lease the Department stated that they were swayed by the desire to increase employment in the area. The sole choice before them was between getting some capital spent on this work and getting none, between providing for the continuous employment of four able-bodied and experienced miners and having none employed. In deciding the royalty that would be charged the practice in force in the neighbouring country of Great Britain, and in this country before the Treaty, was adopted. The practice is set out in a Memorandum of the Commissioner of Woods. The economic geologist likewise advised on this matter, and the practice appeared reasonable. The officers of the Department adopted 4 per cent. for this purpose, and remain convinced that the public interest was adequately safeguarded by that figure. They are not convinced that 6¼ per cent. could have been obtained by them even though it transpired afterwards that the lessees were able to realise it and other advantages as well. These concessions are not advertised for the receipt of tenders, and the Department had in fact been at one time in communication with the parties who offered these terms to the lessees, viz., Mr. Heiser and his associates.
On the question of “radiated influence,” the evidence of Mr. Leydon, Secretary of the Department of Industry and Commerce, was that the Minister never conveyed the impression to him that applications of this kind from the Minister’s own political associates were to be dealt with in any different way from that in which applications from any one else should be dealt with. He thought it was impossible that he could have been permeated with this “atmosphere” without his knowing it; he believed that Mr. Ferguson, the Assistant Secretary, could not be permeated with the atmosphere, either, without his own knowledge or without his (Mr. Leydon’s).
A final judgment on this allegation of political association must await the examination of further allegations dealing with the operation of the lease. The finding of the Committee on paragraph (a) of the Terms of Reference and on the allegations made in reference to the post-lease period appears at the end of this Report.
Paragraph (b) of the Terms of Reference.
The allegation of Deputy McGilligan set out at (b) in the Terms of Reference is that the demise was “made under conditions of secrecy.” In this case there is no denial by that Deputy that he has said so. He does, however, join issue on the meaning which should be attached to the word “secrecy.” As used by him the word means merely “non-publicity,” and the context in which he used the word “secrecy” is that this is an age of concessions and licences and that all such should be published; this more especially applies when members of the Oireachtas endeavour to get things not in a representative capacity but for themselves. He was questioned as to whether he imported into that term the idea of “stealthiness,” and he replied that obtaining benefits by “stealth” had reference to the sub-lease but not to the granting of the lease. That is to say that there was no deliberate pondering of the matter for the purpose of obtaining secrecy. He was asked further, if then he included in the term secrecy any prejudicial meaning. He answered that he did, but only in the sense of “imprudence.” It would, therefore, appear that his view is that there was non-disclosure of the granting of the lease, that this was not deliberately done to prevent the public from knowing of it. In his view it was imprudent not to make disclosure having regard to the fact that the lessees were members of the Oireachtas and of the political party in power.
In proceeding to deal with the charges involved in this statement, he argues that the fact that many officials in the various Departments were aware of the facts of this case does not disprove secrecy, this being a query that was put up by some members of the Committee. The non-disclosure was to the general public. The proper procedure to adopt for the purpose of publication was, he said, to lay the lease on the Table of each House of the Oireachtas. There was, he holds, power to do this under the statute, by extending the term even by one day. But at this point the Department joins issue with him. This was a prospecting lease, they said, granted under Section 11 (2) of the Mines and Minerals Act, 1931, and under that section its term could not exceed two years.
P. 101. col. 2.
Deputy McGilligan’s rejoinder to this is to the effect that he is unable to accept that this is a prospecting lease, that it does not in any part use the descriptive word “prospecting,” and that under the Act there is no reason why the term of the lease should not have been somewhat extended, thus making it compulsory to bring the matter to the notice of both Houses. He states that the fact that the lessees were members of the Oireachtas and of the Government’s political party was a sound reason for extending the lease in this way and thus taking the matter into the open. But apart from the method of procedure he believes that other ways could have been found of giving publicity. He holds that members of the Oireachtas should have full access to all Departments for the purpose of discharging business connected with their constituents, but that if private advantages were sought by public representatives from Government Departments the full facts should be revealed. He argues that the Dáil as an institution is apt to suffer in the opinion of the public if its members are thus gratuitously given State property without public attention being directed to such transactions. The Departmental view was that in law or administration there was no ground for differentiating between members of the Oireachtas and of the general public.
The Minister for Industry and Commerce on being asked whether, as a matter of general principle, he saw anything requiring special caution when members of the Oireachtas sought special concessions from the Government, said his view was that members of the Oireachtas should be treated exactly as any one else, and that there was nothing improper in their benefiting by privileges available to all citizens. On the question of publicity particularly he recalled that as a member of the Opposition he had proposed an amendment to the Mines and Minerals Bill, that all leases, whether prospecting or mining, should be given publicity. He was not successful in carrying this.
The finding of the Committee on paragraph (b) of the Terms of Reference appears at the end of this Report.
Members of the Oireachtas and State Contracts.
Arising from the general question as to precautions to be taken in connection with concessions to members of the Oireachtas from the State, questions were directed by members of the Committee to Departmental witnesses with a view to ascertaining whether members of the Oireachtas who held Government contracts were entitled, in the opinion of the Department, to continue to hold office as members of the Oireachtas. The existence of a statute in Great Britain dealing with the inability of persons holding contracts with the Government to remain members of the House of Commons was brought to Mr. Ferguson’s notice by a member of the Committee, but Mr. Ferguson stated that his mind was so free from doubt on the line his Department were pursuing that he did not specifically inquire into its application in this country. Mr. Leydon corroborated this view, saying that no consideration was given to the question, and that, in fact, the law requires no distinction to be drawn between members of the Oireachtas and the general public. On the point of contracts being given to members of the Oireachtas, he brought forward an opinion of a former Attorney-General, furnished to the Executive Council of the day, to the effect that such members are eligible for contracts under the State Lands Act, and that the Electoral Act does not include the holding of Government contracts in its list of disqualifications for membership of the Oireachtas. This was in 1928, and the Attorney-General was Deputy Costello. Since that time no member of either House has been held to be debarred from holding Government contracts.
The Committee do not wish to express an opinion on this matter.
Devolution of Statutory Functions by the Minister.
A matter that came up for consideration at this point and which is germane to the general allegation of Deputy McGilligan -"That the action of the Minister in making such demise was improper"—(which is dealt with later in this Report) rather than to anything contained in paragraphs (a), (b), and (c) of the Terms of Reference is an objection to the grant of the lease to Senator Comyn and Deputy Briscoe on the ground that certain statutory duties incumbent on the Minister for Industry and Commerce personally were not, in fact, discharged by him, but were performed by officers of his Department. The relevant section of the Mines and Minerals Act, 1931, is Section 11 (1), which is as follows:—
“If in the opinion of the Minister it is in the public interest that any State mines and minerals or any exclusive State mining right should be granted by way of lease to any person, the Minister may, under and in accordance with this Part of this Act, demise such State mines and minerals or exclusive State mining right to such person by way of lease . . . .”
This power to demise is extended in Section 11 (2) to prospecting leases. Deputy McGilligan’s objection to the procedure followed, is that it does not show that the duty imposed on the Minister in this section of forming an opinion that it was in the public interest to grant this particular lease was performed, in view of the admission that he (the Minister) was unaware of the grant until after it had issued.
During the period when he (Deputy McGilligan) was Minister for industry and commerce a doubt was expressed to him, he said, as to the legality of the performance by Departmental officers of statutory duties imposed on the Minister. It was shown to him that in Great Britain power was given by law to a Minister entrusted with such functions to delegate them to permanent officials. This was never included in any statute in Saorstát Eireann. In consequence of the doubt thus arising the Minister referred the matter to the Attorney-General of the day for his opinion. This was given to the effect that there was no right under the Ministers and Secretaries Act to delegate statutory duties. As Minister he (Deputy McGilligan) caused a memorandum to be framed instructing officers of his Department that any such duty must be brought to his notice. He states in his evidence that he was confronted by a dilemna as the transaction of business would undoubtedly be retarded if effect were given to this legal position. He even consulted the Secretary of his Department as to how this dislocation of business could be obviated.
Two representatives of the Department gave evidence after Deputy McGilligan and discussed this question. They were the Secretary and the Minister. Mr. Leydon describes it as a very difficult question, but one upon which there is no court decision. He was aware of the opinion of the former Attorney-General, but recognised also the impossibility of making the Minister personally aware of all the matters that would be brought within the scope of the ruling. The matter was, he said, the subject of an opinion, at a later stage, by a Departmental officer, who acts as legal adviser. This gentleman’s view was in effect contrary to that of the Attorney-General, quoted above, and it was adopted in the Department as the basis of action. Mr. Leydon in reply to a query, stated that the question was not submitted to the Attorney-General in office on the second occasion on which the matter arose. By acting thus the administrative machine was kept working, where otherwise it would have been brought to a standstill. He points out that all leases granted under the Mines and Minerals Act, 1931, were treated in the same way, that is, not submitted to the Minister. This procedure also applied to leases under the State Lands Act, 1924, in which there was an analogous provision in respect of the Minister’s function. Mr. Leydon, however, instances one type of statutory duty which is invariably referred to the Minister, namely, where the latter is required to do something in writing under his own hand. The Minister’s personal decision is always taken in such cases. Mr. Leydon’s view is that this phraseology has some significance, and that, where a statute does not include it, there is more freedom for Departmental action as distinct from personal attention by the Minister. The Minister’s evidence agreed with that of his Secretary. He approved of the advice of the Departmental legal adviser, given to him in December, 1933, rather than the contrary one of the former Attorney-General. It would be physically impossible for him to deal with all such cases, and he did not personally express his opinion in this case that it was in the public interest to grant the lease. He was satisfied that the general working of his Departmental under the Mines and Minerals Act was in accordance with his policy and directions. There was nothing abnormal in this lease requiring it to be brought to him. Mr. Leydon, from his angle, had already expressed this opinion, namely, that he did not think the granting of the lease to Senator Comyn and Deputy Briscoe was of sufficient importance to require the personal attention of the Minister.
The opinion of the Committee on this matter is set out at the end of this Report
Non-payment of Dead Rent and Costs.
The lease having been granted on the 1st November, 1934, the manner in which the lessees dealt with the powers given to them therein and the subsequent history of the undertaking form the basis of considerable criticism by Deputy McGilligan. It is in connection with this period also, that he claims that more and more politics on the side of the Minister and the Department crept into the matter. The sequence of events must be noted.
In point of time the first matter which he alleges is a failure on the part of Senator Comyn and Deputy Briscoe to discharge their indebtedness to the State in respect of dead rent and of costs for the preparation of the Indenture. These sums fell to be paid on the date of the execution of the Deed. They were not paid then and various letters asking for payment were sent to the lessees by the Chief State Solicitor without result. This officer eventually inquired from the Department of Industry and Commerce whether they wished to institute proceedings for the recovery of these debts. The Department sanctioned this course in or about the 12th March, 1935, but no action was taken as the required payments were made just before that date. The lessees did not explain this remissness on their part. It was connected by Deputy McGilligan with other cases, already referred to, in which legal proceedings were threatened against Senator Comyn and Deputy Briscoe, in an effort to show that these gentlemen were not willing to risk much of their own money. The other instances referred to were (1) the account of the Irish Boring Company and (2) the consideration agreed upon for the release by Mr. G. H. C. Norman. To what extent the two latter cases sustain the inference drawn by Deputy McGilligan has already been discussed in this Report. As regards the present claim by the Department of Industry and Commerce and the Chief State Solicitor, it is useful to recall that Deputy Briscoe had, for some time previous to the signing of the lease, lost his enthusiasm for the whole project. Senator Comyn was obliged to press strongly in order to overcome Deputy Briscoe’s reluctance to complete the lease. The Deputy states that he had not the wherewithal or the scientific knowledge to develop the mine in such a way as to be able to say whether he should go on or not. He was, furthermore, in disagreement with Senator Comyn on the method of developing the mine. He states that he received information from Professor Bailey from which he reached the conclusion that, unless they could get a certain class of machinery of a modern scientific nature, the mine could not be developed, and that it could never be worked on the basis that Senator Comyn had in mind, namely, small units of men panning. This, in fact, would be a mere waste of time. Prior to the 10th March, Deputy Briscoe had transferred 50 per cent. of his interest to Deputy Breen, a transaction which he admits he would not have effected after that date. During all this period the demands of the Department and of the Chief State Solicitor were ignored. About 10th March, 1935, however, pessimism was abandoned, on the appearance of Mr. Heiser, which was quite unexpected. The proposition thereafter assumed a different appearance. The demands of the Department were about the same time discharged.
Sanction to threaten proceedings for the rent and costs had been given by the Minister personally on the 21st February, 1935. The evidence brought out a matter which should be mentioned. This question of legal proceedings provided the first occasion of sending the file to the Minister. It was the first official information that came to him of the concession granted to two members of the Oireachtas and of his own Party. The reference to him was made in consequence of a general instruction that all cases in which legal action was contemplated by the Department should be referred to him before any such step was taken.
Results of the Work of Development.
Before considering the amount of work put into the development of gold deposits in the area included in this lease it should be mentioned that at an early date in 1932 Senator Comyn and Deputy Briscoe were, in conjunction with some of the Wicklow representatives in Dáil Eireann, inquiring into the possibility of mineral development in that county. Deputy Briscoe states that he never included gold in these inquiries until Mr. G. H. C. Norman came on the scene, and until after he had induced Senator Comyn to stand in with him. Mr. Norman’s work has been described in an earlier part of this Report. It continued actively from March to July, 1933, and was resumed in the winter months. His efforts yielded practically nothing and his judgment is that any attempt to form a gold mining company in respect of this area would deal with ground that has never been prospected. He states that “The people of this country are only making it a laughing-stock throughout the world by thinking of forming a company. They have not found one piece of ore.” He estimates that from March, 1933, till the date of notification that the Department would be prepared to lease three townlands to the partners, the value of the gold found by him was 1/-. From April to the end of June the gold found would be worth 7/-. Altogether during the period during which he and a workman were operating the hand-washing cradle in the autumn, he said that his finds were worth 25/-. He describes the gold obtained during an earlier period in the following words: “Infinitely tiny small pieces, what would be good enough for the microscope simply.” His searching had results so discouraging that eventually he abandoned the partnership.
P. 233, col. 2.
Qs. 2842; 2844.
As regards work done by Senator Comyn and Deputy Briscoe subsequent to the grant of the lease, the evidence is not informative. The Senator was known in the Department to have discovered phosphates in County Clare, but he admits to the Committee that he did not know very much about gold, and that he was not able to pan. He relates one excursion made as a member of a party, where, after trial, he says he found a “tiny speck.” Deputy Briscoe was with him on this occasion, the date of which seems to have been in the year 1932. The finding is described by the Deputy as follows:—
“We dug out a little bit of gravel with our hands and when I examined it I found what I thought to be a little bit of gold or colour. Senator Comyn agreed that it was, and from that time on we began to discuss the possibility of following it up.”
The operations of the Boring Company were inconclusive, as has been shown, and the Senator stated that he did not feel justified in forming a public company without an examination of the deeper gravels. Again he says, in reply to an objection that returns as to minerals found were not furnished in accordance with the covenant in the lease, that the Department were in touch with them and were aware that, as the months were passing, no gold was being found. The work, which they performed after the granting of the lease, was frankly the inexperienced operations of amateurs in the business of prospecting for gold, and the results of their labour were eventually stated to the Department to be “nil”. This must be accepted even though the Senator lays claim to some results from laboratory work of analysing samples got on the spot.
Deputies Breen and Hayes Acquire Shares in the Lease.
The ownership of the leasehold property was extended some time after the granting of the lease. Deputy Breen applied to Deputy Briscoe for a share in it. He stated that he could find help towards the development of the property in a way that suited Deputy Briscoe’s requirements. Deputy Breen represented that he had with him men with money, who were themselves in touch with money, and that he would also find a mining engineer to set the business going. Deputy Briscoe agreed to give him half of his holding on these conditions. Deputy Breen then approached Senator Comyn, who made over to him 10 per cent. of his interest. Deputy Breen next pleaded on behalf of Deputy Seán Hayes and the Senator made over to this Deputy 5 per cent. Deputy Breen’s solicitor was Mr. J. F. D’Arcy, of Tipperary, who enters into the train of circumstances rather prominently as will be seen. The principals in this venture, having thus been rearranged, paid some visits to the ground. Questioned as to the amount of money spent in wages prior to March 10th, Deputy Briscoe replied that it amounted to £5, paid by Deputy Breen to a miner whom he had brought from the south of Ireland. Outside this, all efforts made were by the three Deputies and the Senator personally.
Mr. Heiser's Approach to the Lessees.
At this stage Mr. D’Arcy brought forward a proposition. As he was about to visit London, he offered to seek out a friend of his, a stockbroker in that city, and get his aid in finding a suitable mining engineer to survey the townlands mentioned in the lease This offer, though known to the others, was made in the interest, and on the responsibility, of his client, Deputy Breen, though Mr. D’Arcy admitted that he would endeavour to charge all four with any costs arising from the accomplishment of his mission. However, his object was to get a reliable and independent report from an expert to enable him to guide his client, and perhaps himself, in the investing of money in the venture. He made the journey and interviewed his friend, who said that he would require some time to interview parties before naming any one. Mr. D’Arcy was obliged to leave for Ireland on a Thursday, before these inquiries were finished. It was on the following Sunday that Mr. M. E. Heiser appeared in the Gresham Hotel, Dublin, with his tempting offer. The date of his arrival there was March 10th. Mr. D’Arcy had never heard of Mr. Heiser up to this time, he stated, nor was his name mentioned to him in London. The reason for the reappearance of Mr. Heiser on the scene is important in view of the charge of Deputy McGilligan that Senator Comyn and Deputy Briscoe, two Fianna Fáil members of the Oireachtas, having acquired State property in an unusually simple manner, and, having done nothing to increase its value, “jumped across to London” and trafficked it for 48,000 shares of 5/- in a development company plus a royalty to themselves of 2¼ per cent., all the obligations undertaken by them towards the State being taken over by the interests represented by Mr. Heiser. One theory is that Mr. Heiser’s appearance was the outcome of Mr. D’Arcy’s visit to London. Mr. Heiser is a mining engineer of standing, and Mr. D’Arcy went to London to find such an engineer. It may have been that the London friend of Mr. D’Arcy was responsible for his arrival in Ireland so hot on the heels of Mr. D’Arcy. The evidence of the latter that he was unaware of Mr. Heiser’s existence until after the offer had been made must be accepted. There are, however, other theories stated in the evidence, to account for Mr. Heiser’s appearance so soon after the lease, which he at one time desired to acquire, had been given to Deputy Briscoe and Senator Comyn. One is put forward by Senator Comyn to the effect that he came on the suggestion of Mr. Manus Nunan, B.L., who acted in the capacity of Secretary to an Irish branch of the Risberget Iron Ore Property Syndicate, Limited. Nothing has been brought forward to support this view. Deputy Briscoe’s opinion is that Mr. Heiser’s intervention was the outcome of correspondence with and suggestion from Mr. Summerfield. Mr. Summerfield was also connected with this Irish branch of the Risberget Syndicate, and his evidence is that Mr. Heiser was in America from the year 1930 till February, 1935, having despaired of leases in Ireland. Mr. Summerfield produced a letter to the Committee written by Mr. Heiser from New York on February 20th, 1935, stating that he was coming to London, and that, shortly afterwards, he would arrive in Dublin to resume his “gold plan in Ireland.” his arrival in London would appear to have been a few days before that of Mr. D’Arcy.
Mr. Heiser’s Negotiations and Agreement to Purchase the Lease.
On the morning of his arrival in Dublin on the 10th March, 1935, Mr. Heiser summoned Deputy Briscoe to meet him at his hotel.
He stated that he had been informed that this lease had been granted and that he was desirous of negotiating its purchase. Deputy Briscoe arranged a further meeting that night at which Senator Comyn was present. Neither of the lessees had met Mr. Heiser previously, and they inquired into his references. Various names of people of standing in London were given, but the name of a local business man satisfied the Deputy and Senator. This was Mr. F. M. Summerfield, who is stated to have been associated with Mr. Heiser in his investigations into the gold deposits in County Wicklow some years earlier, who was a fellow-shareholder in the Risberget Company, and in some Dublin mining companies also, and whose office, transport and services were at the disposal of Mr. Heiser, while he was prospecting. Mr. Summerfield had remained in communication with Mr. Heiser after the latter had gone to the United States.
After some negotiations Mr. Heiser agreed to take a sub-lease from the lessees in consideration of giving them 48,000 shares of a nominal value of 5/- each, in a company to be formed to develop the property, and 6¼ per cent. of any gold found. The document embodying this Agreement is given as an Appendix to this volume. It contemplates that the consent in writing of the Minister for Industry and Commerce to the sub-lease-a provision already inserted in the lease proper-would be a necessary step in the transfer. The areas mentioned in the Agreement include not only the three townlands of the lease, but in addition various other townlands for which, at any time, application for leases was made by the Deputy and Senator, as well as the foreshore at Arklow. He undertook to take over the working of the property at once and to introduce labour on an increasing scale beginning with not less than four men during the first two months. He agreed to give a bond for £500 for the fulfilment of the various conditions mentioned as to working the mine and giving employment.
Mr. Heiser’s Motive in Making His Offer.
The first query that arose in the Committee on this Agreement was as to the reason why Mr. Heiser, who had been absent for four or five years from Europe, reappeared with such suddenness and, without pursuing any investigations on the spot, made this offer to Deputy Briscoe and Senator Comyn. Deputy Briscoe gave his view on this matter in the following words:—
“Mr. Heiser stated that he knew all about the area; that he had been working there for years, and that he had spent considerable money in the area. He said that he knew that the area we had was valuable from the point of view of gold content, and that he and his friends were interested.”
Senator Comyn’s view is less definite:—
“I now suspect that, in his investigations four or five years ago, he had come to the conclusion that in this valley there was a rich deposit of gold.”
Again the Senator says:—
“I am only surmising, but my opinion is that Heiser has a very good idea of where the mother-lode will be found on the working of the gravels when he will uncover it.”
These views are to the effect that Mr. Heiser was a person whose former mining work was so thorough and precise as to justify him paying the equivalent of £12,000 together with a royalty of 6¼ per cent. on all minerals found, and burthening himself as well with the obligations to introduce expensive mining units, to employ a considerable number of labourers, and to maintain an organisation for the purpose of raising and disposing of the minerals. In this connection the views of Mr. Summerfield cannot be neglected. Mr. Summerfield was the only one of the persons who had an intimate knowledge of the former operations of Mr. Heiser, and of the state of his mind at the time of the offer. He was a partner with him in this former work. He says that in the year 1930 he gave him a cheque for £100, the use of his office, men and cars. Yet he says in his evidence in connection with the gold prospecting in Wicklow at that period that he was still “waiting for Heiser to have an opportunity to prove himself. Whilst we did not doubt him and whilst we believe he is a man of the utmost respectability as a mining engineer, and quite strong financially, we have had no opportunity up to now to prove the accuracy of his opinions on this gold mining situation.” Again he says that Mr. Heiser is “not a commercial business man. I believe him to be an excellent mining engineer and a man who talks rather loosely.” Mr. Summerfield’s view as to the reasons impelling Mr. Heiser to enter into the Agreement with the Deputy and the Senator-an Agreement to the terms of which Mr. Summerfield said he was totally opposed-is that he was wearied by the repeated delays and felt that his financial colleagues in London would require him to produce some lease quickly, else they would lose interest in the entire proposition. It was not that he had any special interest in this particular lease. Finally, Senator Comyn in his evidence attributes to Mr. Heiser a statement made when the Agreement of the 12th March was being discussed, with reference to these London financial associates, viz.:—“I cannot get these men to put money in it unless I have it tried.” This would show that on that date Mr. Heiser had not definite knowledge to offer them. The Committee can only state, therefore, that there is no conclusive evidence before them giving a clear and satisfactory explanation of the extensive offer made by Mr. Heiser. A good deal of light is thrown on his purpose by his subsequent dealing with the rights which he acquired under this Agreement.
Character of the Company to be Formed.
A further question which attracted attention in the course of the examination had reference to the character of the company to be formed. In the discussions preceding the completion of the Agreement of the 12th March some consideration would appear to have been given to the source from which the capital (£80,000) was to come. The impression left on the minds of the various persons present during these discussions is varied. Thus Senator Comyn, who argued at some length before the Committee his objections to a public company, stated that, in the negotiations, he and his party stood out for a private company and were against a public company. In the course of his examination, however, he admitted that no one on his side specifically stipulated that the work should be carried out by a privately owned company and not by one publicly floated. Deputy Briscoe’s evidence is to the effect that there was never any suggestion that his party should permit the flotation of a public company. But in replying to a comment that the word “private” is not used before the word “company” in the Agreement, he takes up the position that the form of the company is a matter not for him but for the Department of Industry and Commerce. His words are:— “I put it that anything in connection with the company was not my business. That was a matter for the Department to take care of.” In general, however, Deputy Briscoe agrees with Senator Comyn in his statement that the tenor of the negotiations was that the capital, viz., £80,000, was in hands at the time, or could be immediately found from private sources. Mr. Summerfield, who was present during some of the discussions, stated to the Committee that no question was raised as to whether the company was to be a public or a private one, but, notwithstanding this, he also stated that Senator Comyn expressed his aversion to anything which might mislead the Irish investing public. He goes the length of saying that the Senator permitted the inference that his solicitude was not so great for the British public. Mr. Summerfield records his view of the negotiations as follows:— “I always assumed that if you were looking for £80,000 that it was going to be a public company underwritten in London and not got from Irish subscribers.” Mr. Heiser’s view is given in the course of a letter to Mr. Summerfield dated 1st October, 1935, and read to the Committee:—“We wish to mention that the public company agreed to by Messrs. Comyn and Briscoe was to have a paid-up capital of not less than £80,000 with a total of £200,000 … There was, incidentally, never any suggestion of a private company.” In default of establishing unanimity from the statements made by the parties present at the time, recourse must be had to the document of the 12th March containing Mr. Heiser’s offer on which is endorsed the acceptance of Deputy Briscoe and Senator Comyn. The form of words used therein is as follows:—“I undertake to form a company to be called the Consolidated Goldfields of Ireland, Limited, or some other name to be substituted therefor with paid-up capital of not less than £80,000 …” It is a safe inference from this that no restriction was placed on Mr. Heiser as regards the type of company-public or private-to be set up. In view of subsequent happenings it should be noted that Mr. Heiser, in his letter just quoted, makes use of the words “paid-up capital of not less than £80,000.”
Failure to Furnish the Bond for £500.
The transaction of the 12th March with Deputy Briscoe and Senator Comyn having been completed, Mr. Heiser’s difficulties were not greatly diminished. The only asset which he had acquired was a conditional one. He had a right to a sub-lease from the existing lessees, provided the Minister for Industry and commerce gave his consent. In the meantime the continuance of the prospecting work as required by the lease was suspended. Mr. Heiser returned at once to London to report to his associates. The first difficulty experienced by the latter was the provision of the bond for £500, which, under the Agreement, was required to be completed on or before the 30th March. It should be a bond of an insurance company, approved by the lessees. On the 26th March Deputy Briscoe was informed that the Risberget Company had failed to find an insurance company willing to issue such a bond to them save at a premium of £500. Deputy Briscoe was unable to assure the Committee that this requirement of a premium of £100 per cent. bespoke any credit for financial stability on the part of persons who undertook to find a capital of not less than £80,000 for this enterprise. This clause in the Agreement had perforce to be waived, and the lessees agreed to accept the company’s own bond for the amount of £500. Deputy Briscoe’s explanation of this acceptance was that he did not wish to impede the work going ahead. Work, under the agreement, was to start on the 15th March, and Mr. Heiser would appear to have suggested during the conversations that he would set up a mining unit at a cost of £20,000 to make a beginning.
Mr. Dunn’s Survey.
Mr. Heiser was back in Dublin about the 19th April accompanied by a mining engineer named Mr. Dunn. The latter is represented by Senator Comyn as being also a man who was very eminent in his profession. The purpose of his visit was to examine the deposits in this area, and the Senator and the Deputy in a letter to the Department remark that his fee for this work amounted to one thusand guineas, thus indicating his professional status. The three Deputies and the Senator interested in the property accompanied Messrs. Heiser and Dunn to Woodenbridge and proceeded to pan the gravels. Mr. Heiser went into the stream for this purpose, and the others panned elsewhere. Results were not forthcoming and Mr. Dunn is stated to have become impatient. The Senator, thereupon, pointed out that Mr. Heiser had not asked him where the work should be done, and indicated another location. When this was examined some gravel was dug up by Deputy Hayes. This when panned showed six pieces of gold. This result is worthy of note as it is the only occasion recorded when a substantial find was made. Heretofore the traces of gold were “microscopic,” to use Mr. Norman’s phrase, or “tiny specks” which, in the opinion of Mr. Summerfield, for example, would not warrant any financial exploitation. This discovery of Deputy Hayes seems to have caused a sensation in the party, and to have determined the issue satisfactorily from the point of view of the visitors. Calculations began to be made from this time with the object of assessing the total value of the leasehold. A figure mentioned in this respect will be found at a later stage in this Report. Mr. Dunn was assumed to have come representing the syndicate putting up the capital of £80,000. It transpired at a later date that the financial interests to which he was reporting aggregated over £200,000. On the same occasion Mr. Heiser proposed to the lessees that they should agree to allow him to remove the Risberget Company from the scope of the Agreement and substitute Crusade Prospectors Ltd. The significance of this request is not quite clear because it would appear that the latter body merged in the former in the year 1930. Whatever may have been the purpose of the suggestion the lessees refused permission.
Failure to instal Mining Unit. Deputy Briscoe’s anxiety as regards financial undertakings.
It was on the same date, namely, 19th April, that Senator Comyn and Deputy Briscoe gave a licence to Mr. Heiser to prospect for gold over the area granted in the lease, but as their agent only. On the 27th April they licensed him to erect and operate for six months one mining unit, paying to them a royalty of one-sixth plus the royalty of one-twentyfifth due to the Minister. But notwithstanding these arrangements no machinery had arrived by the beginning of May, and Deputy Briscoe admits that a feeling of uneasiness was growing within him. His doubts centred on the financial side; he began to think that Mr. Heiser and his friends were unable to find the money. He determined to visit London to investigate the matter. He met Mr. Heiser and his associates and was assured that everything was proceeding normally. Deputy Briscoe, in recounting the various steps in this matter, next produced a letter from Mr. Heiser dated 17th May. In the interview and in the letter mention was made of American financial people who were coming into the transaction. Though it was now becoming clearer that the money was not in existence on the date of the Agreement, an assumption on which the lessees based their case that a public company was never in question, Deputy Briscoe professed to be considerably relieved of anxiety by this letter of the 17th May. This feeling of relief was again disturbed after one week, when Mr. Harrison arrived on the scene. The date mentioned in the evidence for his arrival is the 24th May; but as the day referred to was Sunday, and Sunday was the 26th, the 26th has been adopted as the date in this Report.
The Lessees Notify the Minister of their Arrangements with Mr. Heiser.
About the period beginning 25th April, 1935, Deputy Briscoe and Senator Comyn furnished the Department of Industry and Commerce with a number of documents which must now be noted. The first of these was an application for a further prospecting lease over a vast area included in roughly seventy townlands. In this connection the intention of the applicants would appear to be to register priority. On the same date the Department were furnished by the Deputy and Senator with a copy of their Agreement of the 12th March. With the Agreement they wrote a covering letter which contains paragraphs which were minutely examined in the course of the evidence, as will be shown subsequently. On the 6th May they wrote to the Department relatively to six townlands, which are the balance of the nine townlands to which their original application, in conjunction with Mr. Norman, applied. They requested the completion of the lease contemplated in this former application. This they did in order to comply with an undertaking in that regard given in the Agreement of the 12th March. In this last-mentioned letter, i.e., dated 6th May, they enclosed the licence given to the Risberget Company to operate a mining unit on the three townlands, the subject of the existing lease. They requested that the Minister should endorse his approval of this document. This request would appear to have been made at the instance of the Dublin branch of the Risberget Company. The Department, accordingly, subjected this licence to a close examination as regards its legal significance, and finally decided (1) that it did not transfer the legal ownership of the leasehold, and (2) that the Risberget Company could only act under it as the agents of the lessees. In these circumstances no consent was required on the part of the Minister and the lessees were so informed. The reply perturbed the company as they professed to be anxious to introduce expensive plant and so give immediate employment to many Irish nationals. They, therefore, wrote directly to the Department on the 21st May, 1935, requesting the Minister to assure them that his sanction to the sub-lease, which they had agreed to take from the lessees, would not be withheld. The Minister replied that he would find it difficult to give a definite assurance at that stage as the precise terms of the sub-lease were not before him, but that he was sympathetic to the largest practicable development of the mineral resources of this country by reputable firms with the necessary technical and financial backing. The object of the company at this stage was clearly to commit the Department beforehand to the granting of the sub-lease.
To return to the covering letter of the 25th April, the first matter in it that attracted the attention of the Committee was a statement that, in the three townlands comprised in the lease, there was discovered a “very big deposit of auriferous gravel.” This was contrasted with the “nil” return furnished by the lessees. Mr. Ferguson of the Department gave it as his view that these two statements were not necessarily incompatible. He points out that the return refers to gold produced, whereas the statement in the letter is a mere expression of opinion as to the situation. The letter then recited facts concerning the signing of the Agreement, enclosed a copy of it and went on to describe the visit of Mr. Dunn and his examination of the deposits.
Qs. 3105, etc.
The next matter of importance, brought to the notice of the Department in this letter, was a proposal by Mr. Heiser that the Senator and the Deputy should join with him in a syndicate to acquire leasehold interests in various mining areas. The syndicate referred to here was formed about this time under the name of Irish Prospectors Limited. It would also appear to be a subsidiary body to the Risberget Company. This proposal of Mr. Heiser had been rejected. Nevertheless, the syndicate approached the Department with an application for a lease. The date of this was also the 25th April, and the application appears to be a revival of the one made in the name of the Risberget Company before Mr. Heiser went to the United States in 1930. Senator Comyn, in his opening statement to the Committee informed them that this move was foreseen, or inferred as likely by him, and that the application in his name and that of Deputy Briscoe for a lease of 70 townlands was put forward as a counter move. Thus it is clear that, although these respective parties were working in co-operation so far as the Agreement of the 12th March was concerned, there was a state of rivalry or friction between them in the matter of further expansion. This was complicated by a mutual attitude of distrust. Mr Heiser and Mr. Dunn brought a complaint to the Department about this period that they had been informed by the Senator and the Deputy that they were wasting their money and time in buying ordnance maps and making applications for further leases because such leases could only be obtained through them, that is to say, the Senator and Deputy. This allegation is denied by the latter, who bring forward charges that Mr. Heiser and his associates were applying for leases but did not intend to work them, and that application for leases might be expected “not so much for the purpose of working them as for getting money from the public through the formation of companies.”This latter charge is worthy of note as being the earliest occasion on which an allegation of the wanton promotion of companies was preferred against any of the parties in this matter. At later stages in the history of this enterprise the same charge was repeated and extended to other persons. Deputy McGilligan included Deputy Briscoe and Senator Comyn in the list of persons chargeable in the same way. He says that their mine was a “dud proposition,” that they had got it for nothing, that they made no attempt to develop it, and that, at a very brief interval after being granted the lease, they seized an opportunity to dispose of this property, at extremely advantageous terms to themselves, and that their proposal was to push this useless gold mine on foreign investors through the instrumentality of the other parties to the Agreement of the 12th March. It is in connection with this charge that so much importance attaches to the plea of the Senator and Deputy that the Company in which they proposed to take shares was intended to be a private one, the finance for which was, for practical purposes, in hands from private sources at the time they contracted with Mr. Heiser. The justice of the charge against Mr. Heiser implied in the letter of the 25th April and in the relevant parts of the evidence of the lessees is shown by the use he made of the position which he had acquired through them, by his failure to instal the requisite machinery and by his proposed sale, in his turn, of whatever rights he acquired from the lessees, to a larger financial combination, for a sum of £10,000 together with 52,000 shares in a company with a capital of £200,000. These facts will be brought out more fully at a later stage.
Before leaving the question of the application by Senator Comyn and Deputy Briscoe for a lease of close on 70 townlands their justification of it, as made to the Department in this letter of the 25th April, should be given. It is as follows:—
“It was indeed suggested to us that the working for gold at the junction of the Lyre and the Gold Mine Rivers would make every other area in the district saleable. When we … showed to these mining engineers where gold was to be found in quantity, we anticipated that applications would be made for mining leases in the neighbourhood, and our purpose in making this application is to prospect the area with the object of working it and to deal fairly with Risberget and the company which is to put a capital of £80,000 into the working of gold in the district.”
The point raised here as to dealing fairly with the Risberget Company if leases over this great area were granted to the Senator and the Deputy was not pursued in the course of cross-examination.
In the course of another paragraph in the letter of the 25th April, the writers point out that, under their Agreement, the Minister’s sanction is to be obtained before any step is taken, their “primary object being the protection of the people who might be asked to subscribe in this country and to secure that the deposits will be worked rather than used for the purpose of exploitation.” This brings us to a portion of the letter which has been used to the utmost by Deputy McGilligan against the Minister and the lessees, but of which he only became aware when he was permitted by the Committee to see it.
Last Paragraph of the Letter of 25th April, 1935.
The final paragraph, which follows immediately on that last mentioned and expands it, is as follows:—
“The reason we said in our Agreement ‘ a licence for this company is to be obtained from the Minister ’ is because we felt this speculative class of venture should rather be subscribed for abroad than by our own people.”
The question as to a licence raised here is one that arises in consequence of the Control of Manufactures Act. The terms of that Act require the bulk of the capital for such a purpose as the one now in question to be raised inside Saorstát Eireann, whereas, in this case, it was to be obtained abroad. The lessees undertook, during an interview with a representative of the Department, to make out a case why such a licence should be given, and the paragraph just quoted is stated to be the result. No action was necessary on the letter, the Department stated, but ultimately the Minister would have to consider the argument contained in this part of the letter in connection with a new manufacturer’s licence under the Control of Manufactures Act.
Deputy McGilligan’s view of the purpose in the mind of the lessees in framing the paragraph is shown in the following quotation:—
“They (i.e., the lessees) were in this dilemma, I think, that they had probably begun to realise that this whole business was somewhat nasty at this time. I think that any two public men realising that there was a prospect of it being revealed some time that they had, as I said before, trafficked in property that did not belong to them and into which they have put no great moneys of their own; realising that it might be revealed in this obnoxious way that money had been called for from the public and had been invested in a concern found to be worth nothing, with all that before them, they were in this dilemma, that they had to protect themselves and at the same time they wanted to give themselves still the chance of doing well on this company, and they took this middle line of, to use an American phrase, ‘ passing the buck ’, and they passed it to the Minister.”
Deputy McGilligan held that the lessees were warning the Minister that this was a “dud” group and a “dud” proposition and that he should take such action in relation to that company when it came to flotation that no national would subscribe.
Asked if action by the Minister on receipt of this warning would only eventuate in something harmful to the flotation of the company, and so to the interests of the writers, Deputy McGilligan answered that it would be harmful so far as floatation in this country is concerned, but that the foreign investor would not be affected. He also stated that no public action by the Minister would be necessary and that the latter could personally stipulate with Mr. Heiser to “get that money elsewhere than in Ireland.”
Asked what in his view was the object of the warning, Deputy McGilligan suggested that the writers were giving notice to the Minister that he should be careful because, if Irish nationals lost money in this venture, “there is going to be a bad political row in this country and you (i.e., the Minister) will suffer.” He suggested further that the writers were preparing for themselves a line of retreat, but that they remained anxious to derive any advantage they could from their association with Mr. Heiser and, in effect, said to the Minister: “Watch yourself, but get this pushed over to the foreigner.”
To the suggestion that Senator Comyn and Deputy Briscoe may have had a laudable purpose in writing the paragraph now under consideration, namely, an endeavour to save the Saorstát national from contact with a deal in which the speculative possibilities were probably greater than the gold production., Deputy McGilligan replied that, from the angle of judging the badness or goodness of the company, he could not see the difference between that purpose and that of safeguarding the Minister and the writers from the political reaction which would follow if Irish nationals were “let down.”
Deputy Briscoe’s justification of the paragraph is as follows:—
“I have on occasions invited persons in An Saorstát to risk capital on ventures here when I had the view that they had a fairly reasonable view of succeeding or going on. In this particular thing I would never ask persons to put up money and develop it unless I am sufficiently satisfied that, in my opinion, it had a fair chance of success. At the time Mr. Heiser came along, with the partner, he had in mind a process which he claimed to have special rights over what other people had. He had two or three years’ experience of prospecting in the area, and I thought it was up to him to get the capital from his friends and not here.”
The method in which Deputy McGilligan connects the Minister’s administration with this paragraph will be found later in this Report.
Arrival of Mr. Harrison.
The next event of importance is the appearance on the scene of Mr. Harrison, of the firm of Harrison, Sugden & Co., Solicitors, London. On Sunday, the 26th May, 1935, accompanied by Mr. Heiser, he met Senator Comyn and Deputy Briscoe at the Gresham Hotel. He announced in their presence that he had bought the lease from Mr. Heiser and was coming to see the lands concerned. He had agreed, Senator Comyn noted in writing at the time, to pay £10,000 in cash and £50,000 in shares fully paid-up for an assignment of the lease subject to 6¼ per cent. royalty. He stated that he proposed to start a company; that he represented underwriters, and that the whole sum of £200,000 was underwritten. Senator Comyn pointed out to Mr. Harrison that he (Mr. Harrison) had bought a lease from a man who did not own it and said that Mr. Heiser had represented himself to them as having £80,000 in cash between himself and his friends. They had made a bargain with him that he would work the lease on certain terms, but they had never authorised him or anyone else to sell it and they would not consent to any public company. Some exchanges followed then between Mr. Heiser and Mr. Harrison. Mr. Harrison said to Mr. Heiser that he (Mr. Heiser) had not given him the copy of the Agreement for the sub-lease. Mr. Heiser pointed out that it was amongst Mr. Harrison’s papers. Mr. Harrison went to look for his papers and found the Agreement amongst them. He produced also a statement of facts prepared by Mr. Heiser in Mr. Harrison’s office and signed by Mr. Melkman, who accompanied Mr. Heiser there. Referring to that statement and a reference by Mr. Heiser to his process, Mr. Harrison addressed Mr. Heiser: “You are not selling any patent; you are not selling any process; you are selling a lease, and there it is—a lease of a rich mine; 17 millions of money you are selling that and it did not belong to you.” After some moments’ silence Mr. Harrison said to Mr. Heiser: “You brought me over here.” Senator Comyn said: “It was not he brought you over here. You came over here on Dunn’s report and you came over here on Holman’s report.” Mr. Harrison admitted that was so. “That was the last I saw of Harrison,” Senator Comyn declares. Before that interview terminated Mr. Harrison said to Mr. Heiser: Look here, Heiser, these men are inclined to give you a fair show. Can you possibly get rid of the sharks you have gathered around you?” On the following day Messers. Harrison and Heiser journeyed down to Woodenbridge to see the mine, accompanied by Deputies Briscoe, Breen, and Hayes.
Deputy Briscoe says that no interview took place between himself or Senator Comyn and Mr. Harrison in the interval between this visit and the 27th June. On the latter date, following upon Deputy McGilligan’s statements in the Dáil which led to the setting-up of this Committee, Mr. Harrison again came to Dublin. Senator Comyn refused to see him and advised Deputy Briscoe not to meet him except in the presence of his (Deputy Briscoe’s) solicitor. Deputy Briscoe states that he did not meet Mr. Harrison, and eventually the solicitors on both sides decided that in view of the inquiry before this Committee there should be no discussion whatever. It was on the occasion of this visit that Mr. Harrison is stated to have produced the draft prospectus of Wicklow Goldfields Ltd. This draft prospectus was headed “Proof No. 2, 26.6.’35,” and was printed. It was dated 26th June, 1935. There was no reference to a prospectus prior to this date. Deputy Briscoe stated that he was surprised when the draft prospectus was handed to him, a week or ten days after Deputy McGilligan had raised the question in the Dáil. He stated that he had no hand, act or part in it, and that he knew nothing of the formation of Wicklow Goldfields Ltd. Asked the circumstances under which Mr. Harrison handed him the draft prospectus Deputy Briscoe said Mr. Harrison’s words were “we have got this far.” meaning, according to Deputy Briscoe, that he (Mr. Harrison) had got the length of forming the Company without having been repudiated.
The Draft Prospectus.
The draft prospectus indicates that the authorised share capital is £250,000; the amount issued or to be issued, £200,000. The present issue is of 1,480,000 shares of 2/- each at par., the other 520,000 shares of 2/- being allotted, credited as fully paid, in payment of the mining leases and rights to be acquired by the Company. The directors named are Professor Holman and Mr. M. E. Heiser. The solicitors named are Messrs. D. and T. Fitzgerald, Dublin, and Harrison Sugden & Co., London. The Company is said to have been formed for the purpose set out in the Memorandum of Association and particularly to acquire two mining leases granted for 90 years to Mr. Michael Comyn, K.C., and Mr. Robert Briscoe, by the Government of the Irish Free State, which leases include nine townlands in Wicklow. Reports are then set out by Mr. G. V. S. Dunn, Consulting Mining Engineer; Professor Bernard W. Holman and Mr. M. E. Heiser. Mr. Dunn estimates that approximately £120,000 cash working capital will be required, of which £70,000 will be the cost of the necessary plant and equipment, and £50,000 for working capital. Some details are then given of the costs of working, concluding with the statement that “on this basis, with an initial capital of £200,000, the earning capacity should be equal to 41½ per cent. per annum.” under the head of Purchase Consideration, it is stated that the consideration payable for the properties and the Heiser patent process mentioned in the prospectus is £62,000, payable as to £10,000 in cash and as to the balance of £52,000 by the allotment of 520,000 shares of 2/- each credited as fully paid up in the capital of the Company. The preliminary expenses, exclusive of underwriting and overriding commissions, amount to £11,000; underwriting and overriding commissions, £8,000.
The draft prospectus was handed to the Committee by Senator Comyn on the 25th September. On the 1st October a letter was received by the Committee from Messrs. D. and T. Fitzgerald, solicitors, stating that the draft prospectus “Proof No. 2, 26.6.’35” was first seen or heard of by them on the 28th June, when Mr. Harrison showed them a copy, and that not until then had the firm been brought into touch either verbally or in writing with the matter; that they had on that occasion pointed out to Mr. Harrison that it was without their knowledge and consent that the name of their firm appeared, and that Mr. Harrison had assured them that the document was only a draft, and that needless to say their name would not be used without their consent.
On the same date Deputy Briscoe informed the Committee that he had been informed by his solicitor that Mr. Holman had, subsequent to the date of the preparation of the draft prospectus, intimated that he was withdrawing from the Company as a director.
Some misstatements appear, it will be noted, in the draft prospectus, viz., the reference to two leases, for 90 years, including nine townlands. At the date of proof No. 2 of the draft prospectus, there was in existence only a prospecting lease for two years, with an option for a lease of 97 years on certain conditions being satisfied. This lease had reference only to three townlands. No lease—prospecting or otherwise—had been granted for the other six townlands.
It is desirable at this stage to return to the account given by Senator Comyn of his meeting with Mr. Harrison at the Gresham Hotel. Questions were asked by members of the Committee which indicated a certain amount of incredulity on their part that a solicitor of standing and a business man, like Mr. Harrison, would come over to negotiate the purchase of property which he valued at £250,000 without inquiring into the title of the property. Senator Comyn could not, however, throw any light on the subject beyond stating that he believed that the position was as stated— the existence of the proposed sub-lease to Mr. Heiser was inconsistent with Mr. Harrison’s statement. It should be stated that Mr. Summer-field mentions that Mr. Harrison had spoken to him at this period about Mr. Heiser going so far as he did without something tangible. Mr. Summerfield mentions incidentally that it was always conveyed to him that Harrison was Heiser’s financial nominee.
Asked why Mr. Heiser had changed over from the scheme of an £80,000 private company to work the mine and tried to get up a public company, Senator Comyn thought that probably Mr. Heiser wanted to get quick money because under the proposed company about £70,000 or £80,000 would be “made by people abroad but not by himself and Mr. Briscoe. They were to make nothing unless the mine was a success.” Senator Comyn was then invited to confirm that what he had said in reference to Mr. Harrison’s proposal was that he repudiated the suggestion for the formation of a public company with a capital of £250,000. His words were, he said: “I would not accept the sale, or pretended sale, by Heiser of Mr. Briscoe’s lease and mine.” Senator Comyn rejected the Harrison proposals because it meant forming a public company and because Mr. Heiser was expecting to get too much profit out of a public company.
It has already been mentioned in connection with the examination of the Agreement with Mr. Heiser of the 12th March, 1935, that Senator Comyn stated that he was opposed to the idea of a public company. In giving his reasons for not having anything to do with this £250,000 transaction, Senator Comyn refers to the subject again. He stated that: (1) He did not want to be associated for a personal reason with a thing like that. He was the vendor; a barrister; and not a company promoter. He took an interest in prospecting and developing mines and minerals, but “mining companies are notoriously speculative companies”; (2) “We are starting to develop the mineral resources of the country— and this will probably be the first company, and it is just as well there should be no mistake about the first of them and that we should start on a solid foundation’; (3) he might accept the idea of a public company if it was put up that one, two or three borings had been made and that it was found that the gravels were gold-bearing to the very bottom; (4) in this proposed company, too much money is allocated, to use no stronger word than that, for purposes other than the working of the mine.
It has already been stated that Mr. Heiser would appear to have complete freedom (under the Agreement of the 12th March) as to the type of company to be formed, that is, as to its public or private character. To the further suggestion that, under the Agreement, Risberget & Co. had the power to dispose of their interest, subject, of course, to the consent of the Minister—a proviso which derived its efficacy not from the Agreement but from the terms of the original lease—Senator Comyn replied that Risberget Ltd. could not assign its interest except with the consent of the Minister and of the lessees; if it is not stated in the Agreement that the consent of the latter is required, it is implied.
There is a further point arising on the draft prospectus which is of some importance, namely, the suggested earning capacity of the proposed Company. Mr. Dunn’s report set out in the draft prospectus indicates, on the estimate furnished, that with an initial capital of £200,000 the earning capacity should be equal to 41½ per cent. per annum. Senator Comyn stated that he believed that report, having regard to the results of Mr. Dunn’s pannings and his own. There was a doubt, however, arising from Senator Comyn’s belief that Mr. Dunn’s valuation was based on a boring of only eight feet. If by any chance the deeper gravels were not rich, then the profit would fall. Asked if he could get capital in this country to exploit the mine, he stated that we were not a mining people; everything would go well if a good dividend were paid, but if the deeper gravels were not as rich as the others, people would blame him. What he wanted was that, they should put up £20,000 and work one unit. If they put up £80,000 and worked three units and made a profit, a beginning had been made and that would cover only three small townlands. There was much more land available after that. Let those who said they had the £80,000 and made a bargain with him “try it out.” If the latter were non-nationals and reaped 41½ per cent. on their money, they were entitled to the benefit so far as he was concerned because he had not seen Mr. Dunn’s report when he made his bargain. If the matter were open now, he would suggest to Mr. Dunn to proceed with one unit and to test the deeper gravels. If that were a success they might say to the Minister “what about a public company?”
It will have been noted that in the course of Mr. Harrison’s vehement outburst against Mr. Heiser at the Gresham meeting of the 26th May, Mr. Harrison said to Mr. Heiser:—… “You are selling a lease, and there it is—a lease of a rich mine: £17,000,000 of money …” Mr. Briscoe says that Mr. Harrison did not deny making this statement, that in fact he (Deputy Briscoe) had a letter in which Mr. Harrison definitely confirmed it. Publicity was given to this figure of £17,000,000 when, after Deputy McGilligan had raised the question of the lease in the Dáil, a joint statement appeared in the Press over the names of Senator Comyn and Deputy Briscoe explaining their connection with the gold mine concession. In the course of that statement the following paragraph appeared:—“Last May, Mr. Harrison, a member of an eminent firm of London solicitors, came to Dublin and informed us that his clients, a firm of underwriters, acting on reports, from two mining engineers of very high international repute, Mr. Dunn and Profefssor Holman, President of the Royal School of Mines, South Kensington, proposed to float a public company with a capital of £250,000 on the basis that the deposit contained gold to the value of £17,000,000.
Senator Comyn explained to the Committee that the italicised words were Mr. Harrison’s and theirs. They did not say that that was Professor Holman’s report or Mr. Dunn’s report. However, legal proceedings were threatened against several newspapers by Professor Holman, who took exception to the publication, on the grounds that he had never made the report alleged, and that the attribution to him of such a report reflected gravely on his professional position.
The description by Senator Comyn of his meeting with Messrs. Harrison and Heiser on the 26th May has already been given. It will be remembered that he noted in writing the terms of the assignment by Mr. Heiser, containing inter alia the figure of £50,000 in shares in Wicklow Goldfields Ltd., as part of the consideration. It will be seen, however, by a perusal of the draft prospectus that this figure is inaccurate and should be £52,000. The Senator’s evidence continued to the effect that, though their names appeared in the draft prospectus of Wicklow Goldfields Ltd. as vendors, he and Deputy Briscoe were strangers to the deal between Mr. Heiser and Mr. Harrison. Under this deal the shares held by the Senator and the Deputy would be in a £250,000 public company instead of in the £80,000 private company.
As to the beneficiaries under the draft prospectus, Senator Comyn stated that it was indicated in that document that all the shareholders in Risberget & Co. were to benefit under the Wicklow Goldfields Ltd. There were Irish shareholders, including Mr. Summerfield, who became a shareholder of Risberget & Co. on the merger in that company of Crusade Prospectors, Ltd., of which he had been a member. Mr. Manus Nunan, B.L., has been already referred to as the local secretary of the company.
Asked if, in his discussions with other shareholders of Risberget, they were sympathetically disposed towards the Heiser-Harrison proposal, Senator Comyn stated that Messrs. Summerfield and Smyth interviewed himself and Deputy Briscoe—Deputies Breen and Hayes were also present.—shortly after his repudiation of Mr. Harrison’s proposals. Mr. Summerfield opened the conversation by saying: “Well now, what happened between you and Heiser?” Senator Comyn asked him who he was and what interest he had in the matter. He replied that he was a shareholder in Risberget. Senator Comyn then asked him how did he get his shares. His reply was that he got them in lieu of shares or interest he had in Crusade Prospectors, Ltd. Senator Comyn then said: “Look here, Mr. Summerfield, you had better go at once and get the advice of a solicitor.” Senator Comyn’s explanation of this recommendation was that he thought Mr. Summerfield did not know that Heiser at Woodenbridge had suggested altering the Agreement of the 12th March so as to make it appear that he (Mr. Heiser) was acting for the Crusade Prospectors and not the Risberget Company. A further reason for this recommendation was given by Senator Comyn later on. Referring to the consideration Mr. Summerfield had said he gave for the shares in Risberget, namely, an interest which he had in Crusade Prospectors, Senator Comyn said that “that was in respect of money lost three years before …which was an illegal consideration.”
However, following upon the recommendation of Senator Comyn to Mr. Summerfield to consult a solicitor, Mr. Smyth said to Mr. Summerfield: “You are all right.” Senator Comyn then stood up and said he would have no more to do with this conversation. As he stood up, Mr. Summerfield said, Senator Comyn alleges: “You will hear more about this; you are not finished with us yet.” Deputy Briscoe and Deputy D. Breen both substantiate this account. Deputy Briscoe says that Mr. Summerfield was interested from the beginning and was very upset when they would not let this deal go forward with Mr. Harrison. Deputy Breen said that before Senator Comyn arrived Mr. Summerfield pressed Deputy Briscoe to accept the Heiser-Harrison arrangement. “Your 12,000 shares and 2¼ per cent. royalty,” Mr. Summerfield is alleged to have said, “are all right, and if you agree we will arrange to let your crowd have some of the £10,000 cash and a part of the 50,000 shares.” When Senator Comyn appeared Mr. Summerfield turned to him and said: “Why don’t you settle with Heiser?”
Asked if his refusal to consent to this arrangement had anything to do with the publicity given to the granting of the lease, Senator Comyn said: “No, I make no charge against anybody. I have told you what happened—Summerfield said to us, ‘You will hear about this’”
Mr. Summerfield’s Evidence.
Mr. Summerfield, in his evidence before the Committee, said he was not aware of Mr. Heiser’s going to London and making a bargain with Mr. Harrison. He knew nothing about it until he saw it in the evidence. It was news to him until early in July. He had nothing to do with the Wicklow Goldfields proposition. Mr. Heiser did come to him with a rough draft—& very rough draft. He did not take it seriously, and tore it to bits. In reply to his letter of the 29th June to the secretary of Risberget, the latter informed him on the 5th July that Wicklow Goldfields Ltd., was solely concerned with the lease of Messrs. Comyn and Briscoe. (Mr. Summerfield and others—the Irish Prospectors, Ltd.—had a number of applications of their own for leases.) Asked if he hoped to gain anything from the subsequent negotiations of Mr. Heiser, he said his attitude was somewhat the same as that of a man who invested a couple of hundred pounds in “sweep tickets.” Asked if he had pressed Messrs. Briscoe and Comyn to agree to accept Mr. Harrison’s proposals at the interview in which he was alleged to have said “You will hear more about this matter,” Mr. Summerfield said he did no pressing in the matter. He would not have any responsibility for it from beginning to end. Asked what was his answer to the statement made by Deputy Briscoe— “Summerfield tried to press us to agree to a proposal that Heiser had made with Harrison, and asked was it a case of our wanting a divide of their shares”—he replied: “I never suggested anything of the kind. That is a sheer fabrication.” “And that on that occasion he said we would hear more about it?”— “That again is an invention.” “It is not true?”— “It is certainly not true.”
So far the Committee have dealt, in this part of the Report, with the coming of Mr. Harrison and the repudiation by Deputy Briscoe and Senator Comyn of his £250,000 company, also with the examination of the draft prospectus (including its implications) which Mr. Harrison handed to Deputy Briscoe a month later. Their relations with Mr. Heiser had come to an end on the arrival of Mr. Harrison, according to Deputy Briscoe. As regards the present position, Senator Comyn stated that the Agreement provided they (Risberget) were to form a company within six months, and that period had now elapsed. Asked if the Agreement were voided, he replied that he would say so. But later he said that may be a matter of law. In so far as he was concerned, it was dead. To enable Messrs. Comyn and Briscoe to furnish returns to the Department their solicitor sent a communication asking the Risberget Company whether they were doing anything. Senator Comyn stated that they had sent no reply and their secretary told Senator Comyn that they would not reply. The licence given to Risberget was still unrevoked, nothing having been done pending the report of this Committee. Senator Comyn's view was that instead of working the deposit they, the Risberget people, thought it would be much better to try and float a company, and “we stopped them, thereby causing a deadlock.” Deputy Briscoe’s view was that the Bond would become payable to them at the expiration of six months from the 15th March, 1935, conditional upon default in the carrying out by Risberget of the obligations contained in Clause 6 of the Agreement and that the Agreement would come to an end on this event happening. The lawyers are discussing that now, he added.
Notwithstanding the repudiation of both Mr. Harrison and Mr. Heiser following the 26th May meeting, Messrs. McGrath & Son. Solicitors, Kildare Street, on the 8th July, wrote to Messrs. Briscoe and Comyn individually, enclosing to each a copy of a letter addressed to Mr. Heiser by Messrs. Harrison, Sugden & Co., on the 5th July. The letter of the 5th July is headed “Wicklow Goldfields”—“Proposed Public Issue.” It states that they (Harrison, Sugden & Co.) have considered the reports of Mr. Dunn and Professor Holman in connection with this proposition with a view to making a public issue in England, and, if he (Mr. Heiser) liked, in Ireland, for the dev elopement of these alluvial gold mining areas. They refer then to their having leases for only three townlands, but they understand that application has been made by Messrs. Comyn and Briscoe on Mr. Heiser’s behalf for six other adjoining townlands. In view of the fact that the reports of two mining engineers cover the larger area—the whole nine townlands—they suggested that Mr. Heiser, accompanied by Messrs. Briscoe and Comyn, should see the Free State Government for the purpose of getting leases for the six townlands. They said they felt confident that notwithstanding the present Commission of Inquiry, the Free State Government would not allow themselves to be influenced in dealing with these additional leases which are so urgently required if a public issue is to be made and these areas developed without delay. Messrs. McGrath & Son in their covering note say that in view of the terms of this letter they would feel obliged if Messrs. Comyn and Briscoe would now proceed with the application for the leases in pursuance of Clause 2 of the contract of 12th March, 1935. As there was no reply from Messrs. Comyn and Briscoe, Messrs. McGrath & Son wrote again on the 12th July asking if they had made application to the Minister for Industry and Commerce for his consent to the grant of the sub-lease and what steps they had taken for the completion of the lease of the six townlands. They also referred to the copy of the draft prospectus and said it was inaccurate and contained many errors, that it was not issued for publication and no value could be placed on its wording in its present form.
It was Mr. Summerfield who secured copies of these letters from Mr. Heiser and brought them to the knowledge of the Committee. Mr. Summerfield, when asked whether, from his knowledge of this entire transaction, and particularly from this letter of the 12th July, he thought that this proposal for a public company, a public issue of shares in this gold mine, had been dropped, say, on 9th July, replied that he did not think so. He thought he was fairly safe in saying that they (the lessees) knew all about Harrison and his proposals.
Deputy Briscoe on being recalled handed in a letter to himself from his solicitor. The letter, marked “personal,” for the publication of which privilege was waived, was dated 23rd July. It referred to an interview which his solicitor had with Messrs. MeGrath & Son the previous day. Deputy Briscoe’s solicitor mentioned to Mr. McGrath a number of points about the contract which were far from clear: (1) the fact that it was represented that there was £80,000 in cash and that there was to be no public flotation; (2) the fact that Mr. Heiser had not carried out Clause 6 and had not employed men to work on the site. Deputy Briscoe’s solicitor also pointed out (3) the ambiguity in the Agreement which in the first three clauses spoke of a lease to Risberget, Ltd., and in the succeeding clause speaks of “I”; (4) that £12,000 in shares in an £80,000 company was very different to £12,000 in shares in a £250,000 company. He went on to say that much could not be done until this inquiry had come to some decision. He pointed out that everything was vague and unsatisfactory. Mr. McGrath did not admit. He said (a) that Mr. Briscoe could never have thought that the full £80,000 was available in cash; (b) that the reference to the company having a capital of £80,000 meant only the paid-up capital; (c) that the Agreement clearly meant that the leases were to be made to the Risberget Company; and (d) he maintained that Mr. Heiser had instructed him that there were actually men engaged working on the site.
Allegation that the Minister’s Action in Granting the Lease was Improper.
Perhaps the most important section of the allegations of Deputy McGilligan is that containing his charges against the administration of this matter by the Minister for Industry and Commerce. The conduct of the latter is described by the Deputy in one place as being “scandalous,” in another as being “imprudent,” in another as being“tinged with political favouritism,”again as being “lax.” The Deputy, in using the word “scandal,” referred to well-known cases of alleged scandals in governmental circles in other countries, but he draws a clear distinction in one respect. In this context he uses the following words:—
“There are features of resemblance, but I want to point out that the word ‘corruption’ had one particular meaning in this country, and that is corruption in regard to money matters. I wish it to be understood that I do not use the word ‘corruption’ in that sense. I do not say that any Minister or member made money out of it, but I do say that there was a chance wrongfully given to a member of this House of making money.”
The Terms of Reference require this Committee to inquire whether the Minister’s action in granting the lease was “improper,” this being an allegation attributed to Deputy McGilligan. It is important to make clear the scope of this charge. Some passages taken from his evidence will serve this purpose best. The quotation just given clarifies the position in one respect. The Minister is not accused of financial corruption, but of committing a wrong by putting Members of the Oireachtas in a position to make profit for themselves. As regards the granting of the lease the Deputy’s charges have already been analysed. The charges now to be referred to appear to depend on events occurring after the grant was made. These events arouse such suspicion in his mind that doubt is reflected back to the circumstances surrounding the granting of the lease itself, and from this follows his criticism of the Departmental methods employed. Having said that he thinks the granting of the lease to be the minor part of the scandal, he says that it is to the Minister that he imputes this scandal. In answer to a question he says: “Remember my attitude is that the whole affair was scandalous, but particularly the trafficking in State property for the benefit of Members of the Oireachtas themselves. The civil servants had nothing to do with it.” Starting from this objection to “trafficking” in property entrusted to them by the State, he involves the Minister as follows:—
“With the cognisance of this trafficking, with the knowledge that Members of the Oireachtas were gaining, and particularly when it was put up to the Minister that they were to gain from a very suspicious concern, I think all that is scandalous.”
The receipt by the Department of the letter from the lessees dated 25th April, 1935, of which, incidentally, Deputy McGilligan could have known nothing until, by permission of the Committee, he was allowed to inspect it on the file, is regarded by the Deputy as proving the Minister’s cognisance of the “trafficking.” The last paragraph of this letter is the occasion when it was “put up to the Minister that they were to gain from a very suspicious concern”.
In his opening statement he says:—
“I certainly feel as a public representative that it is not controlling State property in the public interest to allow two people —I do not care who they are—in silence to get control of State property without giving evidence that they could work it, and seeing that there emerged, in a very short period, evidence of having trafficked that concession to an outside group of persons in exchange for 48,000 5/- shares...To my mind the whole thing is aggravated by the fact that the two people who have got the concession, and who have trafficked in it, are Members of the Oireachtas. It becomes especially and peculiarly aggravated by the fact that, apart from being Members of the Oireachtas, they belong to the Party that is the Government and is in power.”
The administration of the entire transaction, prior to and after the grant, is here charged with a failure to safeguard the interests of the public in the control of State property, and he stresses his view of the effect of these events when Members of the Legislature are involved, particularly members of the Minister’s political Party. With regard to “imprudence” on the part of the Minister, he says:—
“I do not know what his knowledge of these gentlemen was before they started off getting this lease, but it seemed to me that he displayed an extreme lack of prudence when he did not make inquiries. I thought it verged into something more than imprudence when, knowing what they proposed doing, he let their letters come into his office, let the mining unit be established in furtherance of the proposal for a sub-lease, and never sent a note of warning to any one of them that is was a thing which later would meet with his condemnation.”
In reply to a later question he repeats this charge, saying that it is a precise statement of his allegation: “When he (the Minister) knew that was intended, he did not tell these people he would not allow it. That is the big scandal.”
As illustrating a practical step that could have been taken against the lessees, he says:—
“I suggest that a person should look at the lease and see what power the Minister had, and it would then be seen that he could void it under the other three reasons I mentioned—no returns made, men not being employed, and the rent not paid.”
In respect of this he criticises the Department’s inaction as follows:—
“They (i.e., the lessees) set out to get a lease of three town-lands and they arranged to employ four men. They did not employ four men. They were to make returns. They did not. They were to pay a certain rent. They only did it when they were threatened with a solicitor’s letter. I do not call that normal.”
This statement was made in answer to the claim by the Assistant Secretary to the Department that no exceptional conduct was meted out in the case of this lease. Again on the same point he says:—
“I have got to generalise what has happened. That the normal procedure is that the Civil Service sends out a document asking questions apparently of some importance in regard to financial resources and technical capacity. They get what are, prima facie, unsatisfactory answers. They do not investigate these answers. They enter into a lease. They say themselves they do not consult the Minister about it. They impose three conditions in the lease and every one of the three conditions is broken within three months of the lease being signed, and they do not take any action. I say that if Mr. Ferguson takes that as his standard and says that it is normal, I have got to accept his view of what is normal in the Department, but I think that is a highly improper proceeding.”
These quotations establish that Deputy McGilligan considers the administrative methods were lax even to the end and blameworthy, and, drawing no distinction between civil servants and their Minister, he places the entire responsibility on the latter. This allegation of laxity is again emphasised in the sentence: “That more particularly, when he (the Minister) got information from them (i.e., the lessees) to say that the whole concern was, in the promoters’ view, so bad that no Irish capital ought to be allowed to go into it, he still kept silent and just casually let it go by, I say and I have always said that that was the special point that made this whole matter obnoxious”. He prefaces this statement by a remark that the whole thing is “chock full of politics”. His charges would appear to him to be “specially and clearly evidenced” by omissions, irregularities and abonormalities, which he alleges. Another statement of his is that “only political association with the Minister could justify the continuance of the lease under the conditions that developed to the latter’s knowledge.” Questioned on this matter of political association with the Minister, the Deputy shows the development of his views by saying “When speaking in the Dáil—it was not so clear to me then as it is now— I did keep myself almost definitely confined to an attack upon the lessees, and, secondly, I joined up with the Minister because of his failure to act when certain matters were made known.”
Finally, his reply to the next question is: “I am definitely of opinion that the whole matter is coloured by politics. It took that turn and politics more and more crept in, which I consider was a bad turn.”
Minister’s Defence to Allegation that his Action was Improper.
In defending himself against this attack the Minister takes a view of the matter from an angle showing very little in common with Deputy McGilligan. Thus he is definite that the granting of this lease was a routine matter implementing his general policy and that there was nothing out of the ordinary requiring the case to be brought to him. He thinks that there is nothing abnormal or improper in giving a lease under the Mines and Minerals Act to members of his own Party in the Oireachtas. He says that he is convinced that Senator Comyn and Deputy Briscoe, being honourable men, would have nothing to do with a “dud” proposition. In several replies he states that he takes no sinister meaning from the last paragraph of the letter of the 25th April. He was questioned as to whether that paragraph put him on his guard or conveyed a warning, and replied that it did not bear that interpretation. The interpretation put on the paragraph in question by Deputy McGilligan is, the Minister thinks, an extraordinary one. He (the Minister) was, however, put on his “guard because of the terms of the letter where the lessees pointed to the danger of applications for leases for adjoining areas with the intention of floating bogus companies.” He considered that the applicants were, in the last paragraph, merely putting forward a reason why he should not insist upon a majority of Saorstát capital in the proposed Company. The letter was lodged in his Department on request of one of the officers merely for information. It was not an application and no action by him was required:—
“Immediate action would be very precipitate. It would be obviously our duty to await the formal application for a sub-lease in the first instance and then at that stage get all the information which we considered necessary. Any proposal to proceed with the Company could not be given effect to until not merely had the sub-lease been agreed to, but until the main lease had been issued and the Control of Manufactures Act licence had been issued, and that would not arise for some two years to come.”
This reply coincides with one already given. It contrasts with the claim made by Deputy McGilligan that, having been made aware of “trafficking” by Members of the Oireachtas, especially belonging to his own Party, his duty was to issue a stern warning at once. The Minister’s retort is that the letter required him to do nothing, nor was the time ripe, owing to the necessity of awaiting the fulfilment of various preliminaries, for action on his part. In regard to the Deputy’s charge of dereliction from duty in not warning the lessees, he says: “I am not aware of what the dereliction from duty is.”
As regards the alleged non-fulfilment of the covenants of the lease, he was questioned as to why he did not inquire into that matter when it was brought to his knowledge that the rent and costs were not paid and that legal proceedings appeared to be necessary, and he replies:—
“If the responsible officer of the Department found that the covenants of the lease had been violated in a manner sufficiently grave to justify voidance of the lease the matter would have been referred to me.”
And he add:—
“If the rent had not been paid and legal proceedings became necessary the circumstances might have been different. In fact, the rent was paid before the instruction I had given could be acted upon.”
In fact, the question did not arise and the Departmental officers did not consider it necessary to report to him on the subject. Thus he argues that he had not sufficient justification for voiding the lease.
He denies having exercised influence on Departmental officers, in some manner other than by writing to them or speaking to them, so as to induce them to act irregularly. He says that this allegation is ridiculous and points out that it has been categorically denied by every officer of the Department. He did not know of the application for, or the issue of, the lease. He never discussed the question of granting the lease with Senator Comyn and Deputy Briscoe.
Department’s Reply to Allegations Relating to the Period Following Lease.
The reply of the Department to the allegations of Deputy McGilligan in respect of the period subsequent to the grant of the lease, particularly directed against them, was that they intended to enforce the covenants of the lease, and were making use of the machinery provided by the Mines and Minerals Act for the enforcing of these covenants. The machinery prescribed under Section 16 of that Act was a six months’ statutory return, with a penalty attached, which was intended to cover the general covenants of the lease. The Act did not make any provision for sending down inspectors to see whether the covenants were being fulfilled, but if on the examination of the return furnished there were any need to pursue the parties concerned to make sure that the information was correct, or if there were any doubts about it, the Department would take whatever steps they thought fit to deal with the matter. The return referred to for the six months ending the 30th April had come in on the 13th June. The Department had begun to examine it, but the proceedings were interrupted by the setting up of this Committee.
Apart from the statutory return referred to, covenants were inserted in the lease providing for two further returns, one a monthly return, and the other a six-monthly return. Both these latter returns were concerned with production only.
The Department state that they had frequent correspondence with the lessees in reference to the monthly report, and there were quite a number in arrears. Mr. Ferguson stated that the Department’s practice in the first six months of a prospecting lease was to allow the parties concerned to get into their stride, so to speak, and not to expect a return in too short a period. It was not their policy to embarrass the prospectors at such an early period.
The Department stated also that the dead rent and costs had been outstanding, that the taking of legal proceedings in connection with the matter was considered, and that the sum due was eventually paid. They did not draw any unfavourable conclusion from the incident. Mr. Maguire’s comment on it was there was difficulty in getting one payment, they did not know whether there would be difficulty in getting another. They admitted that they were surprised by the failure of the lessees to meet these claims, the more so in view of the fact that they had accepted without inquiry the financial standing of the lessees and placed reliance on them to expend any sums that might be necessary to carry out the covenants of the lease. The fact of their readiness to institute legal proceedings against the lessees for these amounts is claimed by the Department representatives to disprove the charge of political favouritism.
The Department consider that they have done their whole duty under the Act, and that up to the period of the setting up of this Committee they had no case for taking steps to cancel the lease on the ground of non-fulfilment of the covenants.
Findings of the Committee.
It will be observed from statements contained in this Report that Deputy McGilligan denied that he made allegations of the purport contained in paragraphs (a), (b) and (c) of the Terms of Reference. It does not appear to us that we are required by the Terms of Reference to adjudicate on whether, having regard to the Deputy’s denials before the Committee, the allegations were, in fact, made. We, therefore, propose to confine our report to the questions addressed to us in the Terms of Reference.
1. Evidence was given on oath by the Secretary to the Department of Industry and Commerce, the Assistant Secretary to the Department and other officials who dealt with the application of Senator Comyn and Deputy Briscoe that the application was dealt with in the first instance by civil servants as a matter of official routine, that the decision to grant the lease was taken by civil servants in the Department, that the lease was sealed by the Secretary of the Department, and that from the date of the application until the granting of the lease the whole matter was dealt with by officers of the Department without any instruction from the Minister. Officials of the Department who gave evidence before the Committee stated that they were not influenced in any decisions they took by any instructions, hint or intimation of any kind from the Minister to grant the lease or to give special consideration to the applicants in any respect.
2. In view of the evidence submitted to us we can find nothing to sustain an allegation that the take note or prospecting lease to Senator Comyn and Deputy Briscoe was in any way due to their being political associates of the Minister.
3. With regard to the question as to whether the grant of the take note or prospecting lease was made under conditions of secrecy, we have inspected all the official documents relating to the transaction and observed that a substantial number of officials not only dealt with the application but had access to the files in the Department. The Mines and Minerals Act, 1931, provides that a take note or prospecting lease may be granted for a term not exceeding two years, and if such a take note or prospecting lease is granted there is no obligation to lay the lease so granted on the Table of both Houses of the Oireachtas. We were informed by the officials of the Department who gave evidence to the Committee that the lease granted in this instance was dealt with in the same way as other applications for leases and we are satisfied that it complied with the relative section of the Act referred to.
4. As we have already stated, the full correspondence relating to the application for a take note or prospecting lease was made available to us by the Department of Industry and Commerce. This correspondence was carefully scrutinised by the Committee and a number of official witnesses examined in connection with previous applications for a take note or prospecting lease of the lands concerned. We are satisfied that no other party was seeking a demise of the same rights at the time they were granted to Senator Comyn and Deputy Briscoe and no evidence was submitted to us that more advantageous terms could have been secured by the State for the demise of the Mining Rights at the time the prospecting lease in respect of them was granted to Senator Comyn and Deputy Briscoe.
It does not appear that an advertisement inviting applications for the grant of the lease was inserted in any newspaper and when questioned on the matter the Assistant-Secretary of the Department of Industry and Commerce stated that it was not part of their statutory duties nor was it their practice, to advertise in such cases.
5. In view of these facts we can find no ground to sustain an allegation that the action of the Minister in making such a demise under the terms of the Mines and Minerals Act, 1931, was improper.
6. The circumstances surrounding the grant of the lease were referred to at length in the course of the evidence given to the Committee and are summarised in this report.
7. It will be observed that subsequent to the grant of the lease and following a claim by the lessees that gold and other precious metals had been found in the area covered by the prospecting lease, an Agreement was entered into by the lessees with Mr. Heiser, who claimed to be acting for a foreign syndicate, whereby the latter undertook to float a company with a capital of £80,000 to exploit the deposit, and the Agreement provided that the lessees were to receive a royalty of 6¼ per cent. on all minerals found and shares to the value of £12,000 in the proposed company, the capital for which was to be raised by a financial group operating outside this country. Subsequently, it transpired that Mr. Heiser, who had entered into this arrangement with the lessees, sought, on the basis of the rights which he had obtained under the Agreement to dispose of his interest in the lease for shares to the value of £52,000 in a company with a capital of £250,000 which he was endeavouring to promote, together with, as the prospectus of the proposed company indicated, a sum of £10,000 in cash. Senator Comyn and Deputy Briscoe stated that they were unaware that Mr. Heiser was promoting such a company and that they repudiated his action when they became aware of it. It would appear that Mr. Heiser intended to fulfil his portion of the Agreement to allocate £12,000 in shares to Senator Comyn and Deputy Briscoe from the block of shares amounting to £52,000 which he was to secure in the subsequent company which he was endeavouring to float—the balance presumably being retained by himself and his associates as their portion of the profits of floating the company. This instance of selling mining rights for large sums of money illustrates the dangers to the public and the State, which are inherent in company-promoting and share-pushing, especially in the exploitation of a mineral such as gold, which in other countries has proved to be a fertile excuse for company-promoting with unpleasant result for honest shareholders.
8. We cannot too strongly emphasise the necessity in the public interest to guard against such undesirable speculation in the case of mining leases granted by the State, and we are gravely perturbed by the Agreement made by the lessees in this instance whereby a sum of £80,000 was to be raised by a foreign syndicate in a manner unknown to us, but judging by the subsequent actions of the other party to the Agreement in circumstances that give grounds for the gravest concern.
9. To avoid the possibility of a recurrence we consider that steps should be taken to ensure that more rigid control is exercised by the State over leases issued by it in respect of mining rights so as to provide safeguards against such leases being used for the flotation of companies with a problematical future and in which the element of gambling in shares is capable of undermining public confidence and exposing individual members of the public to severe financial losses.
10. While we recognise that the lease granted in this instance to Senator Comyn and Deputy Briscoe fully complies with the terms of the Mines and Minerals Act, we think that in future leases granted to members of the Oireachtas should be for such a period as would require the lease to be laid on the Table of the two Houses of the Oireachtas.
11. Without expressing an opinion on the legal aspect of the question, the Committee think it would be desirable that leases under the Mines and Minerals Act, 1931, should be under the hand of the Minister as well as under the seal of the Department.
(Signed), WILLIAM NORTON,
20th May, 1936.