RAILWAYS COMMITTEE (REPORT OF THE), ON THE PETITION OF THE WESTPORT-CARDIFF COAL COMPANY (LIMITED); TOGETHER WITH MINUTES OF PROCEEDINGS AND EVIDENCE, AND APPENDIX.

Appendix to the Journals of the House of Representatives, 1894 Session I, I-09

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1894. NEW ZEALAND.

RAILWAYS COMMITTEE (REPORT OF THE), ON THE PETITION OF THE WESTPORT-CARDIFF COAL COMPANY (LIMITED); TOGETHER WITH MINUTES OF PROCEEDINGS AND EVIDENCE, AND APPENDIX.

Beport brought up 31st August, 1894, and ordered to be printed.

ORDERS OF REFERENCE. Extracts from the Journals of the House of Representatives. Tuesday, the 3rd day of July, 1894. Ordered, " That a Committee, consisting of twelve members, be appointed to examine into, and report upon such questions relating to the construction and working of the railways as they may think desirable, with power to call for persons and papers ; five to be a quorum. The Committee to consist of Mr. Crowther, Mr. Duncan, Mr. Earnshaw, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Massey, Hon. Mr. Mitchelson, Mr. Morrison, Mr. G. W. Russell, Hon. Sir R. Stout, and the mover." —(Hon. Mr. Seddon.)

Wednesday, the 25th day of July, 1894. Ordered, " That the names of Mr. Tanner and Mr. Wilson be added to the Railways Committee."—(Mr. Pirani.)

Wednesday, the Ist day of August, 1894. Ordered, "That the petition of the Westport-Cardiff Coal Company (Limited), be referred to the Railways Committee, and that they be directed to report thereon within one week."—(Mr. Guinness.)

Thursday, the 9th day of August, 1894. Ordered, " That the Railways Committee have leave to ait during the sitting hours of the House ; also, that the time for bringing up a report on the petition of the Westport-Cardiff Coal Company be extended for one week."— (Mr. G. W. Russell.)

Wednesday, the 29th day of August, 1894. Ordered, "That the name of the Hon. Mr. Larnach be added to the Railways Committee."—(Hon. Mr. Sbddon.)

REPOET ON THE PETITION OF THE WESTPG-ET-CAEDIFF COAL COMPANY (LIMITED). 1. The Committee finds that the petitioners had the assurance of the Minister of Mines that cheap railway freights would be arranged. It was subsequently discovered that this assurance could not be given effect to, owing to the right of appeal to the Governor in Council not applying as it was supposed. 2. The Mokihinui line was originally isolated, and practically of little value, until £36,000 of public money (the fund of the Westport Harbour Board) was spent in extending the line from Ngakawau to Mokihinui. The petitioners are, as coal-area lessees in the district, liable for part of the interest at 5 per centum on this sum of £36,000 ; and it is in evidence that the petitioners are liable to a considerable sum (£459) on account of deficiency this year. 3. The value of the portion of the line to be used by the Westport-Cardiff Company your Committee estimate (on the evidence) at not more than £8,000, this being a very liberal estimate of the cost of construction; and as the Mokihinui Company is by its lease compelled to put out 30,000 tons of the coal for this year, while the Westport-Cardiff Company is required to put out only 10,000 tons, your Committee consider that if the petitioners pay half the interest on £8,000 at 7 per cent, they should be entitled to " way-leave " for whatever coal they desire to haul over the line. 4. That the Cardiff Company pay one-half the annual cost of maintenance of the portion of the line used by them, after deducting from the total receipts for public traffic the same proportion that the section of line common to both companies bears to the total length. 5. The Committee also consider that the haulage rates to both the Mokihinui and WestportCardiff Companies' mines are excessive, and should be reduced by Id. per ton. I—l. 0.

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6. That the Committee recommends that the present contract be annulled, for the purpose of making a new agreement, such fresh agreement being consistent with the views of the Committee as herein expressed. 7. The Committee, however, consider that the fact that the Mokihinui Company's line is connected with the Government line, and lies between the coal district of Mokihinui and Westport, renders it desirable that the Government should negotiate for the purchase of that branch—the purchase-money to come from the funds of the Westport Harbour Board, and to be dealt with in the same way as the £36,000 spent on the extension of the line from Ngakawau to Mokihinui. G. W. Eussell, Chairman. 31st August, 1894.

FUETHEE EEPOET. I am directed to report that the Eailways Committee recommend that the minutes of evidence, the minutes of proceedings, and the correspondence dealing with the above petition be printed. G. W. Russell. sth September, 1894.

PETITION, ETC. To the Honourable the Speaker and Members of the House of Bepresentatives of New Zealand in Parliament assembled. The petition of the Westpoht-Cabdiff Coal Company (Limited), incorporated under "The Companies Act, 1882," and of William Henry Hargbeaves, a shareholder, and Chairman of the Board of Directors of the said company, showeth— 1. That your petitioners are the holders of a coal-mining lease from Her Majesty the Queen, under " The Westland and Nelson Coalfields Administration Act, 1877," dated the 10th day of March, 1893. 2. That your petitioners have fulfilled their obligations under the said lease, and, in addition thereto, have expended upwards of £7,000, besides incurring further liabilities amounting in all to upwards of £22,000, for the completion of railway, tramways, sidings, coal-bins, and opening-up of the mine, which is now in working order. 3. That your petitioners and the " Mokihinui Coal Company (Limited) " are the only holders of coal-mining leases in the district; that the Mokihinui Coal Company are also owners of a railway, extending from their coal-mine to the Government Eailway-station at Mokihinui, a total length of 3 miles 68 chains ; that this railway was originally constructed without any legal authority, for the purpose of enabling that company to ship their coal from their wharf on the Mokihinui River — a purpose which has entirely failed of its object; and, but for the construction of the link-line from Ngakawau to Mokihinui, at a cost of upwards of £36,000, this company's line would have remained as it was, utterly valueless. 4. That your petitioners' branch railway joins the Mokihinui Company's line at a point 1 mile 22 chains distant from the Government station at Mokihinui, and that your petitioners' coal must be passed over the said 1 mile 22 chains of the Mokihinui Company's railway to reach the Government line. 5. That the total distance for haulage purposes from your petitioners' coal-bins to Mokihinui Station is 1 mile 40 chains, consisting of 18 chains of your petitioners' railway, and 1 mile 22 chains of the Mokihinui Company's railway. 6. That, before incurring any responsibility in the way of expenditure or liability, your petitioners endeavoured to get the haulage-rate over the said section of 1 mile 22 chains of the Mokihinui Coal Company's railway definitely fixed, and to ascertain whether they incurred any risk in connection therewith. Your petitioners were unable to get the rates fixed, but were assured by the Government that the haulage would be a uniform through mileage rate from their mine to Westport, fixed in accordance with the rates prevailing on the Westport Section, and that your petitioners would not be placed at a disadvantage as regards haulage on their coal. 7. That relying upon this assurance your petitioners have opened their mine, completed their works, filled their bins, and have been ready to send coal to the market for upwards of two months. 8. That, in addition to the obligations for rental and royalty under their lease, your petitioners are liable under " The Westport-Ngakawau Eailway Extension Act, 1890, ' for part-payment, over and above working expenses of the said line, of £5 per centum per annum on the entire cost of the said railway, amounting at present to upwards of £36,000. 9. That the New Zealand Eailway Commissioners having taken running-powers over the Mokihinui Coal Company's railway, under an Order in Council dated 7th May, 1894, your petitioners applied to them to fix the rates for haulage of their coal from their bins to Westport. The Commissioners replied by letter, dated 4th June, 1894, an extract from which is as follows, viz., : — " That the Eailway Commissioners have come to an agreement with the Mokihinui Railway Company, under which the company's line will be worked by the Commissioners, and the following rates will be charged for the carriage of coal from the Cardiff Company's mine to the Mokihinui Station, namely : Up to 15,000 tons per annum, Is. 4d. per ton; all over 15,000tons per annum, Is. 3d. per ton. The minimum charge to your company will be as for 10,000 tons per annum, whether such quantity be carried or not, and any deficiency in the proportionate quantity hauled at the end of each four-weekly accounting period must be paid by your company."

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10. That your petitioners replied to the Commissioners by letters dated 7th and 13th June, 1894, respectively, objecting to the excessive rates imposed on their coal, and setting forth their reasons against such imposition, and requesting a reconsideration of the Commissioners' decision. 11. That no reply having been received on the 18th July, your petitioners' Chairman interviewed the Commissioners in Wellington on the question of the reconsideration of the proposed rates, and, at another interview on the 20th of July, the Commissioners made to him the following verbal modification of their original proposals—viz.: That the charges for the carriage of your petitioners' coal from their mine to Mokihinui Station would be Is. 3d. per ton on the first 10,000 ; after the first 10,000, and up to 15,000, 9d. per ton ;on all over 15,000, 6d. per ton. These charges only to be levied on the actual output, and include in all cases 3d. per ton haulage, to be paid to the Commissioners ; the balance to be paid through the Commissioners to the Mokihinui Coal Company for the use of 1 mile 22 chains of their railway. These proposals were also declined byyour petitioners by letter dated the 21st July. 12. That on the 24th July, your petitioners' Chairman made the following definite proposals to the Commissioners :— (1.) As to charge for "way-leave": To value the section of line to be used by my company at £10,000, we to pay half the amount of interest on that sum at 7 per cent, per annum, without bringing into account the proportion of earnings from goods- and passenger-traffic. For this sum or payment, "way-leave" to be given to us by the Mokihinui Company for passage of our coal to the extent of 50,000 tons for the year, and, for all over that quantity, to pay .the Mokihinui Company one halfpenny per ton. (2.) With regard to haulage : The Commissioners to charge a through rate from our bins to Westport on the present tariff in force on the Westport Section—namely, Is. lOd. per ton for the first eight miles, and three-farthings per ton for the remaining mileage. (3.) The agreement to remain in force for twelve months, and thereafter to be subject to revision. The Commissioners declined this proposal by letter dated 29th July. 13.. That your petitioners thereupon appealed to his Excellency the Governor, under section 4 of "The Westland and Nelson Coalfields Administration Act Amendment Act, 1892," but have been informed by the Government that the Crown Law Officers advise that your petitioners have no right of appeal to his Excellency against the decision of the said Commissioners. 14. That the charges fixed by the said Commissioners are out of all proportion to those levied on the coal of other companies served by the Westport Section of the New Zealand Eailways and its branches, and bear most unjustly on your petitioners and their business. As an illustration of the injustice complained of, the Commissioners impose a charge of Is. 3d. per ton for the carriage of your petitioners' coal a distance of lmile 40 chains, while they charge the Westport Coal Company only one penny per ton for haulage of their coal a distance of 1 mile 56 chains, and refund one halfpenny per ton to the Westport Coal Company for " way-leave." As a further illustration of such injustice, while the Commissioners have fixed the rate to be paid to them by the Mokihinui Company for haulage of their coal over the entire length of that company's line, a distance of 3 miles 68 chains, at fivepence per ton, or one penny farthing per mile, they have imposed a charge of threepence per ton for haulage of your petitioners' coal a distance of 1 mile 40 chains on the same line. In addition to the said charge of threepence per ton for haulage, the Commissioners have levied Is. per ton on your petitioners' coal for " way-leave " over the aforesaid length of 1 mile 22 chains of the Mokihinui Company's line so to be used by your petitioners, the whole of which is to be paid to the said company. Your petitioners therefore humbly pray that your honourable House will inquire into the manner in which the Commissioners of the New Zealand Eailways have exercised their powers, and fixed the charges to be paid for the carriage of coal, goods, and passengers on and over the Mokihinui Coal Company's railway hereinbefore referred to; and, further, that your honourable House will take the matters alleged in this petition into its favourable consideration, and either give your petitioners a right of appeal against the decision of the said Commissioners, or cause the said haulage-rates and other charges to be revised and fixed by analogy to the charges ruling on the Waimangaroa Branch of the Westport Section. And your petitioners will ever pray. Sealed with the seal of the Westport-Cardiff Coal Company (Limited). W. H. Habgeeaves, Chairman.

EEPOET OF THE BAIL WAY COMMISSIONEES UPON THE PETITION OF THE WESTPOET-CABDIFF COAL COMPANY. New Zealand Government Eailways, Head Office, Wellington, Sib,— 6th August, 1894. With reference to the petition of Mr. W. H. Hargreaves, Chairman of the WestportCardiff Coal Company (herewith returned), the Commissioners have to remark that, in fixing the terms-on which the Cardiff Company should have the use of the Mokihinui Coal Company's private railway-line for the first twelve months, they considered that as a branch railway from each mine to connect with the Government railway to Westport was as necessary an adjunct in each case to developing the respective mines as any other expenditure in which capital had to be sunk, that it would be only reasonable that each company should be deemed equally responsible for the interest on the capital sunk in that portion of the line common to both.:

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The Legislature, in "The Westport-Ngakawau Bailway Extension Act, 1890," affirmed the Same principle of a common interest in that extension, by enacting that the coal lessees would have to make up any deficiency in revenue to 5 per cent, profit on the capital cost, the contribution to be on the proportion of the acreage of the leases. This means that in respect of that line the Cardiff Company are liable for a somewhat greater contribution than the Mokibinui Company. The Commissioners, however, in the matter of the use of the private line, sought to arrange the contribution of interest on capital cost from each company on an equal basis, as already mentioned. The Mokihinui Company, in reply to the Commissioners' request for a statement of the cost of construction of that portion of their line to be used by the Cardiff Company, gave the actual expenditure at £16,500, with a probable further outlay of £500 on a bluff. Further, that, as their right to the railway is concurrent with one of their coal leases, expiring in thirty-three years from Ist July last, an annual sinking fund has to be provided as against the capital expended. From the agreement (copy herewith) it will be seen, also, that the Mokihinui Company have " to bear the cost of removal of slips, new materials for renewal of permanent-way, and of maintenance of structures." As the line is over a very broken country, and there is a tunnel, several bridges, and cuttings round bluffs, the cost of maintenance will be heavy. Under these circumstances, the Commissioners assumed that, if, say, £15,000 were taken as the capital cost of the line, the interest on that amount, at 7 per cent., the rate the Mokihinui Company is paying on their debentures —the annual interest on capital would be £1,050, or £525 for each company on 10,000 tons, the minimum annual output in terms of the Cardiff Company's lease : the interest would thus be very nearly Is. Id. a ton. Then, as against the sinking fund and maintenance, it was considered that the toll of Is. Id. a ton should be levied up to 15,000 tons, and, for every ton over 15,000 tons, Is. a ton ; but, as the Commissioners did not consider that it was probable that more than 15,000 tons would be sent over the line during the first twelve months of the Cardiff Company's operation, and, as the agreement was only for that period, their computations were made on that basis accordingly. The haulage charge of 3d. a ton includes shunting at the Cardiff Company's siding and at the sidings at Mokihinui Station, a service which could not be performed by the company itself, as is sometimes done in similar cases, unless at a greatly increased cost. The modified proposal as to the Cardiff Company's contribution towards interest on capital cost of line, to which Mr. Hargreaves refers in clause 11 of his petition, arose as follows: The Mokihinui Company, it was found on inquiry, had included the cost of wharf in their statement of cost of line. This charge, of over £500, the Commissioners considered should not be included in the capital cost as against the Cardiff Company. Further, Mr. Hargreaves assured the Commissioners that it was probable bis company would have an output of 30,000 tons the first twelve months, or for certain, say, 20,000 tons. On these grounds the Commissioners agreed to the modified proposal, subject, of course, to the Mokihinui Company's consent, to vary the agreement entered into on the 11th June last. In clause 14 Mr. Hargreaves refers to the charges on the Waimangaroa Branch. This line is 1 mile 50 chains long, and originally the 1 mile 11 chains next the Government line belonged to the Wellington Coal Company, the balance of 39 chains belonging to the Westport Coal Company. The Wellington Company's portion cost about £5,000. The Westport Coal Company were charged Is. 3d. per ton for the haulage over the 1 mile 50 chains, of which 6d. went to the Wellington Company for the use of their line, and 9d. to the Government for haulage. Subsequently, as the traffic increased, the tonnage rate was reduced, and later on the contribution by the Westport Coal Company to a neighbouring private company towards interest on capital cost ceased on their purchasing the mile of private railway. The line is now almost entirely occupied by their extensive coal traffic, but is worked by the Commissioners. The petitioner's statement in clause 14, that a refund of one halfpenny per ton is made to the Westport Company is inaccurate. In conclusion, the Commissioners think it but right to state to the Committee their decided conviction that, instead of the Cardiff Company making complaint of the proposed terms for the use of the Mokihinui Company's line for the first twelve months of their output, the company should consider itself specially fortunate in having its mine ready for output of coal on so small an expenditure of capital, none of which has had to be sunk in expensive connection with the Government railway-lines, as in the case of the Mokihinui Company, the Westport Company, the Black Ball, the Coal Creek, and the principal brown-coal collieries of the Middle Island, all of which have each sunk thousands of pounds in making connection ; while the Cardiff Company, with the exception of a few chains of line at its bins, has had no. such outlay, and is now to have the advantage of the Mokihinui Company's outlay on terms greatly more advantageous than it could possibly have had should it have been under the necessity of making its own connection and bearing the sole cost of the same, as has had to be done in the cases already quoted. I have, &c, E. G. Pilchee, Secretary. The Chairman, Eailways Committee, House of Eepresentatives.

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3tQ£££lit tilt with Mokihinui Coal Company for Working Extension of Railway from MOKIHINUI. UUlTUXTiUtbltlTt of Agreement made and entered into between the New Zealand Eailway Commissioners, incorporated under an Act of the General Assembly of New Zealand intituled " The Government Railways Act, 1887 " (who are hereinafter referred to as " the Commissioners "), and the Mokihinui Coal Company (Limited), a company duly incorporated under " The Companies Act, 1880," which said company, with its successors and assigns, is hereinafter referred to as " the Company," for the conveyance of passengers, parcels, and goods over the Company's line, in exercise and pursuance of the fourth section of " The Westland and Nelson Coalfields Administration Act 1877 Amendment Act, 1892," and of all other powers enabling them in this behalf. 1. For the purposes of this agreement the Company's line of railway shall be deemed to commence at the terminus of the Government Eailway at Mokihinui, and to terminate at the Company's coal-bins on the same line of the Company's railway. 2. The Commissioners shall provide all motive-power, rolling-stock, and labour for working traffic over the Company's line. 3. The Commissioners shall keep the rails in good order and to the correct level. 4. The Company shall bear the cost of removal of slips, new materials for renewal of permanent way, and of maintenance of structures. 5. For coal from the Company's mine hauled over the Company's line, the Commissioners to receive sd. per ton. 6. For coal from the Westport-Cardiff Coal Company's mine hauled over the Company's line, the Company to receive Is. Id. for every ton up to 15,000 tons per annum, and Is. per ton for every ton over 15,000 tons per annum. 7. For passengers and goods not otherwise specified, hauled over the Company's line, the charges to be :— a. d. Passengers, each... ... ... ... ... ... ... 1 0 Goods (not otherwise specified herein), per ton ... ... ... 3 0 Minimum charge... ... ... ... ... ... ... 0 6 Sheep per head (with a minimum of twenty)... ... ... ... 0 2 Cattle, per head ... ... ... ... ... ... ... 2 6 These charges to be divided equally between the Commissioners and the Company. 8. The Commissioners will collect all charges as per this agreement for haulage of traffic over the Company's line. 9. Passengers and goods will be conveyed over the Company's line subject to the gazetted regulations on the New Zealand Government Eailways. 10. The Company shall be responsible for payment for all damages or losses to persons or property occurring on the Company's railway, unless such damage or loss is clearly traceable to the negligence or error of any of the Commissioners' servants, or to the defect of any of the Commissioners' stock or appliances. 11. The Commissioners shall cause the accounts for traffic over the Company's line to be compiled for each four weeks, or thereabouts, in accordance with the practice on the New Zealand Government Eailways, and shall make cash payment of charges due to the Company within four weeks after the close of each accounting period. 12. Demurrage for all wagons detained on the Company's line will be charged as per scale of charges in force on the New Zealand Government Eailways, except for wagons for the WestportCardiff Coal Company, demurrage for which will be collected from the Westport-Cardiff Coal Company. 13. The Company shall be responsible for all damage (ordinary wear and tear excepted) to the Commissioners' rolling-stock while on the Company's line, except for such rolling-stock as may be damaged while in the Wesport-Cardiff Coal Company's siding, for which the .Westport-Cardiff Coal Company will be held responsible. 14. This argreement shall come into force on June 11th, 1894, and shall remain in force twelve months from that date. Signed on behalf of the Mokihinui Coal ) J. E. Blair. , , Company (Limited) j Thomas Eoskruge. *- l" '' The common seal' of the New Zealand "j James McKerrow. Eailway Commissioners was here- [ T. Eonayne. (1.5.) unto affixed this twenty-sixth day f John L. Scott. of June, in the presence of j

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MINUTES OF PROCEEDINGS.

(Note. —Mr. G. W. Bussell was at the first meeting of the Committee appointed Chairman.) Fbiday, 3kd August, 1894. Present: Mr. Crowther, Mr. Duncan, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Morrison, Mr. Eussell, Hon. Mr. Seddon, Mr. Tanner, and Mr. Wilson. Minutes of the previous meeting read and confirmed. Order of reference of Ist August read. The letter from the Chairman to the Eailway Commissioners, enclosing the petition for report, was read by the Clerk. Resolved, on the motion of Mr. Duncan, That the petition and the report thereon from the Eailway Commissioners be printed. Resolved, on the motion of the Hon. Mr. Seddon, That the correspondence relating to the matter in the possession of the Government and of the Eailway Commissioners be printed. Resolved, on the motion of Mr. Tanner, That the further consideration of the petition be postponed until Tuesday next, at 11 o'clock; and that the Eailway Commissioners and the Mokihinui Coal Company be informed. The Committee then adjourned until Tuesday next, at 11 o'clock.

Tuesday, 7th August, 1894. Present : Mr. Crowther, Mr. Duncan, Mr. Earnshaw, Mr. Platman, Mr. Lawry, Mr. Mackintosh, Mr. Eussell, and Hon. Mr. Seddon. Minutes of the previous meeting read and confirmed. Besolved, on the motion of Mr. Earnshaw, That the witnesses be allowed to be present while the petition was being dealt with. The Hon. Mr. Hislop, solicitor, attended, and asked to be allowed to appear before the Committee to watch the proceedings as representing the Mokihinui Coal Company (Limited). Besolved, on the motion of Mr. Duncan, That the Hon. Mr. Hislop be allowed to be present during the hearing of the petition. Mr. McKerrow, Chief Commissioner of Eailways, the Hon. Mr. Hislop, Mr. Guinness, M.H.E., Mr. Tiddy, Secretary Mokihinui Coal Company (Limited), and Mr. Broome, Engineer of Cardiff Coal Company (Limited), attended the Committee. The Chairman mentioned that the report was received from the Eailway Commissioners yesterday, and was at once sent to the printer. The petition and report were then read by the Clerk, also a telegram from Mr. Hargreaves, Chairman of the Westport-Cardiff Coal Company; and also the Chairman of the Committee's reply thereto. After some discussion as to the printing of the correspondence relating to the petition, Mr. McKerrow undertook to have all the necessary correspondence printed, and to supply the Committee with a map of the locality of the coal-mine. On the motion of Mr. Lawry, the further consideration of the petition was adjourned until Thursday next, at 11 o'clock. The Committee then adjourned until Wednesday next, at 11 o'clock.

Wednesday, 9th August, 1894. Present: Mr. Crowther, Mr. Duncan, Mr. Earnshaw, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Morrison, Mr. Eussell, Hon. Mr. Seddon, Hon. Sir E. Stout, Mr. Tanner, and Mr. Wilson. Minutes of the previous meeting read and confirmed. Mr. McKerrow, Mr. Guinness, M.H.8., Mr. Hargreaves, Chairman of the company, Mr. Broome, the Hon. Mr. Hislop, and Mr. Tiddy attended the meeting. Mr. Guinness made a statement, which was taken down by the reporter. Mr. W. H. Hargreaves, Chairman of the Westport-Cardiff Coal Company, made a statement which was taken down by the reporter. Resolved, on the motion of Mr. Duncan, That the Committee adjourn until three o'clock this afternoon, and that the Chairman move in the House for an extension of time of one week to bring up the report, and that he ask leave for the Committee to sit during the sitting of the House. Upon resuming at three o'clock the Chairman stated he had obtained leave for the Committee to sit during the sitting of the House. Mr. Hargreaves continued his statement. At five o'clock p.m. the Committee adjourned until to-morrow, at 10.30 o'clock.

Fbiday, 10th August, 1894. Present: Mr. Oowther, Mr. Duncan, Mr. Earnshaw, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Morrison, Mr. Eussell, Hon. Mr. Seddon, and Hon. Sir E. Stout. Minutes of the previous meeting read and confirmed. Order of reference of 9th August read. Messrs. McKerrow, Broome, Hargreaves, Guinness, Hislop, Tiddy, James Fulton, Engineer of Manawatu Eailway Company; J. A. Wilson, Eesident Engineer, Public Works Department; H. J. H. Blow, Under-Secretary, Public Works Department; and Mr. E. McKenzie, M.H.E., attended the Committee.

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Mr. Hargreaves made a further statement, which was taken down by the reporter. At 12.30 p.m. the Committee adjourned until 3 p.m. Upon resuming, at 3 p.m., Messrs. Broome, Wilson, Blow, and McKenzie each made a statement, which was taken down by the reporter. Some discussion took place as to whether the Bailway Commissioners should be asked to give evidence. The witnesses withdrew. The Hon. Sir E. Stout moved, " That it is inadvisable for the Commissioners to be examined as to reasons they had for their decision, but they be asked to furnish the facts they had before them in fixing the amount of charges for passengers and haulage." Mr. Duncan moved, by way of amendment, that all the words from the word " it " down to the word " but," both inclusive, be struck out. Upon the amendment being put, it was agreed to. The amendment was then put as the substantive motion, and it passed in the affirmative. The Committee then adjourned till Tuesday next, at 3 o'clock.

Tuesday, 14th August, 1894. Present: Mr. Crowther, Mr. Duncan, Mr Earnshaw, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Morrison, Mr. Bussell, Hon. Mr. Seddon, Hon. Sir B. Stout, Mr. Tanner, and Mr. Wilson. Minutes of the previous meeting read and confirmed. A letter was read from the Hon. Mr. Hislop stating he would be unable to attend, and asking that one of his clerks might be allowed to attend and take notes of the evidence. Bequest agreed to. Messrs. McKerrow, Tiddy, Guinness, M.H.8., Hargreaves, Fred. J. Courtney (Mr. Hislop's clerk), attended the Committee. A letter from the Eailway Commissioners, stating the basis for their fixing the rates for passengers and haulage, was received and read. "' Mr. Hargreaves handed in a letter from the Lands and Survey Department, Nelson, as to the deficiency on the working expenses of the railway, and the same was read by the Clerk ; also, a letter from the Mines Department, dated 26th July, 1894, as to the output of coal required by the lease; and letter of 13th August, 1894, Mr. Hargreaves, Chairman Westport-Cardiff Coal Company (Limited), to the Bailway Commissioners, as regards the deficiency of expenses mentioned above. Mr. McKerrow made a statement, which was taken down by the reporter. The Hon. Mr. Seddon made a statement, which was taken down by the reporter. The Committee then adjourned until Thursday next, at 10.30 o'clock.

Thubsday, 16th August, 1894. Present: Mr. Crowther, Mr. Duncan, Mr. Earnshaw, Mr. Flatman, Mr. Mackintosh, Mr. Morrison, Mr. Bussell, Mr. Tanner, and Mr. Wilson. Minutes of the previous meeting read and confirmed. A letter from the Hon. Mr. Hislop, dated 15th August, was read, asking for a postponement of the inquiry, in order that his witnesses might attend. The Hon. Mr. Hislop attended, and renewed his application. Messrs. Guinness, M.H.E., and. Hargreaves attended the Committee. After the witnesses withdrew it was resolved, on the motion of Mr. Earnshaw, That the further hearing of the petition be adjourned until the 24th instant, and that the Committee will proceed with the inquiry on that date. The Committee then adjourned until to-morrow, at 11 o'clock.

Feiday, 24th August, 1894. The Committee met pursuant to notice. Present: Mr. Crowther, Mr. Duncan, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Massey, Hon..Mr. E. Mitchelson, Mr. Morrison, Mr. Bussell, Hon. E. J. Seddon, Hon. Sir E. Stout, Mr. Tanner, and Mr. Wilson. The minutes of the previous meeting were read and confirmed. Mr. Guinness, M.H.E., Mr. Hargreaves, and Mr. McKerrow attended. A reporter was in attendance, and took down the evidence given. The Hon. Mr. T. W. Hislop appeared on behalf of the Mokihinui Coal Company, and addressed the Committee upon the above petition, also put in two exhibits, 7 and 8, and his statement was taken down by the reporter. Mr. M. Straw, late manager of the Mokihinui Coal Company, was present, and was examined, and his statement was tjaken down by the reporter. Mr. William A. Tiddy, Acting Secretary of the Mokihinui Coal Company, was present, and was examined, and his statement was taken down by the reporter. Mr. T. G. McCarthy, late Chairman of the Mokihinui Coal Company, was present, and was examined, and his statement was taken down by the reporter. The Committee then adjourned until Wednesday, 29th August, at 10.30 a.m.

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Wednesday, 29th August, 1894. Present: Mr. Duncan, Mr. Flatman, Mr. Mackintosh, Mr. Massey, Mr. Tanner, and Mr. Wilson. In the absence of Mr. Eussell, Mr. Tanner was, on the motion of Mr. J. G. Wilson, voted to the chair. Minutes of previous meeting read and confirmed. Besolved, on the motion of Mr. Duncan, That the further consideration of the petition be postponed till to-morrow. The Committee then adjourned.

Thursday, '30th August, 1894. Present: Mr. Flatman, Mr. Mackintosh, Mr. Eussell, and Mr. Tanner. In consequence of a quorum of members not being present the meeting lapsed.

Fbiday, 31st August, 1894. Present: Mr. Crowther, Mr. Duncan, Mr. Earnshaw, Mr. Flatman, Mr. Lawry, Mr. Mackintosh, Mr. Massey, Hon. Mr. Mitchelson, Mr. Morrison, Mr. Eussell, Hon. Mr. Seddon, Mr. Tanner, and Mr. Wilson. Minutes of the two previous meetings read and confirmed. Mr. Guinness, M.H.E., attended and made a statement. A telegram, dated 27th August, 1894, from the Eesident Engineer, Westport, giving measurement of Mokihinui Railway, was read by the Clerk. The Committee then adjourned until 3 o'clock p.m. Upon resuming, Mr. Earnshaw moved, " That the valuation be upon a basis of £12,000, at 6 per. cent." Upon the question being put, a division was called for, and the names were taken down as follow :— Ayes, 4 : Mr. Earnshaw, Mr. Massey, Hon. Mr. Mitchelson, and Mr. Wilson. Noes, 6: Mr. Crowther, Mr. Duncan, Mr. Flatman, Mr. Lawry, Mr. Eussell, and Mr. Tanner. So it passed in the negative. Mr. Duncan moved, " That the valuation be upon a basis of £10,000, at 7 per cent." Upon the question being put, a division was called for, and the names were taken down as follow: — Ayes, 5 : Mr. Duncan, Mr. Earnshaw, Mr. Massey, Hon. Mr. Mitchelson, and Mr. Wilson. Noes, 6: Mr. Crowther, Mr. Flatman, Mr. Lawry, Mr. Eussell, Hon. Mr. Seddon, and Mr. Tanner. So it passed in the negative. The Hon. Mr. Seddon moved, " That the valuation be upon a basis of £8,000." Upon the question being put, a division was called for, and the names were taken down as follow:— Ayes, 6: Mr. Duncan, Mr. Flatrnau, Mr. Lawry, Mr. Eussell, Hon. Mr. Seddon, and Mr. Tanner. Noes, 5 : Mr. Crowther, Mr. Earnshaw, Mr. Massey, Hon. Mr. Mitchelson, and Mr. Wilson. So it passed in the affirmative. Resolved, on the motion of Hon. Mr. Seddon, That the interest be 7 per cent. Mr. Duncan proposed the following resolutions clause by clause : — Clause 1 agreed to as follows: "The Committee finds that the petitioners had the assurance of the Minister of Mines that cheap railway freights would be arranged; it was subsequently discovered that this assurance could not be given effect to, owing to the right of appeal to the Governor in Council not applying as was supposed." Clause 2.—" The Mokihinui line was originally isolated, and practically of little value until £36,000 of public money (the funds of the Westport Harbour Board) was spent in extending the line from Ngakawau to Mokihinui. The petitioners are, as coal-area lessees in the district, liable for part of the interest at 4 per cent, on the sum of £36,000, and it is in evidence that petitioners are liable to a considerable sum (£457) on account of deficiency this year." Upon the question being put, a division was called for, and the names were taken down as follow:— Ayes, 6: Mr. Duncan, Mr. Flatman, Mr. Lawry, Mr. Eussell, Hon. Mr. Seddon, Mr. Tanner. Noes, 5 : Mr. Crowther, Mr. Earnshaw, Mr. Massey, Hon. Mr. Mitchelson, Mr. Wilson. So it passed in the affirmative. Clause 3 agreed to as follows : " The value of the portion of the line to be used by the Westport-Cardiff Company your Committee estimate (on the evidence) at not more than £8,000, this being a very liberal estimate of the cost of construction ; and, as the Mokihinui Company is by its lease compelled to put out 30,000 tons of coal for this year, while the Westport-Cardiff Company is required to put out 10,000 tons, your Committee consider that if the petitioners pay half the interest on £8,000, at 7 per cent., they should be entitled to 'way-leave '«for whatever coal they desire to haul over the line." Clause 4 agreed to as follows: "That the Cardiff Company pay half the annual cost of maintenance of the portion of the line used by them, after deducting from the total receipts for public traffic the same proportion that the section of line, common to both companies, bears to the total length."

Tanner.

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Clause 5 agreed to as follows: "The Committee also consider that the haulage-rates to both the Mokihinui and Westport-Cardiff Companies mines are excessive, and should be reduced by Id. per ton." Clause 6 agreed to as follows: " That this Committee recommends that the present contract be annulled for the purpose of making a new agreement, such fresh agreement being consistent with the views of the Committee as herein expressed." Clause 7 agreed to as follows: " The Committee however consider that the fact that the Mokihinui Company's line is connected with the Government line, and lies between the coal districts of Mokihinui and Westport, renders it desirable that the Government should negotiate for the purchase of that branch, the purchase-money to come from the funds of the Westport Harbour Board, and to be dealt with in the same way as the £36,000 spent on the extension of the line from Ngakawau to Mokihinui." Besolved, on the motion of the Hon. Mr. Seddon, That the above be the report of the Committee, and that the same be reported to the House, and be referred to the Government. The Committee then adjourned until to-morrow, at 10.30 a.m.

Saturday, Ist Septembee, 1894. Present: Mr. Crowther, Mr. Earnshaw, Mr. Elatman, Mr. Massey, Mr. Eussell, Mr. Tanner, and Mr. Wilson. Upon the question being proposed that the minutes of the previous meeting be confirmed, Mr. Earnshaw moved, That the same be amended by the insertion of a minute to the effect that he, Mr. Earnshaw, had retired from the room before clause 3, and the subsequent clauses of the report on the Westport-Cardiff Coal Company's petition, were considered. And upon the Committee dividing on the question that the words proposed to be added be so added, the names were taken down as follow:— • Ayes, 3 : Mr. Crowther, Mr. Earnshaw, Mr. Massey. Noes, 3: Mr. Elatman, Mr. Eussell, Mr. Tanner. ■• The voting being equal, the Chairman gave his casting vote with the noes. The amendment was consequently negatived, and the minutes confirmed without amendment. Two orders of reference, dated 29th August, 1894, were read by the Clerk. After consideration of other business, the Committee adjourned until Tuesday next, at 10.30 o'clock.

Tuesday, 4th September, 1894. Present: Mr. Flatman, Mr. Mackintosh, Mr. Eussell, and Mr. Tanner. In consequence of a quorum of members not being present the meeting lapsed. Minutes confirmed.

Wednesday, sth September, 1894. Present: Mr. Earnshaw, Mr. Elatman, Mr. Morrison, Mr. Eussell, Mr. Tanner, and Mr. Wilson. Minutes of the two previous meetings read and confirmed. Mr. Earnshaw moved, " That the Committee recommends that the minutes of evidence, the minutes of proceedings, and the correspondence dealing with-the petition be printed." Mr. Morrison moved, by way of amendment, " That the further consideration of the motion be postponed until to-morrow." Upon the amendment being put, a division was called for, and the names were taken down as follow :— Ayes, 2: Mr. Elatman and Mr. Morrison. Noes, 4: Mr. Earnshaw, Mr. Eussell, Mr. Tanner, and Mr. Wilson. Amendment lost. Upon the original motion being put, a division was called for, and the names were taken down as follow: — Ayes, 2 : Mr. Elatman and Mr. Morrison. Noes, 4 : Mr. Earnshaw, Mr. Eussell, Mr. Tanner, and Mr. Wilson. So it passed in the affirmative. The Committee then adjourned until to-morrow, at 11 o'clock, for the consideration of other business.

2—l. 9.

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MINUTES OF EVIDENCE.

Friday, 10th August, 1894.—(Mr. G. W. Eussbll, Chairman.) Mr. Guinness's Statement. The Chairman : The last meeting of the Committee was adjourned for the purpose of having the correspondence in this case before us. I may inform the Committee that the correspondence has only just been received, and consequently we have not been able to forward copies to members of the Committee. I presume that the petitioner will in the first place state his case, and then give his evidence, upon which he will be examined by the members of the Committee present. Mr. Guinness : I produce a map of the locality through which this railway passes. I should state first that the Mokihinui Company built the Mokihinui line to bring coals from their mine to their wharf at Mokihinui, a distance of about 3 miles and 68 chains—in other words, to bring coals from their mine to the port. It was found that this port of shipment was not a port where vessels of any large size could enter. The Mokihinui Company had only one steamer to carry coals from their mine. The Government line had been made to the Ngakawau Eiver to carry coals from the mines in the district, one of which was called the Coalbrookdale Mine, the other the Granity Creek Mine, which are both owned by the Westport Coal Company, which carries on large operations. The Mokihinui Company then approached Parliament for the purpose of getting the railway extended from Ngakawau to Mokihiinri, and the result was that Parliament passed an Act authorising the sum of £36,000 to be expended out of the Westport Harbour Board fund to extend this line so as to connect with the Mokihinui Company's railway from their mine to Mokihinui, and so divert the traffic of the Mokihinui Company's line from the Port of Mokihinui to the Port of Westport. As the'Westport Harbour Board gets all the railway revenue, it was considered justifiable to make this extension from Ngakawau to Mokihinui, and this connection was made accordingly. It was a 'condition in the Act that if there were any loss in the working of this connection the deficiency between 5 per cent, on the cost and the net earnings would have to be made up by the owners of the coal-leases in this Mokihinui district —that the contribution towards any such deficiency was to be in proportion to the acreage of the respective coal-leases. The Cardiff Company got a lease of a mine between the Mokihinui Company's mine and port at Mokihinui. The length of the Mokihinui Company's line from the Port of Mokihinui to a point on the Cardiff Company's coal-lease where the latter company's junction is, is about 1 mile and 22 chains. This is shown on the map. The Cardiff Company had to construct 18 chains of railway to connect their mine with the Mokihinui Company's mine. The total distance for haulage from the Cardiff Company's coal-bins to the Mokihinui Bailway-station is 1 mile and 40 chains, which consists of this 18 chains and the 1 mile and 22 chains of the Mokihinui Company's railway. Now, the Eailway Commissioners want the Cardiff Company to pay Is. 4d. a ton for the use of this piece of the Mokihinui Company's line—that is, for way-leave and haulage of coal from the Cardiff Company's mine to the Government railway at the Port of Mokihinui, a total distance of about 1 mile and 40 chains. 1. Mr. Croivther.] By what authority have the Commissioners resumed control of that portion of the line that belongs to the coal companies ? —By the authority of an Order in Council, under which the Government have power to make an agreement with' the owners of the line to resume running-powers over it, and give authority to the Commissioners to fix the rates and charges over the line. 2. To both companies ? —Yes, to both companies. 3. Mr. Wilson.] You mean the Mokihinui and Cardiff Companies?—Yes. 4. So that the rates are fixed by the Commissioners over their own line ?—There are two questions concerned in this matter. In the first place, the Commissioners charge for haulage, and they also charge a sum in the way of rent—or way-leave, as it is called—over that portion of the line belonging to the Mokihinui Company. The Cardiff Company objects to the rate fixed by the Commissioners for haulage and way-leave. The charge for way-leave on this 1 mile and 22 chains is Is. Id. per ton. For the haulage over that 1 mile and 40 chains to bring the coal down from the Cardiff Company's mines they are charging 3d. per ton; but the haulage-rate they are charging to the Mokihinui Company for the same service, but over 3 miles and 67 chains, is sd. per ton. Now, the Cardiff Company objects to that, and says that it is an erroneous or improper charge, favouring another company, and therefore unjust to the Cardiff Company. The Cardiff Company contend that the Commissioners should charge the other or adjoining company in the same proportion to the line used as is charged to the Cardiff Company; and instead of the charge being sd. to the Mokihinui Company it should be 9d. The Commissioners have levied Is. Id. per ton for way-leave over that 1 mile and 22 chains of the Mokihinui Company's line. As an illustration of the injustice complained of, the Commissioners impose a charge of Is. 4d. a ton for the carriage of the Cardiff Company's coal a distance of 1 mile and 40 chains, while they charge the Wesport Coal Company only Id. a ton for haulage of their coal a distance of 1 mile and 56 chains, and refund something back to the company for way-leave. 5. Mr. Duncan.} Do you complain of the Is. Id. way-leave?—Yes; and also the haulage-rate. You can easily see how differently the other line is treated. In addition to the charge of 3d. a ton haulage, the Commissioners have levied Is. a ton on our coal for way-leave over that 1 mile 22 chains of the Mokihinui Company's line that is used by the Cardiff Company, the whole of which is paid to the Mokihinui Company. 6. Mr. Oroiother.} Is the same authority exercised over that as over the other?—Yes.

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7. Mr. Wilson.] Do you not recognise that, in running short distances, they will have to get up steam and make several preparations, so that the cost to the other company is exactly the same for a shorter distance as for a longer ?—But this is one continuous line. When once the train starts from Westport it comes this twenty-six odd miles, and continues on over the 1 mile 22 chains. A portion of the penny charge for haulage is given back to the Westport Company. Mr. McKerroiv : That is not so. 8. Mr, Wilson.] I want to find out what is the fullest extent to which the petitioners ask the reduction of the rate ?—The petitioners think that the reduction should be made according to the through-rate now charged on the Government lines. They say it should be Is. lOd. for the first eight miles, and fd. for every additional mile. 9. Practically, the difference is to a considerable extent off the Government line?—The Cardiff Company have made an offer to the Commissioners (which has not been accepted) to pay a certain proportion for way-leave. But I am now speaking of haulage, which is not involved in that question. William Heney Habgeeaves examined. 10. The Chairman.] You are chairman of the Westport-Cardiff Coal Company ? —Yes. 11. When was that company formed ? —ln August, 1892. The lease was taken up in March, 1893; it is dated the 10th March, 1893. 12. Mr. Growther.] For a period of how long?—For sixty-six years from the Ist March, 1893. 13. What is the rental?—6d. a ton for the royalty; the rent amounts to £450 a year. The rent is somewhat higher than the royalty, as the output is not found sufficient to cover the amount of the rental. 14. Prior to that, how was this lease held ?—lt was held under a prosp^cting-lease. 15. Was it from the holders of the prospecting-lease that your company bought the lease or the right to use it ?—Yes. 16. At what price ?—£lo,ooo. ■ 17. -Mr. Morrison.] Paid in cash or in shares ?—£2,000 cash; £3,000 royalty—ls. per ton levied on the coal—practically as good as cash ; and £5,000 in paid-up shares. -.18. Had your company completed all mining operations—namely, proved the coal, erected machinery, bins, and all other appliances necessary for an exporting trade ? —We completed all the necessary work preparatory to exporting, pending our haulage-rates being fixed, and had filled our bins and twelve or fourteen trucks of coal to send away. 19. When was that completed ?—About two months ago. 19a. About the 10th June ?—Yes; it was done in anticipation of the haulage-rate being settled. We did not wish to lose any time. Everything was put in order to be ready for the market this last winter. 20. You have not been able to agree with the Commissioners about the rates : what work have you been able to do at the mine ? —We have been compelled to cease all work at the mine. The moment the reply of the Commissioners was received fixing the rates, on the 4th June, we discontinued all works and shut up the mine, because we found it impossible to compete in the market in the present state of the coal trade, seeing that such a prohibitory rate was attached to our coal. 21. What were the works that your predecessors had opened up at the date of your lease?— I am not clear about the cost under the prospecting lease ; but I understand there was about £1,500 expended by the original company. We have expended about £12,000. 22. What is the annual expense that you are at, now that you are kept idle ?—Apart from theinterest that we are liable to for the Ngakawau Extension, our permanent charges are over £1,300 at least—£l,4oo probably. 23. That is without reckoning the money you would have to contribute in ease of any deficiency at the Ngakawau Extension? Are there any other mining leases in the immediate district ?—None that I know of, except the Mokihinui and ourselves. 24. Can you give us the areas of these leases ?—Our own is 1,800 acres. lam not clear about the Mokihinui; I think it is 1,757, in three leases. 25. Do you know the line personally from the Government termination to the Mokihinui Company's mine ?—Yes. 25a. In your petition you say that you use but 1 mile and 22 chains ? —Yes. 26. You have constructed 18 chains from there to your coal-bins?—Yes. 27. The Commissioners have made certain charges for transit of coal from your mine to Westport ? —Allow me, in the first place, to state that before running-powers were taken, we approached the Mokihinui Company to try and get a reasonable haulage-rate fixed. That was done in November, 1893. We endeavoured to come to terms with them in order to avoid any friction ; but their charges were so excessive that we declined them. 28. Will you state what they were?—Yes ; they are made up of the various classes of goods, of which I have a list. [List read.] We could not consider for a moment the acceptance of such terms : hence it was that we applied to the Government to fix the rates. Running-powers having been taken by the New Zealand Eailway Commissioners over the Mokihinui Company's line, they fixed the rate to be charged to us at Is. 4d. per ton. 29. Can you explain what that 13d. was for ?—I could only gather this from the agreement entered into between the Commissioners and the Mokihinui Company : it means, " wayleave " over the 1 mile and 22 chains; add 3d. a ton charge for haulage (which comes under the two-mile rate) over 1 mile and 40 chains, including 18 chains to my company's bins. 30. What do they charge from your mine to Westport?—4s. 4d. 31. And from the Mokihinui Junction to your mine ? —ls, 4d,

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32. Mr. Guinness.] Would it be possible for you to compete with other coal-mines under such exorbitant charges?—Taking the Westport Company, our charge would be over two to one. You can see at once that we have double the Westport Company's rate to pay. 33. The Chairman.] What is the distance ? —lt is twenty-eight miles to our bins from Westport. 33a. What is the distance from the other company? —Twelve miles from Conn's Creek to Westport. Mr. Guinness : 11 miles and 56 chains. 34. The Premier.] What is it to Granity Creek?—About lOf miles. 35. What would the coals cost from Granity Creek to Westport ? Mr. Guinness : We have letters here to show that. Witness : There are two letters to our engineer. 36. The Chairman.] Are they in the printed document ?—No. [Letters read, and one put in dated 27th January, 1893.] Witness : I would like to point out, in connection with this matter, the difference of distances : between Granity Creek and the Ngakawau branch is about 2 miles 5 chains. You will notice that the charge proposed by the Commissioners is—from Granity Creek, 2s. 6d., and from Ngakawau, 2s. 7cL; but that would be at the rate of fd, a mile for the remaining 2 miles 5 chains. This is a concession that we were not aware of; we based our rate on what we understood to be the present rate of fd. a mile. 37. The Premier.] What is the difference of distance from Ngakawau to Westport and from your mine to Westport ?—About eight miles. 38. Then, at the same rate that you are paying the charge ought to be 2s. lOd. ?—Yes, about that. 39. And in lieu of this arrangement, how much? —4s. 4d. We recognise the charge for passing over the Mokihinui Company's line; but what we ask is a through-haulage rate from our bins to Westport, seeing that the Commissioners undertake everything connected with the haulage. But we think they ought not to impose a separate rate while the communication is direct. They have not to go over another line for the purpose of the Commissioners. We consider that a through-rate ■•was contemplated by the Order in Council that was issued in April, 1888, and that we are entitled to be charged only on a through-rate. There ought not to be two initial rates: there should be only one initial rate. If more than one initial rate is charged it becomes a great hardship, and for this reason : that if any other companies should open up mines and connect with the Mokihinui line, the district would be practically shut up. In the present case the Commissioners provide the whole of the rolling-stock, and all the wear-and-tear is covered by the haulage. In the case of the Mokihinui Company it is way-leave, and only a question of the wear-and-tear on their own line. For this, we think they would be entitled to receive a fair proportion of interest for " way-leave " on a proper valuation of the section of line to be used by us. We think the question might bo amicably settled. It is purely a question of valuation. 40. Mr. Guinness.] What is the difference in the length the Commissioners have to run from the main line to Ngakawau and the Wallsend Mine ; and from Ngakawau to the Granity Creek Mine in the Ngakawau district? —I think it is about two and a half miles; more accurately, 2 miles and 45 chains. In the letter of 27th June, 1893, it says 2s. 7d. from Ngakawau and 2s. 6d. from Granity Creek to Westport—that is, to run for -|d. per ton per mile for the extra two miles, or something less than fd. 41. And yet they are charging you a haulage of 3d. for 1 mile and 22 chains. Tell me, who does the Granity Creek Mine belong to ?—To the Westport Coal Company. 42. What amount of charge would you consider to be fair and just to be levied as a toll for way-leave on this mile and 22 chains?—l made a proposal to the Commissioners in order to settle this matter without any appeal to the Government or to this House. lam sorry that the proposal was not accepted, because it w rent beyond what our idea was of what was a fair and reasonable charge. It was made without prejudice. It was to this effect: I wrote to the Commissioners on the 24th of July, 1894, as to the charge for way-leave; to value the section of the line to bo used by my company at £10,000, we to pay half the interest on that sum at 7 per cent, per annum without bringing into account the proportion of earnings from goods and passenger traffic. For this sum, or payment, way-leave to be given to us by the Mokihinui Company for passage of our coal to the extent of 50,000 tons for the year, and for all over that quantity to pay the Mokihinui Company ■Jd. per ton. That .we considered a fair and reasonable proposition. The Commissioners proposed Is. Id. for way-leave. I understand they arrived at this result in this way: They took a valuation of the line at £15,000, and they considered that the Mokihinui Company were entitled to 7 per cent, interest on that sum. The annual interest on capital would be £1,050, or £525 for each company, on 10,000 tons—the minimum annual output in terms of the Cardiff Company's lease. The interest would thus be nearly Is. Id. per ton. The effect of this was to tax the coal under the output clauses of the leases. They proposed to tax us on 10,000 tons whether we put out that number of tons or not. We were penalised to this extent per annum. Had they stopped short of the 10,000 tons it would not have been so bad. Their idea was that we would not put out more than 15,000 tons over the line during the first twelve months. But I assured the Commissioners that it was probable we could put out 30,000 tons —say, for certain 20,000 tons—during the first twelve months. Now, what we complain of is this : that we must pay this rate up to 15,000 tons, and that for all over 15,000 tons we should have to pay a Is. a ton. 43. Even though you were to put out 100,000 tons ? —Yes; the more we put out the more interest we would have to pay : in effect, the greater the output the greater amount we would have to pay in the shape of interest. It might go up to 20 per cent, or even 30 per cent, over that portion of line. We considered that this was very wrong in principle, and we told them so.

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Whatever the rate, we consider that, after a certain output, our coals should be allowed to go free. Taking the same basis as in the letter of 24th July, we think that a proper valuation should be made of that portion of the line which we propose to use, and that the rate should be fixed according to the rate of interest they are entitled to, and that we should pay in proportion according to the output clauses, the output being for us 10,000 and for the Mokihinui Company 30,000 tons. That was the basis laid down by the Commissioners. 44. Mr. Guinness.} Will you explain to the Committee what were the terms upon which you endeavoured to arrange with the Government before you applied to the Commissioners ? —Before we proceeded to open the mine, we approached the Government to ascertain what charges we would be placed under for the haulage of our coal from this particular mine. 45. The Government or the Commissioners?—The Government. The reply was that, inasmuch as the line did not exist, it would be impossible to fix the rate: we were urged, however, to go on with the work. There was no communication between us in writing—what passed was entirely verbal. But they said that we should not be placed at any disadvantage in regard to haulage-rate to be fixed on the coal, and that it should be a through rate fixed on the tariff prevailing on that section of the railways. 46. Sir Bobert Stout.} Is that correspondence here?—No ; it was verbal. 46a. With whom was it that the interview took place ?—With the present Premier, who was then Minister of Mines. 47. When was that ?—lt was prior to the time when we took up the lease—it would be prior to December, 1892, or March, 1893. We made, however, a further application in order to get some definite idea how we should be treated. Mr. Mclverrow will perhaps recollect that I waited upon him and Mr. Hannay to ascertain from them under what terms we would be placed when the works for the mine were completed. It was stated then that the line was not yet complete—and it was properly stated—that under such circumstances the Commissioners declined to mention any rate. A rate, however, was mentioned, which we took for an indication of what might occur when the proper time came to fix the rate. This possible rate was that »f a southern line worked in the neighbourhood of Dunedin. When this rate was mentioned, I told Mr. Hannay that if any such rate were put upon us it would prevent our further operations. But, subsequently, the Minister told us that we would not be placed at any disadvantage, and that we should proceed with the work under the assurance that, if we carried out the clauses of our lease, we would not be placed under any severe obligation in regard to the conditions of our lease. But a penalty has been put on us that has not been put on any other company—we were called upon to find and deposit £2,000 in cash, as a guarantee that we would expend £2,000 in twelve months, and £5,000 in two years, or forfeit the £2,000 deposited. And now we have not only completed every condition of our lease, but we have expended over £12,000 within twelve months; so that we have more than fulfilled all the terms of our lease, and all the obligations attached to it. We approached the Commissioners to settle the rate, with the result I have stated. Our representative was in Wellington for several weeks, but, so far as I know, no interview took place. It was intended that an arrangement should be come to that would be satisfactory to all parties. Ido not know whether the Mokihinui Company was represented at the time this matter was under discussion. I only know that our representative had no opportunity of setting forth our views on the questions to be discussed. We could therefore know nothing about the proposals laid down by the Commissioners. To be bound by any such proposals, we ought to have an opportunity of discussing them. It was not until after the whole thing was settled that we discovered the principle on which they had resolved to proceed. It was, I think, only some considerable time afterwards that Mr. McKerrow gave me the whole principle upon which they had formed their determination. As to the object of my letter of the 24th July, it was to avoid any further difficulty, and to save the trouble and expense of bringing the matter before this House, or before this Committee. We were willing to waive our rights to a certain extent, and to act on a liberal basis. We suggested that they should take £10,000, which was an outside value, and that we would pay half the interest at the rate of 7 per cent, on that sum ; and we demanded, and still demand, that before any interest is apportioned to the respective companies, the earnings from goods and passengers should be taken into account. We asked that the Mokihinui Company should allow a passage for our coal to the extent of 50,000 tons, but, inasmuch as the chances were against our putting out that quantity, we proposed what was practically more than double our liability. It comes to 3d. way-leave on the principle of a rental to the Mokihinui Company for the 1 mile 22 chains. This was refused. We now come back to the Commissioners' proposal, on which they have since acted. I have shown how erroneous was the principle upon which they arrived at their decision. We say that if interest at the rate of 7 per cent, is apportioned on the value of the Mokihinui Company's line over which we pass, then, whatever coal we send over that line, we should cease to contribute beyond the sum of £525, and we should not be compelled to pay for extra tonnage. If the Mokihinui Company were to say to us, "We want so much per annum for way-leave," we would say, • "We will give you so much"; and the matter could be settled. But the haulage must be based on a tonnage basis. We say they are entitled to interest upon a fair valuation of that portion of the line which we traverse. 48. The Chairman.] You say they are entitled to interest, but not profit from you ? —Yes. 49. To a certain extent only?—Yes. 50. On what basis is the 7 per cent, apportioned?—The 7 per cent, emanated from the Mokihinui Company, or the Commissioners; not from us. 51. Was it the result of any agreement, or of any decision to which you had agreed?—Not at all. 52. Had it been arranged between the Mokihinui Company and the Commissioners ?—lt emanated from the Mokihinui Company, or the Commissioners. It did not emanate from us.

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53. If the original proposition were adopted, or the modified proposition, would you agree to that?—We say the amount (£525) is excessive. Supposing that the 10,000 tons of coal at Is. Id. met that charge, you have no .right to go further and say that if the quantity should exceed 10,000 tons you must pay more. We say that we are contributing a large proportion in the shape of a percentage towards that line. If 10,000 tons would pay Is. Id., or the whole interest, so far as we are concerned, according to their own proposals, 20,000 tons would pay double, and so we might be called on in time to pay 14 per cent., or even 21 per cent. That, I think, is a proposition that very few commercial men would assent to ■ Mr. McKorrow : You must recollect that this was an arrangement for only twelve months. Witness: We say that it is of a very unbusinesslike character. We say that we are not prepared to sit down under an imposition on that score. What we now say is that we are treated and placed in a different position from that of any other company or line. 54. Sir Robert Stout.] What is the amount of haulage?—fd, a ton per mile. But the Commissioners propose to double the amount for haulage. We object to that. Inasmuch as the public money has been spent in opening the Ngakawau line, it was not the intention of the House to give a fictitious value to that or any other line. The £36,000 or £37,000 expended was never primarily intended to give a fictitious value to a particular line, or to any line, except in so far as to aid the development of the country. The effect of a proposition such as this of the Commissioners of the 4th of June, if we agreed to it, would be not only wrong for us, but it would be a wrong thing so far as the colony is concerned. It will not be long before the Government may require to safeguard the industries of the colony. Seeing that we are tenants of the Crown we require every encouragement that would enable us to promote the industries of the country. What we say in regard to this is, that every reasonable facility should be given to us with that object. As I understand the matter, the Commissioners themselves were instructed to pay a due regard to the opening up and the development of the industries of the colony, and that their management should keep this consideration in view. [Act cited.] The 20th clause says that " The Commissioners shall give due consideration to the promotion of settlement and encouragement of industries in the vicinity of such railway." I can only say that if this is an indication of the mind of the Commissioners as regards the promotion of the object contemplated by the Act, they could not take a surer means of killing it. Mr. McKerrow: The Act cited relates to Government Eailways; the present case relates to private railways. Witness : I cannot see how you can set up the opposite principle for private railways, which are also undertaken to increase produce and facilitate traffic. I would say that, supposing the Government were to resume possession of this or other private railways, that the moment they were taken possession of the charge would be fd. per ton per mile. I want to know how the public money can be better expended than for the purpose indicated; but if you spend £36,000 for a railway seven miles long, and the moment it is opened for traffic (the bulk of the traffic of the district going over the line of seven miles), and a double charge is made for the use of it, how can we reconcile the charge thus sought to be made with the intention of the Legislature to develop the resources of the country ? 55. Mr. Croiuther.) Do I not understand rightly that this £36,000 was Harbour Board money ? —Yes; and the line is practically lying idle. For some time there has been no coal-traffic, except a little from the Mokihinui Mine. 56. Sir Robert Stout.~\ The whole question is, Is this a fair charge or not ? I take it the Committee would wish to have some evidence to show what the charges were on that portion of the line as well as the other portions of the line ?—We have endeavoured to lay before the Committee these charges by way of contrast. Here is an agreement proposed to be entered into in September, 1890, which was made in consequence of the Ngakawau Extension Act. That railway could not be proceeded with until this agreement was made. 57. Do you suggest that they are charging you more than they are charging the Mokihinui and the Westport lines ?—We say that the Cardiff Company is charged excessively. 58. If it has been charged the same as the Mokihinui—is the charge the same from point to point ? —There is a difference, not with the Mokihinui, but with another company—a new company west of Ngakawau. 59. The real question, and the only question that I can see, is whether these charges are fair or not ?—ln support of our contention for a more reasonable rate, both for way-leave and haulage, here is the original agreement between the Mokihinui Company and the Commissioners. The chief clause in this agreement is the 7th clause. The Mokihinui Company are called on to put their railway in order, to enable the Commissioners to run their trains over it. The company is to pay the Commissioners a rental of Id. a mile or fraction of a mile for trucks loaded or partially loaded, and 3d. for each carriage. [Clause read.] Mr. McKerrow : That agreement was only for twelve months. Witness : It only missed, becoming law by the fact that the Order in Council had not been obtained ; the result was that it was pronounced ultra vires. The only clause relating to traffic is clause 4. [Clause read.] 60. Sir Robert Stout.] Do you say that is the law?—lt is not operative, because of the omission to obtain the Order in Council. Mr. McKerrow : That was simply a charge for them going over their line. Witness : Under this 7th clause they pay only a fraction of a penny per ton ; there is Is. 4d. for each locomotive, and Id. per truck per mile. If the Committee will calculate upon thirty trucks with a load of 6 tons each, it will be 180 tons; the cost to the Mokihinui Company would be lJg-d. per ton; the charge will come to less than Jd. a ton per mile. That was intended to be in the way of rental, but there is not a syllable there as to what the Mokihinui Company ,is to pay for haulage to the Commissioners.

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Mr. McKerrow : The charge is merely for the use of our trucks and rolling-stock in working the line. We charge the company a rent for every truck that goes up and down, and for the use of the trucks on their line they pay a fraction of a penny. Witness : Under that agreement the result would be that the Mokihinui Company would have their traffic carried for less than J-d. per ton per mile. 61. Sir Bobert Stout. Suppose it was nothing?—How is it that if they should pay nothing, we should be heavily charged ? The Chairman : There is a difference of opinion as to distance between Granity Creek and the Ngakawau mines ? Mr. McKerrow : That is on the main line. 62. Mr. Guinness.] Will the witness tell us the traffic rates on the Westport Company's line to and from their mine—the coal traffic, on their private railway—on the Waimangaroa branch?— Between the junction and Con's Creek, which is beyond the incline, for coal and minerals, in 5-ton loads, the charge is Id. a ton. 63. Does that include the empty trucks on the shunt?—Yes, it is the charge made for minerals. The shunting would be included in the terminal charge. The special rate between these points and Con's Creek would be -|cl. per mile. 64. Mr. Wilson.'] Would that be for haulage, rent, and everything? —Yes, everything. Mr. McKerrow : That is scarcely accurate. Between Waimangaroa and Con's Creek it is Is.; the reason that it is a little less is that we are running on their line. 65. Sir Bobert Stout.] Do they maintain ?—Yes, we only keep the surface in our own hand ; everything except the surfacing they do. 66. Mr. Guinness.] What is the rate per ton that has been charged by the Mokihinui Company to your company for all traffic on their line to your mine ?—They charge ss. 4d. for all plant. 67. In point of fact, for everything they take up ? —Yes, for everything ; Is. a hundred for timber, and everything in the same proportion. 68. Can you give any evidence as to the value of this portion of the line ? —I cannot give any expert evidence as to value. ~ 69. In respect of the agreement entered into between the Commissioners and the Mokihinu' Company, had you any notice of the proposals to be made in the agreement; or did they ask you whether you had any cause to show against them ?—No ; none whatever. 70. It was done behind your back ?—Quite so. 71. Had you any opportunity of showing the value of the line ?—None whatever. 72. Do you recollect waiting in July last on the Commissioners —that is, last month—in Wellington ? —Yes. 73. Do you recollect seeing them in their office in Wellington ?—Yes. 74. Did you, after the discussion of the various matters with them, receive from them this modification (No. 90, page 38) ? It is dated the 20th of July, 1894. Could you not see your way to accept what was there proposed?—No. 75. I believe your company was advised that when the Commissioners should have fixed the rate you had an appeal to the Governor in Council ?—Yes. 76. It is set out in this paper that an appeal was lodged ?—Yes. 77. Was it addressed to His Excellency the Governor ?—Yes. 78. Is this the answer you got to your appeal ?—Yes. [No. 96.] 79. And now, as to the quantity of coal ?—The recent legislation referred to in that letter is the Act of 1892. [Westland and Nelson Coalfields Act, section 4.] 80. It was pointed out to you that that should be read with the 20th section of the Railways Act, to the effect that all the powers of the Queen were vested in the Eailway Commissioners ?■—■ Yes. 81. The Chairman.] Did that abolish the power to appeal ?—Yes. 82. Is that what you mean ?—Yes. 83. Have you a market for any quantity of coals ?—Yes; we could go on putting out our coal at once, but we have lost the market by reason of this stoppage. 84. We will now come to the passenger rates?—The rate for passengers over the Mokihinui Company's line is Is. over any part or the whole; this will apply to the 1 mile 22 chains so far as we are concerned. The rate charged over the Waimangaroa branch is 2d. only for single, and 3d. return, in excess of the ordinary fares on the Government lines. 85. That is, on the 1 mile 56 chains ?—The Mokihinui Company charge Is. per passenger for the whole or any part of their line. There is no reduction of 50 per cent, for the return ticket; but the passengers over the Westport Company's line pay 2d., and 3d. for the return ticket. The Chairman : In addition to the traffic, the difference is as between 3s. and Is. for the like distance. Mr. McKerrow : The Commissioners, in their memorandum to the Committee, have stated, as I think, all the points which require consideration—principally two. The first is : What is a fair and reasonable recompense to the Mokihinui Company for the use of their line from the Cardiff Company ? The second is : What is a fair and reasonable charge for the Commissioners to levy on the Cardiff Company for haulage from their sidings to the Government station at Mokihinui Station? I presume that this question of average, of which so much has been made, is also included in the Commissioners' memorandum. 86. Mr. Earnshaiv.] Do you contend, Mr. Hargreaves, that the price that is based on the cost of construction of the line between Mokihinui Junction and your mine is too much ?—Yes. 87. How much?—l cannot tell you, for lam not an expert in valuation. 88. But there must be a basis ?—Yes ; it has been taken at £15,000.

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89. If you are objecting to the rate, it must be on some basis which you have ascertained ? —I am not an expert. lam prepared to answer your question to the extent of £10,000; but the line could have been built for less—say, £7,000, or perhaps for under £7,000. 90. Do you challenge them that they have not spent the money ? —We claim to say that it has been improperly spent. 91. Mr. Wilson.] You say you are prepared to give them 7 per cent, on the amount of £10,000. Have you taken into consideration that in that section of the Commissioners' reply referring to sinking fund you are only offering the percentage on the amount they actually pay for their debentures ? It appears from this that you are not assisting them in any way as regards their sinking fund?—-That was not our proposal, it was the Commissioners'. 92. Well, let us take it at £10,000 value: do you think it would be fair-play to give them some further percentage to assist them in setting up a sinking fund ?—I do not think so, for this reason : the line was not available till the public money was expended. It was built for the express purpose of enabling the company to ship their coal from the Port of Mokihinui, and not for haulage over the Government line. Then a movement was made to extend the present line as it now exists; and whatever value it now possesses has been given to it by the expenditure of public money. They would, of course, have the right to get a sinking fund, but to get it they must wait for the development of the district. It must debit its coal venture with a certain proportion of its earnings. It is the Commissioners who say that we are to pay 7 per cent. They do not say what they are to do with it. It does not follow that because they borrow at 7 per cent, that we are to pay at the same rate. I could quite understand if the line were made to give an outlet to the district the question would be different. I could not say what the position would be then. If we had no line we would never have taken up our lease. 93. Sir Bobert Stout.] Do you say that if this line had not existed you would not have taken up your lease ?—Yes. 94. Mr. Wilson.] Do you say that the 4s. 4d. should be reduced to 3s. sd. ?—We should expect it to be less. We do not object to pay the Government rates, but we object to have to pay double rates. 95. The'Mokihinui Company is entitled to charge some rental?—Yes, but that would depend on the development of the district. The 50,000 tons proposal would yield that under the terms offered to them. 96. If you get this concession it cannot come out of the Mokihinui Company, it must come out of the colony; so that if the charges are not supported by the Committee or the Government the company must have something less out of the way-leave fund ?—I do not know. Trade may be assumed to develop in time—they would in time have sufficient for stheir purpose; so that if the rights of the company are met by a specific payment of £350, that will be half the interest at 7 per cent, on £10,000 ; we say we cannot go any further than that. 97. It does not appear to me that £350 is a fair offer : that is barely half what they have to pay on their debentures ?—lf they carried out their own principles we would be entitled to pay them only a quarter. 98. Mr. Groiuther.] You have said that prior to beginning this work you were led to believe by the Government that the charges would be fair and reasonable, otherwise you would never have taken up the lease ? —Yes. 99. At that date, had the Commissioners resumed control of these private railways?—No. 100. You said you had nothing in writing to show that you were induced to take up this lease ? —We had nothing from the Government in writing, but we had a verbal understanding; they said, in effect, that they would not see us blocked or placed at a disadvantage by any other company. .101. But you had nothing in writing ?—No ; but we had this understanding repeated. 102. So that when you took up this lease you took up responsibilities which have given you all this trouble ? —Yes. 103. Now, about this haulage rate, what do you say it ought to be?—lt ought not to be more than the Government rate; the Commissioners put their rolling-stock on that line ;it should be a through rate from our bins to Westport. 104. In any arrangement you wish to make you do not recognise their private right ?—This question of haulage does not affect the Mokihinui Company. The Commissioners put on the rollingstock, but they propose double the ordinary rate, which we object to; we do not think it fair—we do not think it is in accord with the spirit of the Act. 105. Mr. Duncan.] You complain of this haulage ?—Yes. 106. And you also object to the Is. Id. to keep up the line ?—Yes. 107. These are the two main objections that you have ?—Yes. 108. Mr. Flatman.] flow much per ton do you consider that you are overcharged ?—About Is. 2d, 109. Mr. Earnshaiv.} That is, on the whole line from your mine to Westport ?—Yes. 110. Mr. Flatman.] Do you make any allowance to other companies ?—We object to increasing the rate of interest upon more than £10,000. We say that, having imposed that charge, you ought not to exceed it. If you give us a set quantity of tonnage, or fix a lump sum, then we would be prepared to consider the proposition; but if it is to be a rate per ton we object to it. 111. Sir Bobert Stout.] You wish the charge to be 3s. 2c1., or 3d. less than the Mokihinui are charged, although owning the line. Now, are you willing to do this : to buy half of their line?— No; I have not considered that. 112. Why not ? Suppose they were to say, We will sell you half the line at prime cost ?—No ; we do not intend to consider that question; we are not inclined to entertain it, because it is a speculation. We do not think we should enter into anything in the nature of a speculation. I would not discuss it.

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113. Then you say this company has to suffer, while you refuse to bear the charges which should properly fall upon you for the use of a part of their line, and as payment towards the capital invested. Put it as your own case : Suppose you met with a fault in your mine, or a part of your line became useless from some cause, what then ?—That is one of the risks they and we run. 114. Very well, then ; let us come to the matter of risk : Ought they to run the whole of the risk without getting anything for it ? —We can have nothing to do with that. 115. Have you a right to ask the House of Representatives to say that you are to get the use of this line without paying anything towards the risk or the capital invested ? —We do not ask the House for anything of the kind ; but we do not think it would be reasonable to call on any company to guarantee the loss of another company. 116. But this is not a loss on the company; it is a loss on the line?—They ran this risk before we had any knowledge of it. 117. These people, I hear, are paying 10 per cent, on their debentures?—l do not see that we can be called on to consider the impecuniosity of another company. 118. But is it fair for you to say, " We will use your line ; we will not agree to pay anything beyond 7 per cent.," at the same time that they are paying 10 per cent, for their money? How long would you bind yourselves by the rates you give now ?—-I am not prepared to say. 119. You say the basis you want to go upon is a payment of 3J per cent.: how many months would you bind yourself to pay that ?—Twelve months. I do not want to ask you any more questions : it seems to be ridiculous. 120. Mr. Tanner.] Are you satisfied with 3s. if all the companies are placed in the same position?—l do not know ; all the circumstances would have to be considered. It has only recently come to my knowledge that our engineer had received a letter dated two years ago to the effect that on this particular section of line Id. a ton was named for carrying coal two miles. But we do not complain. 121. Then you do not consider yourself unfairly treated on the Government line ?—No ; we do not. So long as we are all treated on the same footing we are satisfied. 122. Mr. Earnshaiv.] Is it not this way : you want your coals from the Mokihinui Eiver upon a certain basis : that implies that you want to carry from your mine to Mokihinui for 2d. a ton ?—>: It would come to that—about that. 123. Well, then, are you willing to pay 3s. ?—lf the Mokihinui is to be taken on the basis laid down by the Commissioners—that is to say, a percentage on the value of the line, whatever that may be—it must be taken on the output principle for both companies; they would have to debit themselves with three-fourths and us with one-fourth : but I think we have adopted a more liberal course than that. At the same time, we say, before you are entitled to call on us to pay interest, it must be taken on the basis of introducing returns of the passengers and goods traffic, which would be a considerable item. 124. You have no risk at all in regard to the line, yet you want to put this matter on a basis that the other company would have to bear the risk ? —We are not bound to accept the risk of another company. 125. The Chairman.} Your position, as I understand it, is this : you are not prepared to accept as a basis the total cost of their railway, and they have no right to expect further interest from you than what they would be entitled to on the basis of introducing returns from passenger and goods traffic. For a certain distance the charge of 3s. is a common charge ? —Yes. 126. And you also think that the haulage charge and the way-leave will be covered by 2d. from your bins to the Mokihinui?—Yes. 127. Will you state what it amounts to : it is a small sum ? — Mr. McKerrow ; £416. Sir Robert Stout: The Committee will bear in mind that the agreement is only for twelve months. 128. The Chairman.'] Would £416 represent the interest on the cost of the line from your mine down to the Mokihinui? —It would be in excess. 129. You contend that they should look for their portion of the 7 per cent, interest entirely from the coal-traffic and not from this line, and that if they get the proportion you suggest what they would receive for the remainder would constitute a sinking fund?—lf you take £200 a year on passengers and goods, that would mean £900 a year on the £10,000. 130. Mr. Flatman.] Could you get a market for those 25,000 tons of coal you speak of ?—We would have had a market for a good deal of it if we had not been compelled to cease our operations. 131. The Chairman.] I understand from one of the Mokihinui representatives that on the distance 3 miles 68 chains they pay sd. : you are charged 3d. on 1 mile and 40 chains?—Yes. 132. Do they maintain the line?—Yes. Mr. McKerrow: They are responsible for all maintenance, for rolling-stock, and slips that may come down. Hon. Member : Slips and shunting. Mr. McKerrow : When you come to short distances of a mile or half a mile, the cost of shunting is very little ; there is very little shunting. 133. Sir B. Stout.] What do they pay on the Fernhill line?—ls. 9d. in Dunedin. 134. Does that cover everything?—Everything. 135. Mr. Guinness.'] Are you aware of the fact that there is no condition in their lease that they should forfeit or give up this railway to the Government when the lease expires ?—1 do not know w rhether this is so or not. 136. The Chairman.] Has that ever been stated to you as one of the reasons for this heavy charge ? —Yes ; it has been hinted that they might lose this line by the discontinuance of the coal; but in their advertising for tenders the railway lease is treated as a distinct lease. 3—l. 9.

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Mr. McKerroiv : It is attached to. the lease of 168 acres : the other lease is for 163 acres. 137. Mr. Earnshaw.] Would Mr. McKerrow tell us what percentage is being made on this coal-traffic ?—Some of these West Coast lines pay very well. The Greymouth line pays 6 per cent. On the Ngakawau Section, of six miles—it is less on that: on the working for nine months there was £880 deficiency. 138. Mr. Wilson.] How is it that Is. 3d. is charged to this company more than on the other?—When the Westport Company began operations it could only run upon a very small scale, and the charge was Is. 3d. a ton down the main line. Of that, 9d. went to the Government for haulage; the other 6d. went to the Wellington Company's mine, for they had made one mile of the railway, at a cost of £5,000. The Westport Company increased in traffic, and the rate was reduced; but they ultimately bought out Captain Williams's interest. I may here remind the Committee that the Eailway Commissioners can make an agreement for no longer a period than twelve months. 139. When that 9d. was charged to the Westport line there was a very small output ?—Yes. Mr. McKerroiv : He is compelled by his lease to turn out 10,000 tons. If he d^es this we have to run an engine for every small thing, shunt wagons, and bring down various things. 140. The Chairman.] Now, I understand your contention to be this : that, although there are 2 miles and 28 chains less between your mine and the Westport than there is between the Mokihinui and the Westport, yet you pay lid. more, and that you consider the amount paid to them for way-leave excessive, so as to prevent you carrying on your trade ?—Yes. 141. Mr. Guinness.] Do you want to put in evidence the Gazette or Order in Council issued under the Coalfields Act, regulating or fixing the rates and fares to be charged by the Mokihinui Company on their own line?—Yes. It is dated 11th April, 1888, fixing the rates and charges for the carriage of goods and passengers on the Mokihinui Company's railway. (See Appendix,) 142. Does that include the mineral traffic ? Yes. 143. What is the mineral-traffic rate ?—For coal it is Is. per ton from the Mokihinui Company's wharf to their old mine near Page's Creek. It must be borne in mind that this includes rolling-stock —which the company were to find. The next rate is from the Mokihinui Company's old mine, near Page's Creek, to the end of their line at Coal Creek or Paringa Creek—this is the full extent of their line. That is Is. also. Then, the charge over the whole line is Is. 6d. per ton. In each case the rolling-stock being provided by the company. 144. Well, now, what is the difference in that Proclamation as to the additional rates which the company can charge when the connection is made with the Government railway to Westport ?— The "proviso" states that if the railway from Westport joins the company's line, then these charges shall be reduced, as regards all through traffic, to rates not exceeding 20 per cent, over the ordinary rates for all classes of goods and passengers prevailing on. New Zealand railways of a similar character, with terminal charges as follows, viz. : On all loading and unloading done by the company, Is. 6d. per ton ; when only either loading or unloading is done by the company, 9d. per ton ; and when neither loading or unloading is done by the company no terminal charge to be made. 145. When you started your operations and had the interview with the Government as to the charges to be made, did you have before you that Proclamation ? —Yes. 146. The Chairman.] You mean to say that you made the Proclamation the basis of your calculations?—Yes ; we had knowledge of it. 147. Mr. Guinness.] What did you expect would be the charge levied ? —W Te expected that, inasmuch as the railway mentioned was that from Westport joining the company's line, and the traffic was through traffic, —meaning from any point on that line to Westport,—the charges would be reduced to those made on similar railways owned by the Government, 20 per cent, being added to the portion of mileage over the Mokihinui Company's line. 148. Did you expect that what you would have to pay would be 20 per cent, in addition to the Government charges? —Yes; 20 per cent, on fd. per mile, including terminal charges. The rates in force at the present time are Is. lOd. for the first eight miles—that includes the terminal charge, which covers maintenance, rolling-stock, &c. ; then the charge for all mileage above eight miles is fd. per ton per mile. We understood when we placed it before the Government of the day that our charge would be, for the through rate, in conformity with this "proviso," from our bins to Westport. The companj' would be entitled to charge 20 per cent, on their portion of the line only. It may be, however, that there is a difference of opinion in the interpretation of the Gazette notice or Proclamation ; but that was the one which was put on it, and on which we relied. Whatever interpretation may be given to this proviso, it is quite clear that a reduction is in question. In the present proposal an increase is imposed, but in this proviso [referring to the one appearing in the Gazette] a decrease is proposed. Under this proviso the Mokihinui Company are to provide rolling-stock, maintenance, &c.; under the new proposals the Government are to provide the rolling-stock. 149. Mr. Morrison.] With regard to the rate of Is. lOd. for the distance of eight miles, that was the gazetted rate that was struck ? —lt exists at the present moment; it is the Government rate. 150. You talk about a 20-per-cent. reduction?—l said "addition," not "reduction." Under the proviso the Mokihinui Company are allowed the privilege to charge not more than 20 per cent. on the rates charged on the Government railways. I am aware that there is a great difference of opinion as to the interpretation of this proviso. But it says that the Mokihinui Company were to have the right to charge, for all traffic over their line, 20 per cent, more than was charged on the Government lines, and the Cardiff Company opened their mine on this understanding. The question at issue is whether 20 per cent, on the through traffic was to be added to the mileage rate of three-farthings. Mr. McKerroiv : The proviso is very badly worded. The Mokihinui Company takes the interpretation of lines of a similar character. The Government works a short-distance rate on their

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line. Then, when you come to the company's line, they charge a short-distance rate. The shortdistance rate in this instance is Is. 9d. per ton, and the company add to this 20 per cent. If you look at classes P and Q you will see that Is. 9d., plus 20 per cent., comes to 2s. Id., and that is what the Mokihinui Company, if permitted, would charge the Cardiff Coal Company. Mr. Morrison: They could charge that for one mile. Mr. McKerrow : They could charge it for 1 ton for any part of a mile. Witness : We have proceeded with our works on the interpretation I have stated, and on the expectation and assurance of the Government that that was the intention. Notwithstanding what interpretation may be put on the proviso, the fact cannot be denied that a reduction was in contemplation, and not an increase. 152. Mr. Morrison.] I understand that the Commissioners have brought down that rate ?— My contention is that whatever interpretation is taken the question is one of reduction and not increase. Supposing an increase was intended, the increase would be on Is. 6d. The proviso distinctly says reduction, and not increase. " These charges shall be reduced as regards all through traffic to rates not exceeding 20 per cent.," &c. The increase cannot apply to all the line from Mokihinui to Westport; it can only apply to the through rate from any part of the Mokihinui Company's line. It has been said that we wished to take advantage of the Mokihinui Company. We want to do what is right and fair. But Ido say, in the presence of this Committee, that we as a company started with the full assurance that the rates as stated would be arranged by Government. 153. Mr. Guinness.] Will you state what is the amount you are prepared to pay for the wayleave for this service of line ?—I think it is due to the Committee and myself to state my reasons for not answering that question, and in maintaining the position I did yesterday. I did not come before this Committee in the belief that they expected me to make proposals with regard to dealing with this matter, because it is in the hands of the Committee to make what recommendations they think fit. With regard to the question put by Mr. Guinness ; in the first place, if the Committee wish it. the proposal that we think would be fair and right would be this : that an expert valuation be made of that portion of the Mokihinui Company's railway-line over which we require to pass our coal; that interest at the rate of 7 per cent, be allowed to the Mokihinui Company in such valuation-—as proposed by the Commissioners—my company to pay half the amount of such interest for way-leave or passage of our coal to the extent of 30,000 tons for one year, and for all over 30,000 tons a nominal charge, say, id. per ton, to be paid by my company. If this does not meet the rights of the Mokihinui Company to that point, then, we say, take into account the proportion of receipts from goods- and passenger-traffic, and let the Mokihinui Company take credit for that. It would be no inconsiderable sum, if the sinking fund is not included in the 7 per cent. The proportion of receipts from goods- and passenger-traffic ought to make a good return to reimburse the company for the cost of that portion of the line which we traverse. 154. Mr. Mackintosh.] What do you sum it up to be ?—I am suggesting coming to this by expert valuation. Supposing we valued it at £7,000 —and this would be well within its valuation— at 7 per cent., that would be £490. We would pay half of that; and in addition to that there would be the benefits derived from goods and passengers. For half that sum we would ask the Mokihinui Company to pass coal over for us to the extent of 30,000 tons; and after that, seeing that half their rights are met by this proposal, we say, "Do not continue this imposition for every further ton of coal we put out, but make a nominal charge of, say, -|d. per ton on all that we put out over 30,000 tons." This would be reasonable, and far better than the terms set out in the proviso to the Order in Council. 155. Mr. Earnshaiu.] Did I understand you to say that you were not prepared to meet the sinking fund?—lf the Mokihinui Company's rights are met by allowing 7 per cent.—which may include sinking fund—if they are also met by the proposal to pay half of such interest, that should satisfy them for the £7,000. They are then getting a better return than they could have got before. If it does not include the sinking fund, then they have the goods- and passenger-traffic, to say nothing of their own coal-traffic. They will find that in the course of time, as trade develops, they will get 10 per cent., or 15 per cent., or even more. Do not smother us with a heavy charge, for in any concern like this, if you hamper it at its commencement by heavy charges, you will kill the industry at its birth. By-and-by, if any injustice is done to the Mokihinui Company—which we are far from wishing—it can be remedied at the end of the agreement time, which cannot be longer than twelve months. 156. Mr. Guinness.] Is your company prepared to guarantee to pay at that rate on 30,000 tons per annum whether you carry it or not ?—Yes. 157. Mr. Morrison.] Why should you insist on getting the line revalued now; was it constructed in a very costly manner ? —Yes ; the rnoney was squandered. 158. I have heard it stated that the Cardiff Company were simply stripping or scratching the coal from the surface ? —There is no truth in it at all. We work our mines in the natural formation of the seams, and we would be very foolish to work in any other way. We have our seams opened out as far as possible, and have let daylight in through the tunnel at the other side of the Chasm Creek; and we are only waiting to make room for men. It is absolutely untrue to say that we are working our mine in the manner you indicate. Son. Mr. Hislop : There is a good deal as to the amount of money spent on the works. Ido not know whether that will have any effect with the Committee ; but, if it will, I would like Mr. Hargreaves to give more specific information. The Chairman : It is not probable that that will enter into the decision of the Committee, 159. Hon. Mr. Hislop.] The capital of the Cardiff Company is how much? —£30,000 nominal. 160. Does that include £10,000 for the land ?—No, £5,000.' 161. How many shares have been taken up ?—17,000. 162. What is the amount of capital that has been called up? —15s. per share.

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163. On the 9th March lls. was called?—The last call, made the other day, brought the amount up to 15s. 164. Out of £9,760 called you had only received £7,949, leaving unpaid £1,731. Is the position of the company better now ? —That may be quite correct. 165. Is that the position now?—l cannot say at present. Necessarily, the calls will fall very far short. 166. And 222 shares have been forfeited?—Yes, that is so. Only the application and allotment moneys had been paid. 167. When you spoke of the New Cardiff Company that company consisted of whom ?—I cannot tell you. 168. Were you not a member of it yourself ?—No. 169. You were one of the promoters of the company who received bonus shares ?—Yes; that is the Westport-Cardiff Company. 170. There was a considerable sum made up of bonuses. Did you base that bonus on the prospect that was held out to you that there would be a reduction of fares ?—No. 17.1. You based your bonuses on that, and actually made money out of it ? —I decline to answer any improper question, and appeal to the Chairman to protect me from insult. I have nothing to screen. The Chairman : I regret that such an imputation should have been made by Mr. Hislop. 172. Hon. Mr. Hislop.] Was that one element in the making-up of the amount of bonuses which the new company gave the old company ? —No. We took it for granted that the charges would be the usual charges, without inquiring further until too late, when we found there was a doubt. 173. I want to know upon what this £5,000 of bonus was based. You say you have nothing to screen, therefore I have no hesitation in asking the question ?—What £5,000 of bonus ? 174. I understood that there were £5,000 of bonus shares ?—That was part of the purchase, and was not in the shape of a bonus. 175. Upon what was that £5,000 based ? —lt was part of the £10,000. It was part of the amount given for the lease. 176. What was it based upon ? You spent no money on the land which you got from the Government, and then you get £10,000 in the way of bonus ?—The New Cardiff Company consisted qf a body of men generally living on the W rest Coast. Their representative came over to Christchurch and laid certain proposals before me, which proposals I refused. Subsequently, we made arrangements to try and float a company, and it failed. Again we tried, and unfortunately were successful in floating a company with a capital of £30,000, £17,500 being subscribed. £10,000 was paid to the original owners of the property for the lease. The £10,000 consisted of £5,000 in paid-up shares, £3,000 in royalty on the coal output, and £2,000 in cash, none of which has been paid, and is a debt owing by us to the original company. 177. Were you a member of that company ?—No. 178. Who were those shares given to ? —Among the original promoters. 179. And this £3,000 of royalty : was this also so distributed ?—Yes. 180. And the £2,000 of cash also ?—Yes. 181; Had you a valuation of the mine made at the time ?—No. 182. Or of the works ?—There were no works done except the proving of the lease, and the expenditure of about £1,500 in prospecting by the New Cardiff Company. 183. Had you no accounts of that ?—No; we called for no accounts. W*e took their statement for it. 184. Then the £10,000 simply meant a premium for the lease ?—Less the amount they had expended and the rents for about twelve years. 185. Do you know how much that came to ? —No. 186. That lease was surrendered, and you got a new lease in 1892?—Yes. 187. Your lease was quite good under the old Act?—We had no lease under the old Act. We applied to the Government to have it under the new Act. We did not inquire into whether the old lease was good under the new Act or not. 188. I want to know whether the erection of this railway by the Mokihinui Company had not a great deal to do with making this lease worth £10,000 ?—lt had nothing at all to do with it. 189. Had you no specific promise as to the amount the rates would be reduced ?—From the Government we had. 190. In writing?—No, not in writing. 191. Did it form part of the prospectus?—Yes, it formed part in this way : We had published what would be the approximate cost of coal ex ship at Lyttelton. 192. Was that included in the prospectus ?—Yes. 193. Have you a copy of the prospectus ; it would be a great help ?—No. 194. Can you tell us then was the regulation which you have stated as haulage in that prospectus? —I never alluded to it. 195. I understood that this promise that there should be a reduction in prices was a great inducement to shareholders ?—We never paraded before the public in the direction that you are indicating. 196. It is not what was in the mind of promoters, it is the inducements that were held out to the people who took shares I want to know. You stated to the new shareholders that there would be a reduction in price ?—We took into consideration the probable cost of haulage, the cost of cutting, and the freight to Lyttelton, for example, and we published that. 197. Now, regarding this promise: when was that made?—Before we put a pick into the ground. 198. What date was that ?—Prior to March, 1893, the date of the lease.

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199. That is between what dates?—The company was floated in August, 1892, I think (we did not get it finally started, but we had the preliminaries started by March 10th, 1893). 200. You had the lease before that ? —I was asked about the conditions of our lease yesterday. One unusual condition was that we should deposit £2,000 in cash as a guarantee to observe and carry out its obligations. lam not prepared to say whether it was an improper one, but it was a hard one. £2,000 is the guarantee that we would carry it out. We had no lease prior to March, 1893. 201. Was there no lease ; that is only a quibble ? —I am not quibbling. I am stating the truth. The Chairman: He represents the new company, which had nothing to do with the former company. 202. Hon. Mr. Ilislop.] I decline to take it. This lease was granted twelve years before, and, when no conditions were complied with, £2,000 had to be put down as a guarantee that they would be complied with ?—I had nothing to do with, and knew nothing whatever of, any lease except the one now before the Committee. 203. Did you objeco to using the previous lease?—We had an agreement to convey to us all the interests of the owners in this lease—that is to say, whatever that lease had under the new Act. To save trouble we took out a new lease from the Government under the new Act. Mr. Seddon : Both the Mokihinui and Cardiff Companies had to take out new leases under the new Act. 204. Hon. Mr. Hislop.] I want to know whether the agreement which you made was not an agreement to enable you to surrender the old lease in order to get a new one ? —No, it was not. 205. Had Mr. Bayfeild no lease ?—Whatever rights the New Cardiff Company had they undertook to transfer those rights to us. 206. Did you not make yourself aware that Bayfeild had a lease under the old Act?—l never saw the lease, nor do I know what was in it 207. To whom were these promises made?—They were made to Bayfeild in the first place. 208. I want to know specifically when these promises were made, and by whom they were transmitted to the shareholders ?—They were not transmitted at all, they were given to us as directors of the new company. '■ 209. Have you the agreement that was entered into by Bayfeild and yourself and others as trustees ? —No ; it is in Christchurch, in the office of the solicitors. 210. Can you get it ;■ it might help us very materially ?—lt might be procured. 211. After your people were put into possession you had an offer from the Mokihinui Company to join them in the maintenance and construction of the Mokihinui line so far as it affected yourselves?—Certainly not. That is news to me. 212. Did you never receive a letter on the subject from Mr. Macarthy, Chairman of the Mokihinui Company ? —I do not know him. I never had any correspondence with him in my life. 213. Nor the secretary?—Yes; bat not on that subject—none whatever. 214. Were you made aware of any offer made to any one representing the interests of the Cardiff Company, either your predecessors or yourselves? —Would you confine yourself to any time? I never heard a word about anything of the kind before I pat foot in Wellington on this occasion. The first information I had of it was from Mr. IVicKerrow, in his own office. [Hon. Mr. Hislop here read Letter No. 31, printed correspondence, on the subject.] Witness : That, you will notice, is from the New Cardiff Company, not my company. 215. Hon. Mr. Hislop.~] Was that not recommended to the new company ?—No. 216. Are you prepared to pay anything in respect to the risk in connection with the destruction of the line by slips or anything of that kind ? —I am not prepared to say that we will accept anything of that kind just now. If anything of that kind is to be imported there will be a possibility of our not agreeing. 217. The matter has been discussed between the Mokihinui directors and your own directors ? —Unless it is embodied in the Mokihinui Company's own letter of proposal on 14th November, 1893, we have never considered or discussed it at all. 218. W 7as there not a conference here in Wellington between the directors of the Christchurch company and the Mokihinui Company ?—No; we never appointed any one to act on any such conference. All questions pertaining to the management of the present company's business have been left in my charge, except those with reference to the settlement of the haulage, which were left in Bayfeild's charge. 219. Bayfeild came to Wellington, did he not, to try to come to an arrangement between you and the other company ? —Yes, Bayfeild came here, but for the express purpose of determining the question of haulage with the Government. Bayfeild wrote a letter to the Mokihinui Company, but in so doing he went beyond his authority. We did not mean to approach the Mokihinui Company except at their own invitation. It was only waste of time. In the first instance, before we approached the Commissioners, we tried to settle it with the Mokihinui Company, but failed altogether. There was no standing-room between us at all. It was not until we gave the Mokihinui Company notice of the course we wished to pursue that they asked us to send a deputation to meet them, and we declined. 220. Have you not considered among yourselves the question of risk ? You are aware that just about twelve months ago there were repairs done to the line costing about £1,200 ?—I am not aware of it; but Ido not question it. 221. You do not think that amount would be beyond the mark ?—I do not know. If you say so I am quite prepared to accept it. 222. What was the charge for coal over the Mokihinui's line ? —ls. lOd. per ton. 223. That included everything; they did the work?—No; they wished to charge us rental for the trucks besides.

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224. That was in the first letter you received with regard to terms ?—lt was the final one. 225. You have not considered the question of risk ; and you are not prepared to say how much that would be ?—We have not considered the question of risk, and are not prepared to accept it at all, except on a general provision for the whole line. 226. You adopt a rate of interest, 7 per cent., and you do not allow us anything for risk to the line —nothing for sinking fund, nothing for permanent repairs, which we are bound to put on the line?—l do. The coal-traffic is not the only traffic. I think the goods- and passenger-traffic will be very great if the Mokihinui Company will watch their own interest, but not by imposing heavy rates at the beginning. 227. You say you will give us this traffic ; will you instead give us a specific amount ?—Yes; it is embodied in my proposal. 228. You will give us 3J per cent, on the estimated cost price. Are you prepared to give us anything towards the sinking fund?—No. 229. Would you be prepared to add an approximate £150 on to your offer, and the chance of a division of the profits ? —I have not considered it. 230. Will they guarantee us a certain amount ? —Yes ; 3-J per cent. 231. Will you guarantee us a certain sum for risk, and will you pay half the sum of the cost of repairs whilst you are using the line ? —No. 232. You want us to take the responsibility? —You are begging the question by the assumption that this railway was built for us. It was built to levy charges on the coal going to and from the Mokihinui Company's own wharf. 233. Are you prepared now to reverse the position and buy the railway?—We are not in a position to make any proposals, nor have we considered it. We have no desire to become railwayowners at all. We have never contemplated it. 234. There has been another subsidiary argument. In the idleness of the men the Mokihinui Company offered your company to carry your coal and allow the charges to remain in abeyance until the settlement ?—Not at our request. 235. Did the Mokihinui Company make that offer to you ?—Yes; they made it to Mr. Bayfeild. He -was not authorised to apply for any offer. 236. Yesterday, I am told, you stated that you had been charged ss. 4d. per ton for all goods •carried on this line; have you actually paid all that? —Not the whole of it. There is one account yet under dispute. We paid all under protest. It was not until after we found what the rate was that we gave orders to pay under protest. 237. That is the principal part of it ?—We have paid all but about £35 or £40. 238. Has it been more than £40 altogether?—l do not know. I have been away from business for the last few months. 239. Hon. Mr. Seddon.] Can you tell me the number of men likely to be employed in your mine ?—We are going to put on about twenty-five to begin with ; and, of course, that would be increased every week as the mine is developed. 240. Taking an average, what would be the number of souls all told ? —I cannot say; but we would give the preference to married men. We wish to see that district settled. 241. Have you any knowledge of the number of men employed on the Mokihinui ?—No. 242. What do you think would be the value of the goods- and passenger-traffic over your section of the line ?—About £200 or £300. 243. Is there any road to get to your mine other than by the line?—There is no road, except a very rough one. I take it that as this and the Mokihinui Company's mine developed the population would increase, reasonably and fairly, within three or four years, to five or six hundred people at least. 244. Now, coming back to the correspondence : Were you informed of the first agreement made by the Commissioners with the original owners of the New Cardiff Company ?—Yes. 245. Were you told that the Government had raised this question, and on the ground thatthe charges levied were exorbitant ?—Yes. 246. And that was prior to your putting out your prospectus ?—Yes ; and, further, I would say that the directors of the company had determined that unless we could see our wav to float the company satisfactorily we would put it into liquidation, return the money to the shareholders, and bear all the expenses ourselves. 247. There is some doubt thrown on the genuineness of the present company's liability for interest on cost of the Ngakawau line. What is your share in it ? —More than half; and this year there is a deficiency of over £800 on the working of this line, for which we are liable in part. 248. It is really now part of the rental ?—Yes. 249. Mr. Morrison.] The Mokihinui Company did not close your works with this dispute; they offered to keep your mine employed ?—No ; not necessarily. They said they were prepared to carry our coal at the rates as imposed by the Commissioners, and allow us a reasonable period in which to get the matter settled. But the wording of the letter was: that, whether the matter was settled or not, they would fix a time in which we were to pay that rate. We decided that we would not avail ourselves of that offer, as we ran the risk of putting out coal at a loss. 250. There was a dispute between the Mokihinui and the Cardiff Companies. The Mokihinui Company were willing to allow you to carry on, and whatever agreement was arrived at that would be the basis of charge the Mokihinui Company would make. Is that so? —No. 251. There was £10,000 of bonuses, or whatever you call it; this was handed over to whom ?—■ There was no £10,000 of bonus at all. You are alluding to the purchase of the lease. We purchased the lease from the New Cardiff Company, and also their interest, for the sum of £10,000, to be paid in 5,000 fully-paid-up shares in the company, £3,000 royalty on the first 60,000 tons of coal put out, and £2,000 in cash. Of this amount only £40 in cash has been paid.

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252. How long had the New Cardiff Company been in existence?—About twelve years. 253. What was the rental ? —I do not know. 254. Did you take over the liabilities?—We took over nothing at all. 255. Mr. JEarnshaw.] You answered a question that the fact of the Mokihinui line being constructed had no bearing at all with regard to the floating of the new company. Now, did not you answer a question to me yesterday that if the Mokihinui line had not been there the new company would have had nothing to do with the Cardiff Mine —that it was because the line was there that the company was formed ? —You must have misunderstood my answer. I said there was certainly an advantage in having a railway running through our own lease. It was an advantage to have a railway close handy. 256. If there had been no line there, would the Cardiff Company have been floated, from a reasonable point of view ?—ln that case we should have obtained an assurance from the Government that the Ngakawau Railway extension would be carried through the district. 257. You are aware that the Mokihinui Company raised money at 10 per cent ?—That is not really a part of the question that affects us. 258. Do you think that to base the cost of the line at 7 per cent, is an extreme price? —Well, of course, solvent and insolvent companies cannot be considered on the same footing; but solvent companies should get their money at an easy rate, and 7 per cent, ought to be sufficient. 259. Do you know of any company basing their rates on less than 7 per cent. ?—Yes ; I think, the Westport Coal Company. 260. Do you think £7,000 is a fair valuation for the Mokihinui Company's line?—l should think we would be well within the mark at £7,000. I am, of course, only a layman, and am not an expert. 261. Mr. Guinness.] Supposing the Mokihinui Company proved a large fault in their mine, and their mine became of no use to them, you must realise that they would make a complete loss on the line ; are you prepared to pay any sinking fund in the event of such a contingency ?—We are not prepared, because we are liable to the same contingency ourselves. 26-2. Mr. 'Earnshaiv.] They have built a line, and must take the risk of faults in their mine, and they have laid down a sinking fund with that and other things in view. You are asking for the use of this Mokihinui Section without any provision for any such contingency ?—Except in the way I have suggested just now. That is a very important consideration in this question—the value of the goods- and passenger-traffic. 263. You do not believe that £16,500 was spent on that line ?—Yes, I do. 264. You accept the fact that that sum was expended?—Oh, yes; but what I object to is the manner in which it was spent. 265. Mr. Growther.] I want to know what you mean when you refer to insolvent companies ? —It may have been improper of me to have done so, and I now withdraw the remark. The Mokihinui Company are in a difficult financial position, for which I express great regret; but I say that neither our nor any other company who may use this line ought to be made to suffer on the score of the misfortunes of the Mokihinui Company. 266. Is it a fair question for me to ask : Have you reason to believe that this company cannot live very long, and that you will acquire the line at a much easier rate hereafter ? —No, we have no such expectation; our only thought is that the Government might take the line over afterwards. 267. The Chairman.] Was the promise verbally given to you ? —No, not to me. Mr. Seddon gave the promise to Mr. J. B. Fisher and the deputation. 268. Fifteen thousand tons of coal is what your output would be. Have you worked out what your proposal at 7 per cent, would be on that £7,000 ? Plow much per ton would your proposal come to ?—I think it came to about 5f d. on a valuation of £10,000, which I consider overestimated. 269. Do I understand that your contention before the Committee is this : that if this increased rate of lid. per ton is levied you cannot work the mine ? —Yes. I have prepared a statement showing the cost and expense of getting the coal out, and of haulage : (1.) The cost of cutting 15,000 tons is 7s. 3d. per ton; haulage, 4s. 4d. : total, 11s. 7d. The average price per ton, free on board at Westport, is 11s., leaving us a loss of 7d. per ton. The permanent charges are about £1,500 a year, and no dividend to shareholders. (2.) In addition to this, under the purchasing clause in our agreement we have got to pay royalty on the first 60,000 tons amounting to £3,000. (3.) Then the next average for 25,000 tons is 6s. 6d., and haulage 4s. 4d.; total, 10s. lOd. The average price being 11s., free on board, we have a profit of 2d. per ton, or £208. But against that comes the payment of the royalty, which makes a loss of 10d^ per ton. 270. Mr. Wilson.] That amount of royalty to the promoters is not a working-expense, but is a portion of your capital ?—lf the company is successful we may debit our capital with it, but if we are hampered in the first place how is it possible for us to provide for this royalty on 60,000 tons ? 271. Hon. Mr. Seddon.] You would have to put your hands in your pockets. How do you work it out exclusive of paying 6d. per ton royalty to the Government ?—We lose 7d. per ton on 15,000 tons, and gain 2d. per ton on 25,000 tons. 272. Mr. Earnshaw.] Outside of the 5,000 promoters' shares, how much of public money have you got in shares ?—Each of the directors took 750 subscribing shares. The total number taken up by the public was over 17,000, and on these 15s. each has been called up. 273. Mr. Morrison.] This new company was not loaded to any extent, was it ? You took over a certain lease and expended £10,000 —£3,000 royalty on 60,000 tons at Is. per ton, and 5,000 shares at £1 each fully paid. That was loading, of course? —Yes; and there was £2,000 in cash. 274. Did the gentlemen who acquired the rights from the old company receive any remuneration? —They got a proportion.

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275. How much was the new company loaded ?—The whole of the 5,000 paid-up shares, except some which we gave to large applicants for subscription shares, were divided -pro raid in accordance with the holdings of the original owners. 276. The Chairman, ,] I understand that you went into this thing on the assurance of the Government that you would have comparatively cheap rates for your coal, and on the belief that there was an appeal to Government; and you were under the impression that the Government would carry out this promise to you, in the matter of your appeal, if you had any difficulty with the Commissioners; and found subsequently that the Government could not assist you?—Yes, that is so. 277. Hon. Mr. Hislop.] When did you know about that? —We knew it on my last visit to Wellington—at the final interview. 278. It has been assumed all along that there was no appeal?—Not on our part. 279. Did you not know that the Legislature assumed that there was no appeal ?—No. Our solicitor up to the last moment believed we had an appeal. 280. Ron. Mr. Seddon.] On what point? —That the Commissioners are "persons," and that we are a company " holding on authority." 281. Mr. Tanner.] At what date did you receive or know of that proposal from the Mokihinui Company whereby they proposed to carry the coal taken from your mine and allow the matter of rates to stand over until an agreement was arrived at ?—lt was the 16th of November last. 282. When were the operations stopped at the Cardiff mines?—On the 6th of June of this year. 283. You were aware of the offer I have previously referred to ?—Yes ; but at the time this letter was written our works were not completed. We have since gone on with them. 284. When did you start getting your coal out ?—ln company with one of the directors I went over the mine in April. The lines were then being completed, and the finishing work was being done to the bins. By the time we returned to Christchurch the lines were finished, and the engineer advised us that he was putting coal into the bins. At the end of May the bins were full, and .we. proposed, therefore, to fiil trucks in anticipation that we would be dealt with at a reasonable rate. On the 4th of June we got the Commissioners' letter, which deterred us from going on the market at all, and we had to stop the works. 285. It was then within a week after you had stopped work that you got the renewal of the offer ?—Yes. I never saw any offer to fix the rates. 286. How long is it since you have decided not to avail yourself of the Mokihinui Company's offer to take your coal and leave the amount to be charged for ultimate settlement ? —Since the 11th of June. Before closing my evidence I should say that, in taking into consideration the cost of coal-cutting, we have reduced the price by sd. per ton. We have based our calculations on the rates of hewing at 6d. per ton less than the Westport Company give. If we reduce it more the miners will step in and say they are not being fairly paid. Geokge Hebbert Beoome examined. 287. Mr. Guinness.] What are you ?—I am a mining and civil engineer. 288. What experience have you had? —I have had about twelve and a half years' experience in mining engineering and mining operations. I obtained a certificate as colliery manager at Home in 1887, after five years' practical experience in coal-mining and engineering. 289. As to the construction of railways and other works, have you had any experience?—l had some experience in England in the construction of railway-sidings for collieries and collieryworks generally in the Midland Counties, in Staffordshire, and also in South Wales, at the Plymouth works. 290. Did you prepare all the plans and estimates for your company's works at Mokihinui?— I did. 291. In preparing the estimates and carrying out the works have your estimates been under or over the actual cost? —My estimates were slightly under the actual cost, but were increased owing to an extension of the works which we found necessary. In the first instance, my directors thought of opening up the mine at a point called " No. 4" in Mr McKay's small sketch-map. I think we have a copy of that, and shall be able to put it in in evidence. However, after spending some hundreds of pounds in thoroughly prospecting, my directors decided to extend their works and. go into a more permanent field. [The witness was proceeding to give a detailed account of the prospecting works of the company when he was stopped by— 292. The Chairman.] The question you are asked was this: "Have the estimates which you supplied the company with proved accurate ?"—They have. My estimates were rather below the prices at which the work was taken for. 293. Mr. Guinness.] Do you know the 1 mile 22 chains of the Mokihinui Company's railway? —I know it very well. 294. How long have you known it ?—I have known it for about three years. 295. Is it a difficult or dangerous piece of line to maintain?—lt is not exceedingly difficult. There is one point in it termed the " bluff," near the Mokihinui Company's wharf, where slips have occurred, and are liable to occur ; but, with the exception of this particular point, it is not a difficult line to maintain. The tunnel is only 3 chains in length, and is in excellent rock, and is not likely to give any trouble. There are two small bridges, with small spans, which are now in good repair, and not likely to cost much for maintenance. 296. What is the length of the bluff at which slips are likely to occur?—Probably about 4 or 5 chains of it. 297. I understand this railway is built along the rather precipitous bank of a river in many parts?—That is the bluff to which I have referred.

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298. Is there any other site upon which any other company could build a railway if they wanted to, or does the Mokihinui Company's line occupy the only available site?—Practically, the line occupies the only available site. 299. Have you made any estimate of what it would now cost to construct that 1 mile 22 chains ? —I have. 300. What is that estimate?—My estimate comes to £6,097. I may say, in regard to this estimate, that the quantities are not taken from actual measurements, but from an intimate knowledge of the line I have been able to form fair approximations of the quantities, and I think I have rather overestimated than underestimated them. But I have no hesitation in saying that such a line could be constructed now for under £7,000. I say that without hesitation. 301. The Chairman.'] Fix the points?—From the junction of the Mokihinui Company's line to the Government line up to the junction with the Cardiff Company's siding. That is approximately 1 mile 22 chains. 302. Is the connection of the Government line at the end of the Mokihinui Company's line or not ?—At the end of the Mokihinui Company's line. 303. Mr. Guinness.'] Have you the details of your estimate?—Yes. [Witness here put in his estimates as evidence.] 304. Were you present when the Minister of Mines was introduced, or did you interview him yourself about these charges ?—I had an interview with the Minister of Mines on two or three occasions. 305. When w xas it ? After the operations for opening up the mine were complete ?—lt was between the arrangements for opening up the mine and the completion of the works. 306. What was the result of that interview with the Minister with regard to the charges ?—■ The Minister of Mines (Mr. Seddon) stated that the company would be fairly dealt with, and that the Mokihinui Company would not be allowed to take any unfair advantage of their position. 307. Will you explain to the Committee whether you or the directors of the company have taken steps to open up the mine so as to carry on operations in a permanent way ?—Most decidedly we. have. .That was the position I was explaining in the early part of my evidence. They prospected to prove the area of the field, and to be sure of opening out in the right place, so that they would have a permanent coalfield before them. We proved the existence of the coal-seam for over three miles along Chasm Creek. Then we went inland, and put down several bores, which proved the existence of the coal to about here [pointing to map]. The coal is dipping from the creek to the Mokihinui River. In putting these bores down it was our object to get the coal as easily as practicable. But these bores we put in proved the existence of a series of faults, running across in this direction [pointing to map], and proved that the coal in this portion of the lease was inferior and faulted. We therefore had to rise in an incline to a height of about 180ft., to get coal on a higher level. That was the last available level at which we could work the coal to advantage. Then we struck coal by means of a rock-tunnel 6 chains in length at about this point [pointing to map]. This coal was rising from the sea, and by putting in level drives we were able to command the whole of this area. We proved that it would be necessary to build a bridge across the creek to tap the coal on the south side. 308. Mr. Morrison.] Could you not drive the mine under the creek, and so obviate the necessity of having a bridge ?—No. Chasm Creek is very deep, and the coal rises. We have to drive again on the other side of the creek. The depth of the creek below the coal-seams is in some places 100ft. 309. Mr. Guinness.] Have you driven the tunnel right along the coal? —We drove about 6 chains through the rock, and then we struck the coal. 310. What distance have you extended into the coal ?—We have driven 8 chains to the creek. 311. Are you going through solid coal all the way? —Yes. 312. What is the thickness of the seam? —It is from 16ft. up to 25ft. or 26ft. in thickness. 313. Mr. Morrison.] What thickness do you take out?—We take out the full thickness, but not in one lift. 314. Mr. Guinness.] What number of men would you employ, assuming the output to be 30,000 tons per annum ? —We would want thirty miners for 100 tons a day. 315. Mr. Morrison.] What are you paying per ton ? —2s. sd. That is what the Mokihinui Company have been paying per ton. 316. Mr. Guinness.] What have you paid for what you have already put out ?—-2s. sd. per ton and a yardage rate, which brings up the cost considerably more. 317. Besides the miners actually engaged, what additional men would you require—truckers, smiths, engine-drivers, &c. ? —The number I have given are the men in the mines required for the output. We would require about seven or eight surface-men in addition—about forty men, in round terms. 318. Would that proportion increase in the same ratio as your output increased ?—Yes. 319. You know something about the distance from Granity Creek to Ngakawau. You were employed in Wallsend Mine before you became an officer in the present company ?—Yes; for two years. I have here the New Zealand Railways—Westport Section—distance-table. In this table the distance from Granity Creek to Ngakawau is given as 2 miles 5 chains. In addition to this, the length of the company's line is about half a mile—another 40 chains. 320. That is the distance ; that letter to you from the Commissioners said a reduction had been made?—Yes; 2s. 6d. Granity Creek, and 2s. 7d. Ngakawau. 321. Hon. Mr. Hislop.] I suppose, Mr. Broome, this estimate is based on present prices ?—Yes. These "prices are higher than we have paid for similar works in connection with the Cardiff Company. 322. I see by the petition that you have paid £29,000 on your works?—That is not correct, and if it is in the petition it is a mistake. I can tell you, Sir, that the works have cost—by that I mean the total expenditure in connection with the works—about £12,000. A T q

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323. How much of that do you allot to the railway ? —I have not those estimates here. 324. Have you not the books of the company hero to verify these statements? —No. 325. What would be the approximate cost of the railway ?—About £2,000. 326. Was there a separate account kept of the cost of the railway ?—We have separate accounts. It is difficult for me to give off-hand the cost of the works separately. I can give you the cost of the contracts let for the work, but in addition to that were the materials we ordered from Home, and bought from the Eailway Commissioners—rails, &c.—so that, the whole thing being in that way, it is not so easy to give particulars. 327. Well, then, about 18 chains cost £2,000 ? —This 18 chains up to the bins, to which the trucks will have to be taken. In addition to that there is a siding 6 chains in length, and a smaller siding 2 chains in length. The total length of the line laid down, including the whole of the sidings, is 44 chains. There is a plan here which shows how that is. 328. I ask you what the cost of the line was : can you tell what the cost was ?—About £2,000 for 44 chains. 329. How was it constructed'—by contract or day-work ?—By contract. 330. You say you have separate accounts in your books showing the cost of the railway ?—■ Yes, there are separate accounts. 331. Can they be produced? —They are in the Christchurch office. They can be produced. 332. Can you explain the discrepancy between the petition which says £29,000 have been spent, and your statement that £12,000 have been spent ? —I am not aware that the petition says £29,000 have been spent. I can explain section 2of the petition. According to the conditions of our lease we had to spend £5,000; in addition to that we spent other £7,000; that brought the amount up to £12,000. We incurred other liabilities, which made the total amount, including the £7,000 and £5,000, £22,000. I can explain to you how the other £10,000 of liabilities were incurred. 333. Can you explain how the £22,000 have been spent ?—I say £12,000. The liabilities, £10,000, are to the vendors of the property. . 334. The petition says it is for opening up the mines. Is that the way the Cardiff Company express themselves when they mean it is £10,000 given to promoters, part of which is to be paid by ..way of royalty, and which does not become due until the coal is raised ? —This evidence has been given by Mr. Hargreaves. I am not here to give evidence on that point. I am here to give evidence from an engineering standpoint, and therefore cannot give evidence on financial matters. 335. You were consulted as to what to put into the expenditure of works ?—They did it in Christchurch, and I was not consulted further in the matter. 336. £3,000 does not become payable until the coal is raised; £5,000 is given in shares, and therefore cannot be called a liability of the company? —I speak as to the expenditure of £12,000. 337. Then I ask that the company should give us the exact statement of their expenditure, if it has any bearing on the case at all. Will you be able to give us this detailed statement ?—I think so. 338. Are there any tunnels on your 44 chains ?—None. 339. Any steep sidings?—No steep sidings. 340. Have you any specifications?—They are lodged in the Public Works Department, and you will be able to get them. 341. You say.you are positive the line could be constructed within £7,000. That is only an approximate estimate ?—Yes. I said that it was not from actual measurements, but from a thorough knowledge of the land and a practical knowledge of railway matters. 342. Mr. Tanner.] The witness stated that he knew the line thoroughly well—the upper section over which it is proposed to run the coal ?—I do, sir. 343. And you stated it was not an exceedingly difficult line to maintain?—Yes. 344. Is that not rather a guarded statement ?—lt is. 345. Can you give us any idea of the estimated annual cost of that one mile and a quarter? — I should be safe in saying that it would not exceed £100 per annum. 346. You know that that country is liable to a very heavy rainfall. Are the small bridges liable to be carried away by floods ? —That is not at all likely to occur. 347. Is the permanent-way in good condition?—lt is only in fair condition. 348. Hon. Sir B. Stout.] In your estimate you put down sleepers at 2s. 6d. Can you get them on the ground at that ? —We got ours on the ground at 2s. 5d., and some at 2s. 3d. 349. Were they of silver-pine ? —Some were of silver-pine and some were of birch. 350. How much were the silver-pine ?—2s. 3d. We got them off our own lease. 351. You say you had a tunnel driven. What did you pay for it?—We had three tunnels driven. Two were driven' for £4 per lineal yard and the other one—6 chains in length—was driven for £4 ss. per lineal yard. 352. What was the size of it compared with the tunnel on the line?—lt was 9ft. wide by 7ft. high inside the timber ; and the tunnel in parts required heavy timber which necessitated giving a heading about 7ft. by Bft. 353. What is the size of the Mokihinui tunnel?—The tunnel is driven exceptionally large as to height. The size of the tunnel as driven is about 12ft. wide by 16ft. in height. 354. That will be more than double the size of your tunnel ?—Yes, in measurement. 355. What is the cost of cutting sandstone per yard?—We paid 2s. 3d. per yard for rockcutting. 356. And your ordinary earthwork, how much did you pay per yard ?—ls. Id. per yard. 357. What were the bridges made of ?—Black-birch. 358. I understand that your line was different to that of the Mokihinui Company. What was the differenca—was your line level?—Our line was fairly level. So was the Mokihinui Company's.

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359. Mr. Morrison.] You said that the Cardiff Company was paying 2s. sd. per ton for coal at the present time. Can you state what price thd Westport Company are paying ? —They are paying 2s. lOd. for winning. 360. Mr. Croivther.] Did I understand you to say that this private line was now in good order?—l said it was in fair order. 361. Did you hear the Commissioner of Bail ways say yesterday that the bridges were not in a very safe condition, and that it would need a large sum of money in a very short time to put them in good repair ? —I did. 362. You say that this Mokihinui line can be constructed now for £7,000? —I say that. 363. Is there any difficulty in the way to prevent another company constructing a railway of two rails alongside the Mokihinui Company's line ? —As I before stated, it would be a very difficult matter to construct another line—for the reason that it would necessitate long tunnels in several places. There is a bluff rising up and extending for 4or 5 chains, and this railway would have to go in for some distance, and raise the line on one side for a good part of the way. The company's line runs along at the foot of a terrace, and the line constructed on this side would have to run on the terrace, as it were. 364. Hon. Sir B. Stout.] Could it not run on the river-side?—No; it could run on the riverside here [pointing to map], but it comes to a very steep terrace of land to about here [pointing to map]; and there is another terrace rising here, along the foot of which the Mokihinui Company have gone, and that would necessitate a long tunnel. The line would then be comparatively easy to construct until this point [pointing to map] was reached, and then there would be another large tunnel. It would be a very costly line to construct. The Mokihinui Company's line occupies the only available site. 365. Mr. Croivther.] Is this line now jutting on very steep sidings, whereby very bad slips may be anticipated ? —The siding is rock. 366. The Chairman.] What is in your opinion the cost of maintenance on the 1 mile 22 chains ? —I think that £100 per annum would cover the cost of maintenance. i 367. Is that a rough guess, or have you worked it out in figures so as to be reliable ? —lt is approximate only. John A. Wilson examined. 368. The Chairman.] You are resident engineer ? —Yes; at Wellington. 369. Mr. Gioinness.] You were formerly engineer at Westport?—Yes. 370. You know the Mokihinui district fairly well?—Yes. 371. For how many years? —I have known it closely for about seven years. 372. Do you know the Mokihinui Company's line from the river to their mine ?—Yes. 373. Do you know the first mile and 22 chains, up to Chasm Creek ?—Yes. 374. When did you last see that ?—lt is about sixteen months since I was there. 375. What condition was it in then?—The formation was in reasonably good condition. The ballast was wanting in many places, and sleepers were defective. The rails were "kinked" a good deal for want of ballast. 376. What about the bridges, the bluff, and the tunnel ? —The tunnel was in good order; the bridges were then being strengthened. There was no danger from any of the bluffs. 377. Would the whole of the 1 mile 22 chains be difficult to maintain, or any portions of it ?— Near the company's wharf, at the lower end, the line is menaced by a bad slip. It costs money from time to time to remove the slips. The other portions are not difficult to maintain, I think. 378. Is the tunnel in fairly good order ? —The tunnel is not an expensive item to maintain. 379. You have had charge of railway construction works, I believe?—Yes. 380. Are you acquainted with local prices ? —Yes. 381. Would you be able to give an approximate estimate of what the 1 mile 22 chains could be constructed for, assuming that Mr. Broome's are the correct quantities ? —I think the price for sleepers is low. The other prices I think are reasonable. 382. The only price you take exception to is the sleepers. Are you not aware that the Government have had offers to deliver silver-pine sleepers at Westport at 2s. 6d. and 2s. sd. ? —No; I did not. 383. What would you, in your opinion, say the price would be, if 2s. 6d. is low for sleepers?— 2s. 9d. each. 384. Hon. Mr. Hislop.] What do you say about bushfelling ?—I think the price here, £1 10s. per chain, is a reasonable one. 385. You are speaking, of course, of prices at the present time?—Yes. 386. You know that the Government railways were estimated at £5,000, and cost £10,000 ?— No ; I did not know that. 387. Hon. Mr. Seddon.] Can you state what the Mokihinui Eailway cost per mile ? You were the engineer in charge ? —I was in charge of the platelaying. 388. Can you state what the line cost per mile ?—Approximately I can. It cost £4,200 per mile. 389. In that line there are some bridges, are there not ?—Yes; one over the Ngakawau, and some smaller bridges. 390. Can you state the class of bridge ?—Over the Ngakawau there is a 40ft. span, and it is about 500ft. in length. 391. Do you remember what the cost of that bridge was, approximately ?—I cannot remember the exact cost. It was about £6 per foot. 392. Do you know the line from the end of the Mokihinui Extension to the junction of the New Cardiff Company to the branch line? —Yes; I know that line,

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393. You have seen the tunnels there at the Bluff?—Yes. 394. Taking into consideration the tunnels and the line complete, what do you think would be a fair cost per mile ? —I think about £5,000 per mile. 395. Will it be a very heavy line to maintain ? Knowing the country as you do, what would be the cost of maintenance per mile ?—For that 1 mile 22 chains ? I think the cost of maintenance will decrease. For the first year or two it would probably be rather expensive; but it will not be so much after the line has been used for a few years. I think it would cost about £250 for the first year or two. 396. There is a route shown which goes in at the Junction : where does that route lead to ?— To Karamea. It is the line right to that place. 397. Will the whole of that traffic go on the Mokihinui Eailway to go on to Westport?—Yes. 398. Were you in charge when the line was first opened for running up goods and passengers? —The line was not opened while I was there. 399. Can you give any evidence as to the probable traffic for goods and passengers ? Would there be any there ?—There would be a certain amount of traffic there. 400. Eon. Sir 8,. Stout.] Can you give an estimate of the cost of a line without taking measurements ? —An approximate estimate. 401. If you were told that that mile and 22 chains cost £16,000, what would be your views upon that statement ?—I should think it would have cost too much. 402. You base your estimate upon the fact that you can get your rails carried to the spot. Suppose the rails came in by river and not by land?—l base my estimate generally upon my knowledge of the cost of laying lines in New Zealand—£l,6oo per mile. 403. Mr. Earnshaiv.] Do you know what was the rate of wages when the Mokihinui Eailway was constructed ?—los. per day. 404. Would that be the same rate on which you make your estimate of £1,600 per mile ? — Yes. 405. Hon. Sir B. Stout.] Does that estimate include platelaying, sleepers, rails, &c. ?—Yes. 406. The Chairman.] What do you base your estimate on of £250 for the maintenance of the 1 mile 22 chains ?—On the number of men probably to be engaged on that distance, and partly on amount of material to be used during the twelve months—such as timber, ballast, &c. 407. Do you know how that compares with the average of maintenance of the Government railways ?—I think it is more expensive. 408. The railway has been constructed, you know, for some time ?—lt has been constructed, but has not been working. 409. Mr. Guinness.] Were you there while the railway was being made?—l was, occasionally. 410. Can you say whether, in your opinion, in the cost of constructing that line then and now there is any material difference?—l do not think there is. Twelve months ago the rates were the same. 411. Mr. Earnshaw.] Do you think the line was constructed in a slipshod, wasteful manner?— I think there was work done which need not have been done. Work was, I have no doubt, done twice over. 412. Mr. Wilson.] You do not think there was full value given for the £16,000 ?—No, I do not. 413. Mr. Seddon.] Who was the engineer in charge of that line ?—There were several; and part of the time there was no engineer there at all. 414. Was the widest part of that work, round the bluff, not a road formerly?—Yes; it was the county track—6ft. wide. 415. Hon. Mr. Eislop.] When you said that the maintenance was more than the average, did you mean more than the average on the Westport Section ? —I meant more 'than the average generally. 416. How would it compare with the Westport Section ?—lt would cost more than the Westport Section. Mr. H. J. H. Blow examined. 417. Mr. Guinness.] You are Under-Secretary for Public Works? —Yes. 418. Were you in the Public Works Department in 1888, when the Order in Council was issued fixing the rates for charges that the Mokihinui Company were authorised to levy on traffic upon their line?—l was. 419. Do you know whether that proviso in the Order in Council relating to where the line is connected with the Westport Section—whether that 20-per-cent. increase refers to the whole through traffic or only to the portion of the railway held by the Mokihinui Company ?—I think, as it stands, it refers to the short portion of the railway only—that is to say, the Mokihinui Company's own line. 420. Did the Mokihinui Company deposit in the office of the Minister for Public Works an estimate of the cost of the construction of this line ?—Yes. Every company proposing to construct a line has to do so. 421. Can you produce that estimate to the Committee? —Yes. 422. What was the estimate?—The line was authorised in two sections. The plans and estimate for the first section were sent in on the 29th June, 1887. It was for a length of 2 miles 35 chains, and amounted altogether to £14,616 19s. This included £1,000 for an engine and £3,000 for trucks. The estimate for actual construction was £8,116 195., exclusive of rails and sleepers, and £2,500 for rails and sleepers, making a total of £10,616 19s. for construction. That is the upper section. It terminates at Coal Creek. Paringa Creek is, I think, another name for Coal Creek.

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423. Will you give the Committee now the estimates lodged for the lower section?—The second estimate here seems to be less than the first, and I can hardly see how that could be. The total estimate is £8,630. That included £1,650 for trucks, £350 for an engine, £250 for bins at the mine, and £450 for bins at the river. 424. I want you to give the Committee the estimated cost of the construction of the railway, inclusive of rails?—£s,93o. 425. For what length of line is that ? —For a mile and a half. The amounts are : Formation, £3,500; rails, £1,400; laying permanent-way, £250; ballasting, £480; contingencies, £300. 426. Is that signed by an engineer?—Yes; it is signed by Thomas Thompson, who was the county engineer. 427. Mr. Earnshaw.] You said that £10,616 was the total cost put in by the company to start with, and the Commissioners said that the line cost £16,500. Do you know of any other lines in New Zealand that have cost that much in proportion over the original estimate ?—I am afraid I must say that I do. Mr. Eodeeick McKenzie, M.H.E., examined. 428. Mr. Guinness.] You are a contractor ? —Yes. 429. During your experience you have constructed rail way-works?—Yes ; very often. 430. Do you know the Mokihinui Company's line ?■—Yes. 431. Have you known it for many years ?—Yes; more or less ever since it was under construction. 432. Do you know the facilities that existed when it was constructed?—Yes; there were ordinary facilities for its construction. The rails were delivered at the river, and the timber was growing on the ground for the sleepers and bridges. 433. Can you form an estimate of what you consider that first mile and 22 chains could be constructed for ?—I think, approximately, Mr. Wilson's estimate would be a fair one —from £5,000 to £6,000 per mile. 434. .Eon, Mr. Hislop.] Have you considered the question of the relative rates of the two companies as to haulage and way-leave ?—Yes. ~ 435. Have you formed any opinion? —I prefer not to give my opinion as to what is a fair charge. I decline to express my opinion on that point. 436. Then I suppose we may take it that this railway is rougher than the usual West Coast sections? —Oh, no; there is a little difficulty with slips near the wharf. 437. Is not the first mile more expensive than other lines —on the Westport sections, for instance ?—With the exception of the tunnel, no. 438. Ido not want you to except anything. I want to know whether this mile and 20 chains is not more expensive than the average West Coast sections ?—No, I do not think it is ; in fact, a yery great portion of it is very easy. 439. Is there an average of 3 chains of tunnel to the mile over there ? —No ; but there is no more than 3 chains of bridges to 3f miles.

Tuesday, 14th August, 1894. Mr. James McKekeow, Chairman Eailway Commissioners, examined. 1. Mr. Guinness.] Can you tell us whether there has been forwarded the memorandum received from the Mokihinui Company, showing the cost of the railway ? —lt is among the printed documents now before the Committee. The letter is No. 64, and gives the amount of the cost of the line. 2. When the Commissioners received this statement, did they in any way submit it to any one for verification ? —No. 3. Did you communicate it to the Cardiff Company, or any of its officials, to ascertain whether they had any objection to it, or agreed with it ?—No. 4. It is a fact, I believe, that 1 mile 56 chains of a branch line at Waimangaroa is also run by the companies ?—Yes, for the purpose of bringing coal from Con's Creek. 5. Is there the same amount of shunting of empty trucks required at this piece of branch line as will be required on the Westport-Cardiff Company's branch line?—lt is practically about the same. 6. Do you express the same opinion with regard to the shunting required at the Mokihinui's work ? —Yes; their sidings are not quite finished, but they will be altered. The work is simply putting the empties on the sidings and taking the loaded wagons off. That is done by the respective companies. They bring full wagons down; we take them off. 7. Mr. Wilson.] Is that done by an engine?—lt is done by an engine at the Mokihinui Company's line. 8. Mr. Guinness.] The companies, I believe, charge Id. per ton for haulage along this branch line of 1 mile 56 chains ?—Yes; Id. per ton for the distance. 9. At Ngakawau there is a coal-mine called the Westport Wallsend Mine, I believe?—l think so; it is generally called the Ngakawau Mine. 10. There is also another mine being opened belonging to the Westport Coal Company?—■ Yes. 11. What is the length of the branch line from the Government line to the Granity Creek Mine? —It belongs to the company. It is just in course of construction. Tiiey are not delivering coal yet.

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12. You saw the letter whiqh Mr. Broome put in evidence, showing that the charge per ton would be reduced to Id. per ton between the Government line and the Granity line ?—I will explain how that is. For the first eight miles on the Government line the charge is Is. lOd. per ton ; for each mile over the eight miles fd. per ton per mile. The charge to Granity Creek, to put it exactly, would be 2s. 5-Jd. a ton. We do not count halfpennies on the railways, we always make it a penny; so that the charge to Granity Creek from Westport is 2s. 6d. a ton. The charge to Ngakawau is exactly 2s. 7d., as per scale. That explains the apparent incongruity, if I may call it so, very frequently referred to at the former sittings of the Committee, as to carrying coals over two miles of the line at Id. per ton. 13. I understand your explanation to mean that the Government have charged the through rate up to each of the mines of these companies ?—The Granity Creek Mine, when they do deliver coal, are alongside the railway-line. Their sidings are on our line. In the case of the Ngakawau Mine, we never brought any coal from it, except on one or two occasions, when they filled their bins. 14. You are prepared, according to the letters, to carry the coals from the companies' mines at the Government through rates ?—I am not clear on that point. I think the Ngakawau Company were to deliver their coal down on to the sidings of the main line. I would not be positive on that point. 15. One of the private lines is 2 miles 45 chains?—Only one quarter of a mile. I went over it some years ago, and it certainly is not two miles. Ido not know the distance from the main line up to Granity Creek. It belongs to the Westport Coal Company. We do nothing at all there. When they bring their coals by little trucks down the incline they empty them into the staiths on our sidings on the main line. 16. Does that include a certain portion of a private line of about one-third of a mile ?—You are again referring to the Ngakawau Mine. It is not the third of a mile. I should say it is about a quarter of a mile from the Government line. 16a. From there they pass on to the Government line about a quarter or a third of a anile, and you. charge, through rates?—l am not quite sure of that, but I could ascertain it for the Committee. They were opening up the mines, and were anxious to get the coals to market. I think we sent .pur engine up. It is some years ago, and I would not like to be positive, but I can easily ascertain if the Committee wish it. 17. Will you explain to the Committee why, for haulage over 1 mile 22 chains of the Mokihinui Company's line on to the end of the Government line, you charge 3d. when you only charge Id. over one mile distance ?—The reason is this : On the Waimangaroa Branch, the Westport Coal Company's private line, when the output was small, we charged 9d. a ton where we only charge Id. a ton now. The Cardiff Company's output will also be very moderate for a year or two. We have to send the engine up shunting it may be half a dozen wagons and taking out half a dozen loaded wagons. We take them to the Mokihinui Station and place them on the siding there. We have to do the same for the Mokihinui Company's Coal-mine, the business in each case being of very small dimensions. Hence a higher charge was made per ton for the smaller quantity of output. 18. Why did you make the haulage rate of the Mokihinui Company the same as that charged to the Westport Company?—l have no doubt when the time arrives the persons in charge of the railways will make the rate equally as low as it is On the Westport Goal Company. You must bear in mind that this agreement is only for twelve months. Last year the output of the Westport Company was 240,000 tons. The Commissioners considered that if the Cardiff Company turned out 15,000 tons for the first twelve months it would be as much as might be expected. 19. Do you not think that the putting on of a large charge at the initiation of a company is likely to cripple it ?—Undoubtedly; but all industries have to face such contingencies. It is like rearing a man- —the child has to go through teething and all infantile troubles. It is the same with a company. 20. Do you remember a company called the Wellington Coal Company ?—Yes. 21. And that company brought down coal from the neighbourhood of Conn's Creek to the Government line, a distance of 1 mile 56 chains ?—1 mile and about 3 chains. 22. What is the charge per ton from Westport to Conn's Creek ?—2s. Id. per ton. 23. Do you know what it was in 1890,1891, and 1892?—Yes ; it would be 2s. 3d. then. 24. Did you not, during those three years, when the Wellington Company was sending coal over its private railway and down the Government line, only charge them 2s. 4-J-d. a ton ?—lt would be about that amount. 25. Did not the Commissioners pay over to the Westport Coal Company for way-leave over 83 chains of their line lfd. ?—-Very likely. If there were any coal to bring from the Wellington Mine, which there is not, it would be Id. per ton for way-leave. 26. Is there any restriction as to the quantity of coal ?—No. There were just a few workingmen taking out a few hundred tons of broken coal to make into coke to send on to Port Pirie. It was a mere temporary arrangement. The Westport Colliery Company were quite willing to give the men every facility to take the coal out. It can hardly be quoted as a standard to regulate our way-leaves. 27. It was in force three years?—lt is in force now. The men only took out some 4,000 or 5,000 tons altogether. 28. Was the quantity not 15,000 or 16,000 tons for three years ?—I did not know it was so much as that. 29. Do you not think that increasing the rates on a new company opening up and developing a mine will have a tendency to decrease the traffic rather than increase it—l mean the general output from the coal-mine? —Decidedly it will have that tendency on a particular mine; but it will

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have very little to do with the output of the Westport coalfields generally. There is just a certain market for coal in New Zealand, and it will he supplied whether any one company is shut up or not. 30. Do you take into consideration the advisability or otherwise of not leaving the whole coalsupply in the hands of one company ?—We do not consider that at all. Ido not wish to imply that in my remarks. 31. Are you not of opinion it would have a beneficial effect to try to encourage other companies to start ? —lt would be better to have more than one company. 32. Do you think this placing of higher rates will have a tendency in that direction ?— Decidedly; the higher the charge the less profit, and the less encouragement to work the mine. 33. Have you considered the intention of section 20 of the Eailways Act ? —Yes ; it does not apply very much in this case. I would like the Committee to consider this : The Commissioners were empowered by statute to fix, as between two companies, what one company should pay for the use of the property of the other company. The Commissioners carried that out to the very best of their ability. 34. Did you call the evidence of experts or others to value this line of 1 mile 22 chains ?—No. 35. You accepted the statement of the Mokihinui Company that it had cost the amount they stated ?—Yes. 36. Did your co-Commissioners agree with you in the charges made ? The Chairman : That is not a relevant question. Witness : All questions relating to the railways of the colony come before the Board. The Chief Commissioner can impose his opinion on his colleagues, but if he does so he must give written reasons for his opinion to the Government. It must be entered on the Commissioner's minutes, and a copy sent for the information of the Government. 37. Mr. Guinness.'] Why do you estimate that 7 per cent, would be a fair amount of interest to allow on the capital cost of the line ?—When the directors of the Mokihinui Company interviewed* the Commissioners they informed us that they were paying 7 per cent, on their debentures which supplied the money for the railway. 38. That.is the reason? —We also considered whether it was fair to charge the Cardiff Company 7 per cent. We came to this conclusion : that any other company wishing to raise money on-.a similar security would require to pay the same amount. 39. Did you not also take into consideration the output ?—No; we are not bound to do so. Every railway is a necessary adjunct of a mine, and had the Mokihinui Company not finished their line the Cardiff Company would have required to build a railway, or vice versa. It was of equal importance to either company to have access to the Government line, and we therefore considered that each company should be equally responsible. We considered this a fairer decision than what is embodied in the Act relating to the Ngakawau extension, which fixes the contribution of each company on an acreage basis, thereby making the Cardiff Company to pay more than the Mokihinui Company, which, I may say, is not quite fair. 40. Did you take the acreage rate ?—We did not do so; the statute did so. 41. You do not think that fair?—No, I do not think it is very fair. 42. You do not take the output condition?—No ; as a matter of fact, the output condition of the Cardiff Company is 10,000 tons minimum for this year, as against 25,000 tons of the Mokihinui Company. 43. Did you in any way take into consideration the passengers and goods-traffic over each of the private lilies of the Cardiff Company ?—We did; but the revenue from them is very small. Hon. Sir B. Stout: It was £6 12s. 9d. per month for the last four-weekly period. 44. Mr. Guinness.] Then, if we take one month, can you give us the highest margin?—We have only worked it one month; the company worked it before that. Then, for four weeks, the haulage of passengers and goods was £6 19s. Bd. For the four-weekly period ending 21st July there were just sixty-eight passengers carried. 45. You can give us no information as to what was the traffic when the works were in full swing ?—No. 46. Do you know that that section of railway would serve a population of upwards of 800 ?—I am surprised at your stating the population so high. Hon. Sir B. Stout : One passenger from Karamea a month. 47. Mr. Guinness.] One passenger a week. Are you not aware that in the neighbourhood of these coal-mines there are quartz reefs ?—Yes ; I believe there are some few miners there. I was there three years ago, and there were several miners. 48. You cannot speak from a visit within the last six months ?—No. I may explain to the Committee with regard to the Waimangaroa branch, from which all the Westport Colliery Company's traffic begins, that the receipts for the twelve months ending 31st March, 1894, for passengers, merchandise, timber, and everything for the mines, came to £400, of which one-half was paid to the Westport Coal Company for way-leave over their lines. The charges on this branch are Is. 3d. a ton to Con's Creek for general goods—that is, from the Waimangaroa Junction; passengers, 7d. and 5d., according to class. 49. The Chairman.] What proportion would these prices bear to. the prices you fix on the Mokihinui Company ?—They are about one-half. 50. Mr. Guinness.] The Cardiff Company is one-half? —It is twice. The distance is greater on the Mokihinui Company generally. 51. The Chairman.] It would stand this way : that one-half the amount of the traffic on the Mokihinui line would return as much revenue as twice the amount on the line of which you have given us an illustration?—Yes, that is so. 52. Mr. Guinness.] What proportion of that amount is returned to the Westport Coal Company ?—About one-half.

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53. That is for the use of their branch line?—Yes. 54. "What is the usual rate charged for goods from Westport to Con's Creek?—lt depends on the class. It is Is. 3d. on the Westport Company's private lines for all goods, no matter what class; but on the Government lines, of course, it is according to Classes A, B, C, D. 55. Can you give us an illustration of the through rates—the proportion of through rates charged on the private lines, and what proportion on the Government lines ? —I really cannot carry the calculations in my head. On class A goods, such as drapery and groceries, it would be 7s. 6d. per ton, or 9d. a mile. 56. Mr. Earnshaw.] Had you any reason to believe that the money was spent by the Molrihinui Company in the construction of the line?—l believe the amount includes cost of construction. It would include supervision and everything. 57. Mr. Flatvian.] I understand that there was a certain market for the output of coal. The cheaper we could get it run on our lines the more we should sell against the imported article ?—I recognise that as a general principle ; but the difference between Is. and a few pence on any one line would make no difference whatever, in my opinion. 58. Mr. Wilson.] What is the cost per mile of keeping up the Government railways ?—Last year it was £140 per mile. 59. What is the cost to the Westport Company ?—lt was much greater. There was a very extraordinary expense on account of considerable repairs to the old staiths, which are a portion of the railway. There was the cost of sleepers, rails, ballasting, and keeping the property in order. 60. What is the value of the West Coast line?—l was speaking to Mr. Lowe, and he told me £170 a mile. That may be taken as the average cost per mile of maintenance of the Westport Eailway. t 61. Mr. Morrison.] That does not include staiths?—No ; that is taking the staiths off. 62. Mr. Crowther.] You reckoned that 240,000 tons per annum of coal would be taken out of the mines. How many passengers would be carried on the lines?—About 7,000 in the year. If we divide that by thirteen it would be about 540 of an average for each four weeks. The population, according to .the census of 1891, for Denniston and all round Mokihinui was a little over 2,000. 63. You say that when operations were begun on the lines they paid 9d. per ton haulage ?—■ They paid Is. 3d. for the coal from Con's Creek down the mam line, a distance of 1 mile 56 chains. The Westpoit Company paid Is. 3d. over the whole one and a half miles, of which 6d. went for way-leave over the one mile of the Wellington Company's line, and the other 9d. went to the Government for haulage. 64. That charge is now reduced from 9d. to Id.?—There was a reason for starting it at 9d. Mr. Carruthers, the late Engineer-in-Chief, averaged the Wellington Company's line at £5,000, and, considering the output, he advised the Government to charge 6d. a ton, in addition to the 9d. for haulage. 65. Have the present managers of the railway made their calculations on the same basis ?— Yes. 66. For the matter that is now before us ? —The question of way-leave does not come in. The Westport Company having bought the Wellington Company's line they do not pay anything at all now. 67. If it could be shown to you that this railway should have -been valued at £8,000 instead £16,000, what difference would that have made in your calculations in making the charge to the Cardiff Company ? —I do not think it would be fair to say what the line could be made for now. When the line actually was made there were great quarry ings and cuttings in a portion of the line. It was only approachable by sea and very small bar harbours. It was a very rugged country indeed. It is very rugged even now after you see the railway made. I cannot say for certain, but I have heard that there were a few mistakes made in laying out the railway, as there always are in every new work, and I have no doubt that it actually cost the company what they say it did cost-—that is, adding the interest on the money during the time of construction. 68. You heard one of the local engineers say he was quite certain it could be constructed for £6,000 or £7,000. He said certainly for £7,000. What difference would that make in the amount the company would have to pay ? —lnstead of being required to pay on the basis of 7 per cent. (£525) the difference would be a little more than one-half. 69. Hon. Sir B. Stout.] Would you consider that a fair interest to charge a railway that has a short life ?—That would depend on the life. 70. Then, would not the interest charge be regulated by the possible life of the capital ? —Yes ; and in the matter of sinking fund. The Mokihinui Company informed the Commissioners that the lease would only last for thirty-three years. 71. Suppose the coal does not last that time, what would be the ?value of the railway; Would it pay to run it ?—lt would not pay to run it at all without coal. 72. The Mokihinui line is valueless for country traffic and passenger-traffic, and if the coal fails it will have to shut up ?—That is so, decidedly. 72a. I understand that this award you have given is only for one year, and that at the end of the year you could reduce the rate ?—Yes, I said so. 73. The Chairman.] Is there any reason for supposing that they will not have a renewal of their lease at the end of thirty-three years ?—They have entered into a contract with the public that they are to have this relief for forty-two years from the time they began. When the time is up the railway becomes the property of the public. 74. Mr. Morrison.] It is a terminable lease for forty-two years ?—-Yes; thirty-three years from now. 75. The Chairman.] Does that refer to the whole of their line?—Yes. If they do not work the line the Government can step in and take it from them.

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76. "What, in your opinion, was the value of the Mokihinui Company's railway extension until the line was made to Ngakawau ? —lt was comparatively of less value then than now, for the reason that the Mokihinui bar is very shallow, and only admits of bottoms carrying 400 or 500 tons. This means paying high freight on the coal. They would be very heavily handicapped as against the Westport Coal Company. 77. Is it a fact that the expenditure of £36,000, for the interest on which the Westport Harbour Board is really at the present time responsible, has given a value to the Mokihinui Companv that it never had before?—Decidedly; it raised the value of it very much. The WestportCardiff Company has 1,800 acres and the Mokihinui Company 1,757 acres. In that proportion they have to make up any deficit at 5 per cent. 78. Now, with regard to one matter you referred to, you say at one time the Westport Coal Company paid 9d. per ton for what it now receives for Id.?—Yes; the Westport Company paid that amount for the haulage. 79. Does it not strike you, in connection with a matter like] this, that encouragement should be given to a weak company to overcome the initial difficulties that always present themselves in such cases rather than give encouragement when it is strong ?—Yes, I think that is a very correct principle as far as you can work it out; but I have already explained what the Commissioners had to decide was as between two companies. Suppose, for illustration, we had been very much impressed with that opinion, and had decided to charge less to the Cardiff Company than is now proposed, we would simply have been fostering that company at the expense of the Mokihinui Company. 80. I think you charge both the Mokihinui and the Cardiff Companies too much ?—That is for haulage. Id. will pay better on the output of the Westport Company than 3d. or sd. on the Mokihinui and Cardiff outputs. The Mokihinui Company only sent 6,000 tons of coal last year. 81. You said there was only a certain market for the coal from the West Coast ? —Yes. 82. Of course you admit the more competition there is in connection with the coal the better it is for the public ?—Yes, decidedly. 83. Are you aware that the Westport Coal Company have Canterbury for a monopoly, and everybody who wishes to obtain Westport coal must go to the Westport Company or their agent in order to sell it ?—Of course they must, because it is the only mine that is turning out any quantity. The Mokihinui Company is the only other company that has taken out any coal at all. 84. You are not, of course, aware that the agent of the Westport Coal Company in Christchurch is authorised to state that for the Blackball Company they will open a retail branch there ?—I am not aware of that. 85. You are aware that at the present time about 125,000 tons of coal from Newcastle are imported into New Zealand ?—Yes ;it has been about that for a great number of years. For the last twelve or fifteen years it has been about the same, as an average. 86. I understood you to answer that, in accepting £15,000 as the cost of the line, you had included interest on the cost of construction and other charges ? —Yes. We did not assume that £15,000 was the proper value. We took £16,500; but suppose we took £15,000 as the cost, then on that basis there would be £1,050 of interest to pay. 87. Why should there not be a through rate from the point where you first attach your engines to the trucks down to Westport ? —The reason is this : We have a great deal of shunting to do at this place —putting wagons in and taking the loaded ones out—then taking them down to the Mokihinui Station, and making up the train to go on to Westport. That service, in many railways in New Zealand, is done by the private companies. It was just a question whether we should advise and compel the companies to do that or do it ourselves ; and the reason we advised that the Commissioners should do it was this : Speaking of the Cardiff Company, they have not got an engine. Mr. Broome said: "If the Mokihinui Company has to work the line we shall always have to come in second. They will bring their coal to the Mokihinui Station, and we will be left at their mercy. I beseech you to work the line so that the Cardiff Company shall have fair-play." That was a reasonable view to take, and the Commissioners, on that view, advised the Government that under all the circumstances they thought it would be better for the Government to work the line, so that both companies should be on an equal footing. 88. If they estimate the Cardiff Company's output of coal at 15,000 tons, how much do you think will be earned on the line from passengers' and ordinary goods' fares?—l do not think it: would exceed £200 for the first year, supposing private mines were in working-order : £100 would go to the Mokihinui Company, and the other half to the Eailway Commissioners. 89. Mr. Guinness (through the Chairman).] You stated that the grant of this railway-line to the Mokihinui Company expired at the end of forty-two years, when it would become public property?—Yes. 90. Can you produce to this Committee any document to that effect ? —I think so. The lease states that should the company through any cause fail to fulfil the conditions contained therein the Government will step in and take the whole property. 91. That is in case of breach of conditions ?—Yes. 92. Is there any provision made as to what shall take place at the end of the term supposing the company fulfil the conditions ?—No ; not that I know of. 93. You do not think that the General Government would take possession of this railway from a private company or individual, worth some £20,000, without hearing about it ?—I may inform the Committee, as bearing upon this point, that there are a great many sidings in connection with the Government railways, and the putting down of these sidings is at the expense of the parties into whose property they lead. As to these sidings, we can make no agreement for a longer term than ten years. If at the end of the ten years the parties do not require the sidings any further they become the property of the Crown. s—l. 9.

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94. This is under distinct arrangement ?—Yes. 95. There is some difference between £20,000 and a siding that cost £25? —Private sidings in many cases have cost hundreds of pounds. 96. Hon. Sir JR. Stout.] Is there a lease in existence ? —Yes. 97. Is not the Mokihinui private railway made under a section of the Act ? —Yes. You can have the lease by applying at the Mines Department. 98. Mr. Guinness.] You said the cost of the Mokihinui Eailway included interest on capital during the construction, and office charges ?—Yes. 99. I want to know if, before you came to a conclusion as to the cost to the company oi 1 mile 22 chains of line being £15,000, you saw any detailed particulars or items as to how that amount was made up'?—No. 100. You say " No " ?—No. 101. How can you say it includes interest and office charges?—The directors of the Mokihinui Company came to the office to interview the Commissioners on that and several matters which I have in recollection. What I have stated is from information received from them. Mr. W. H. Hakgreaves further examined. Witness : I put in a document notifying a claim for deficiency upon the Westport-Cardiff Coal Company amounting to £459 16s. 6d. at the Ngakawau Extension. This document was received in Christchurch on the 11th. I also put in this copy of a letter addressed to the Eailway Commissioners, dated 13th August, 1894. This seems to me to be a pertinent question for this Committee to deal with, and I wish to put the document in evidence. I have also to put in a copy of a letter from the Mines Department, dated 26th July last. It appears to have remained in Wellington until Saturday last. It was handed to me on Sunday. 102. Hon. Sir B. Stout.] Where was it addressed ?—To Mr. Hargreaves, Christchurch. It ■was left in the Occidental Hotel here, and not posted. 103. When was your petition presented?—lt was presented on Ist August. The letter had , not .been sept on to Christchurch. Hon. B. J. Sbddon, Premier, examined. Witness : This question of the tariff, in respect of the user of a portion of the line belonging to the Mokihinui Company, came under my notice first shortly after the Eailway Commissioners had arranged the first tariff. I then went into the matter carefully, and I came to the conclusion that the rate fixed was out of proportion to what was charged on other lines similarly situated. For instance, take the Midland Eailway contract, with the schedule of rates there fixed. By the contract the company cannot charge more than 20 per cent, above the rates charged by the Eailway Commissioners themselves on one of their lines. Now, I take it that this company's line should be treated the same as a district railway under the Act, or the same as the Midland Eailway Company. To charge the company at the rates then proposed, I considered, was not in keeping with what had been done in respect of other railways. It was out of proportion in respect of the users where they had a right-of-way over the railways from the other railways. It was subsequently discovered that what was done was ultra vires, and, of course, there was an end of the contract. That agreement was only made for a year, and, of course, it would take longer than that before the line would be used. The next phase of the question to which the attention of the Committee should be drawn is this : A large sum of public money was expended in constructing the line from the Ngakawau so as to join on to the company's line. Originally the traffic was by sea ; everything was taken away by steamer from the Mokihinui. By the expenditure of £36,000 of public money the properties of both the Mokihinui and Cardiff Companies were made valuable. Both companies proportionately benefited by the expenditure of that money. I may here say that the Bill before the House contained a clause to the effect that if the railways did not pay 5 per cent, the companies were to make up the difference. The only two companies that could make up the difference were the Mokihinui Company and the Cardiff Company. The next phase of the question was this: There was a large belt of coal in the lease which the Cardiff Company had applied for. I sent down Mr. Gordon to take that piece of coal country off the Cardiff Company's ground and give it to the Mokihinui Company, thus considerably enhancing the value of this company's mines. Then the question arose as to the working of their leases. I stated that output conditions should be laid down and adhered to, that the new leases should be granted under the new Coal-mines Act, and that 5 per cent. should be the percentage payable. I feared that the Westport Company and other companies would absorb these other companies; and leave the lines and the whole coal to be worked by monopolists. I safeguarded that to a certain extent by requiring that the proportion of payments should be first fixed. I considered it an advantage to the colony that both these companies should be kept separate, and both companies allowed to send their coal to market on something like fair terms. Of course, the New Cardiff Company had held a large piece of country for some years unworked. The excuse was that they could not get their coal to send it away. The Mokihinui Company were entitled to take the coal and send it away. That company bought a steamer called the " Lawrence," but she was wrecked; and, of course, both companies and the coal were locked in. The Mokihinui Company made an attempt to get the coal away by that steamer, but there is no doubt that that method. would never have been successful. Both these companies had a value given to their properties by the expenditure of public money to the extent of £36,000. Then, the Mokihinui Company included in their losses the loss of the steamer "Lawrence," and the money they expended in connection with their line's, but the view the Government took was the same as applied to the Midland Eailway Company and the district railway companies—that if any other persons want to use their lines they simply have to pay them the ruling rates. That would avoid all contention in connection with the lines. It is simply a question of what the thing would cost. The money spent oil

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the Mokihimri Company's railway has been frittered away. Well, of course, that means maladministration ; and we say to the company, "You are not going to punish the colony." That is what it would amount to. The question is, What would be the cost of the line at the time ? Taking the wages then ruling, what would it cost to make that piece of line, and what would be a fair rate of interest to pay? If you take it at £15,000, and 7 per cent, upon that amount, in that case there would be a margin for sinking fund, even supposing the output of coal kept at the minimum rate. What guided me in coming to a decision was tnis : This is the only piece of line that will tap this large extent of country for years to come. When we were working the line between Ngakawau and. Mokihinui, after we made it, we conveyed goods and passengers. 104. The Chairman.] Who do you mean?—l mean the Government and the Public Works Department. We worked it before the Eailway Commissioners. There will also be a good sum of money received for goods and passengers on the Mokihinui Company's line. 105. It is stated that the revenue would not be more than £200 a year, and of that amount the Government will take one-half ?—No ; the route taps the whole of the Karamea Valley, where a good deal of settlement will take place in addition to the number of people working these coalmines. I cannot understand how the railway is only to bring in £200 a year. Now, take another position. First of all, the whole of the company's line was offered to the Government at £21,000. When we were speaking about the first contract with Mr. O'Conor, he said : " I think you will find it cheaper to let the Government buy the whole of the Mokihinui Company's property for £21,000." The whole line, lock, stock, and barrel! That was the amount I was told it had cost the company. I cannot see how the company can state that the part of the line up to the Cardiff Company's mine has cost what they have stated. The County Chairman, Mr. O'Conor, was also chairman of the Mokihinui Company, and, without the proper consent of the County Council, the company took charge of everything and made the railway as they liked, leaving the people to get along as best they could. You will find the part of the line near the bluffs the most expensive portion; but the local authorities had spent a good deal of money in making tracks round this expensive part of the line, and of these tracks the company took advantage. When the Bill to validate the line was brought in I blocked it until the company consented to make a road outside for the County Council. That is how I came to know of the dispute about the railway going on the right line. If this part of the line cost £15,000, we cannot see where they put the money, unless it was deliberately thrown away. To handicap any company developing a colonial industry is to punish the Crown. It is a loss to the colony if the company does not work the line upon the connection of which with a port the colony has spent £36,000. To keep up a sort of competition with different companies, thereby preventing the bringing down the price of coal to the consumers throughout the colony, I have no hesitation whatever in saying, is absolutely wicked. In Wellington, 395. per ton is paid for West Coast coal. In Wanganui, it is over £2 per ton. The coal is put on board the boats at Greymouth at 10s. per ton, and at Westport at 11s. Where does the money go between the coal being shipped and getting to the consumer ? I say, then, if you block either of these companies, you are allowing other companies to enjoy a monopoly. If you give a chance to these companies to compete, then there is a prospect of the people of the colony getting the benefit of it. If you choke off either of these companies it must result in an injury to the colony. I may say, however, that I hoped to have adjusted matters before I handed them over to the Eailway Commissioners. I was approached by both parties; I asked them to adjust their differences as far as possible, and then I intended to have stepped in a3 umpire. The Mokihinui Company said they had not the means to find the rolling-stock that was necessary to carry the coal; they were willing that the Eailway Commissioners should do it. When the Eailway Commissioners went over their line they were very much dissatisfied with it. It could not be used with safety in the condition it was in then, and the Commissioners insisted upon certain expenditure taking place before they would use it. That, I believe, was done. The New Cardiff Company first said they were quite prepared to work their own traffic, knowing the jealousy there would be, and the probability of their being hampered if a rival company had to take the coal. It would take out its own coal, leaving their wagons. Eut they also were satisfied that it should go to the Eailway Commissioners. Under these circumstances, application was made and the use of the line vested in the Commissioners; but I will say this : had I known that the rates that had been fixed by the Commissioners would have been adhered to I certainly should have held the power until such time as fair rates had been fixed, and have then handed it over. 106. Mr. Guinness.] Do you know the terms on which the Mokihinui Company hold their leasehold ? —Yes. 107. At the end of their grant or right does it become the property of the Crown?—They have the lease, and can retain it so long as they keep their right good, although they may not be taking any coal out. They have not surrendered that lease. It is marked on the map (Section 5). I think the company were right, and I did not propose any relinquishment of that lease. 108. When that lease expires, have the company any right—equitable or legal right—to get a renewal of their grant from the Government if the conditions have been fulfilled?—lf I were in office I should certainly give them that right. 109. Do you think any Government would take possession of property costing over £21,000 without compensation ?—By legislation the Shag Point Eailway became vested in the Eailway Commissioners; but, owing to the legislation of last session, by Order in Council, the railway can be revested in the original owners. The Government can give it back to the equitable owners. 110. Mr. Eamshatv.] Do you know what it cost to make the piece of road the County Council took?—They told me that it had cost more than £1,000 to widen the road so as to make the same suitable for traffic. 110a. Has the Mokihinui Company made that road yet ?—I could not say. There is an agreement between them which both parties told me was satisfactory, so I considered the matter ended.

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111. Have they made the road?—As far as I know, they have not. There is an agreement in execution which both parties were agreeable to. That particular piece of land through which the line runs was never vested in the company. That was part of the arrangement made. 112. You stated something about your engineer's estimate of cost being entirely different; what was that estimate ?—About the same as Mr. Wilson stated here the other day—about £8,000. 113. Mr. Morrison."] You stated that this line was originally made by the Mokihinui Company to connect with the wharf?—Yes. 114. And that it was their intention to export their coal by steamer?—Yes. 115. The Government was to assist, I suppose, in bringing the coal into market. The colony expended £36,000 in forming the junction witli the railway ?—Yes. . 116. Of course that enhanced the value of the new Mokihinui branch railway. It gives the branch line an increased value by connecting it with the main line?—No. We are spending money on our railways in different parts of the country. It might be said that the colony's property had been enhanced in value by the Midland Bailway Company having made forty-six miles of railway from Brunnerton to Beef ton, the whole trade of which comes from our line. It would be grossly unfair for either the company or the Eailway Commissioners, because they hold the key to the position, to levy such a rate on any traffic coming over that piece of line as would make it prohibitive. These private district railways should be treated the same as the others. 117. The property of the Mokihinui and Cardiff Companies would not have been of the same value as now had not £36,000 of public money been expended. You have enhanced the value of the Mokihinui Company's property ?—No. For purchasing purposes, with the power we had, it does not enhance the value. 118. If this line had not been made, the money the company spent on that railway was thrown away ? —lt was absolutely dead capital; but when the connecting line was made it resurrected that capital, and brought it into a liquid state. 119. Are the rates less at some coalfields than at these two places ? —Certainly ; you would block our coalfields if you allowed the rates asked for. 120. If the Mokihinui Company's coalfield and lines have been enhanced in value by the expendi-ture-of the £36,000 of public mone}', then the company is not justified in putting on a prohibitive rate against the Cardiff Company ?—The Mokihinui Company might use the same argument as the Cardiff Company. But we are spending some thousands in opening the Karamea Valley for settlement. There will be an increased trade opened up, and it is bound to pass over the Mokihinui Company's line to get down to Westport. 121. Another statement was made that the Mokihinui Company had expended more money than was necessary in making this line? —If they say they spent £15,000 on this part of it, and produce their books to show it, I will not deny their statement; but at the same time I should wonder what they did with the money. They have themselves stated, however, that money was absolutely thrown away ; that there was mismanagement; and the shareholders complain very much about their money having been thrown away. 122. With regard to the breaking-up of the monopoly existing with the Westport Coal Company, have the Mokihinui and Cardiff Companies taken any steps in the past to try to break up this monopoly ? It would appear that the output of the Mokihinui Company last year was only 6,000 tons, whereas the Cardiff Company placed in their bins 8,000 tons a month. That does not look as if they desired to break up a monopoly ?—The Mokihinui Company came in at a critical time. The Commissioners (and I gave them credit for it at the time) accepted their tender for supplying coal. The company were then doing their best, but there was a want of capital. The company was handicapped, and there were also dissensions among the shareholders, some of whom showed a disposition to keep the company back. I should not be inclined to deal with the company severely, knowing, as I do, the conditions under which they have laboured. If they had had. increased capital to the extent of £10,000, in all probability they would have been in a position to do a great deal more than they have been able to do. 123. Seeing that the coal companies hold their leases direct from the Crown, are you aware whether they have been properly carrying out the conditions of their leases?—Until the Mokihinui Company got their further piece of land it was hemmed in by the Cardiff Company, and it was working at a disadvantage. The company will now be in a position to work their coal systematically. They have got a great deal of stuff to take away, and some little time must elapse before they can work their mine to advantage. The Cardiff Company have not had these disadvantages to contend with. They will be now able to work the coal at a much less rate of cost than either the Mokihinui Companv or the Westport Company. They will be able to put their coal on the trucks and send it to the market. I should say that the three companies ought to be able to supply the market with coal at a cheaper rate than at present. 124. They have got miner's wages of sd. per ton. It has been freely said that they are taking all the handiest coal, and not working the field as it should be wrought. Is there any truth in that Statement or not? It has been stated to me in a very authoritative manner?—Well, I should say, in answer to that, there may be a colouring for it from the fact that they have got the easiest coal. Want of capital may be one reason. It is the easiest way of getting the coal, and where men are short of money they will adopt the easiest method of getting the coal. Ido not think that much blame would attach to them in that respect. 125. Mr. Duncan.'] Is there any arrangement whereby the company can run the line on anything like fair terms ? —No ; the Commissioners have the running-power over the line, it all rests with them. 126. If the company should want so much for their line, would not that be a bar to any other company coming in ?—Certainly not. The Government can compel the company to take goods over the line—passengers, coal, and all other goods. That is fixed by Order in Council.

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127. In the event of another line being taken up there is plenty of coal. Any other company may take that line or get other lines on similar terms ? —The Commissioners then would be in this position : They would either have to charge the same rates to the new company or reduce the rates now existing. The Cardiff Company say they can only give 7 per cent. They could not do that in the middle of the year; they would have to wait until the end of the year. 128. Can the Eailway Commissioners vary the rate fixed at the beginning of the year during the currency of the year?—No, certainly not; they made the agreement at the beginning of the year. 129. Mr. Guinness (through the Chairman).] You mentioned that you had promised that they should be able to carry their coal over the line on reasonable terms. Can you accurately describe the nature of the pledge, or on what foundation you made it ?—The company were very sore about having to put down £2,000 before they could get the lease, and they said, " Well, after we have done this, what assurance have we that we shall not be put out of the market again by the carriage of the coal on the railway ?" To that I replied, " The power is vested in the Government, and the Government consider that the rates originally fixed were excessive; but when I come to adjust them I shall charge you, at all events, about one-half. I do not think you should be charged more than one-half, which would be a reasonable and fair amount." 130. The Chairman,'] What is that one-half; is it one-half of the amount gazetted?—No. We were discussing what the Eailway Commissioners charged them, before. I think the company said that 3d. or 4d. was as much as they could afford to pay. Under the original agreement the Mokihinui Company had to find the locomotives. As far as the original agreement is concerned, the Commissioners refused, as I understood, to allow their rolling-stock to go over the company's line. They said the company must fetch the coal. Then the question was raised, Why should the Mokihinui Company have the credit of the Government wagons for their coal ? that it was finding more capital for that company.

Fbidat, 24th August, 1894. Mr. Hislop's Statement. Mr. Hislop : I will try to put the points which I contend for as briefly as possible before the Committee. I submit that there has been a good deal of evidence adduced which has no bearing whatever on this case. In the first place, the Mokihinui Coal Company has nothing to do with the charges made on other lines mentioned, or any Government lines in New Zealand. I also submit that what has been alleged as to what passed between the Minister and the Cardiff Company has very little bearing on the case. What is alleged to have been stated is of the most indefinite character. If you look at the evidence given by Mr. Broome on the subject —and he is the only person connected with the Cardiff Company to whom anything was said—he says [page 25 of his evidence, question 306, quoted]. That is the whole promise that has been made to the Cardiff Company. Had the promise been more than that it would have been a most improper promise, for it would have been a promise that the Cardiff Company was to benefit at the expense of the Mokihinui Company. We do not claim that we have the right to hold or use our property to the detriment of any other company or person; but if any advantage should be given to either company, then I submit that the Mokihinui Company, the pioneer company, which has all along carried out the terms of its leases, and has been in no sense a speculating company, is entitled to such advantage. You will find if you refer to the Mines Committee of 1889 (1.-6, page 102) that Mr. Bayfeild took up the lease within a few days of the time that the Mokihinui Company took up their lease. It is no use the successors of Mr. Bayfeild coming here and trying to distinguish between themselves and Mr. Bayfeild. They are the persons who have succeeded to the rights of Mr. Bayfeild, and the Committee is bound to consider this matter as if Bayfeild were still the owner of the lease. The lease to Mr. Bayfeild is dated the 2nd June, 1885, and is for a term of forty-two years from the Ist July following. The lease to the Mokihinui Company is dated the Bth June, and is for a like term of forty-two years. Both therefore commenced about the same time, and were for the same period. I submit if either company deserves consideration, one more than the other, it is the company that has not only attempted to carry out its lease in its entirety from the commencement, but has been the first to make communication with these coalfields possible. This company commenced operations almost the very moment they got the lease, and to make their line up to the mine, which they thought then they could profitably work. This mine they found so full of faults that it was impossible to make it remunerative. Then we found ourselves in this position: Mr. Bayfeild held the land around us, though he was not performing the conditions of his lease. And he was not only not performing the covenants of his lease, but he was making no effort to develop his mine, and, as we were surrounded by his land, we were forced to extend our line for other two miles. This was about June, 1887. That is really the position between the two companies. There was another point raised, which I submit is of no importance—that is, that the £36,000 was spent for the purpose of benefiting this property. This was no philanthropic expenditure ; it was an expenditure entered into on business principles for the benefit of all. There were nine miles of the Ngakawau Eailway perfectly idle, with no traffic on it at all. In addition, it was felt that there was a monopoly in coal—that it was not a monopoly in the hands of the Government, as it ought to be if there should be any monopoly at all. It was in the hands of private individuals. The Government of the day felt it to be the right thing to facilitate the operations of persons who were prepared to undertake a work which would destroy the monopoly. The Mokihinui Company were the persons prepared to do the work. I will refer the Committee to a statement made by Mr. Seddon in his report as Minister of Mines, in 1891 (29, C.-2), at page 10, which shows that in his opinion the works were remunerative to the Government. That alone I submit shows that the line was more remunerative. The arrangement was such that so long as there should be lessees of these mines any deficiency in interest, at the annual rate of £5 per cent.

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per annum on the cost of construction, is to be made up by the lessees. In addition, as Mr. Seddon said, the Government obtained the advantage of saving Is. or 2s. per ton on the cost of their coal. You see, therefore, that the expenditure on this line was not a one-sided affair. It was not merely for the benefit of the Mokihinui Coal Company. Now, I respectfully submit that the essential matter to be considered by the Committee is the question how justice is to be done between those two companies. I ask, and it is not unreasonable to ask, that the Committee's sympathy, if they have any, one way or other, should be with the pioneer line, with the company which has sunk £47,000 in this undertaking, and which is now struggling to make ends meet. Now, I come to the petition itself. Evidently, in order to have the sympathy of the Committee, the petitioners mention that they have expended £7,000 in addition to incurring a further liability of £22,000. For the benefit of those members who have not been present during the whole of these proceedings I may state that this £7,000 and £22,000 have dwindled down to £12,000. The Chairman : I think it was explained that the £7,000 was included in the £22,000. Mr. Hislop : The whole thing has dwindled down to £12,000. I was going on to say that the petitioners, in answer to my questions, explained that they only spent £22,000 in all; but they have not proved even that sum. They stated that they have expended £7,000, and that they are liable for a further sum. The further sum includes £10,000, which consists of a bonus given by the new company for the lease, which was only made valuable by the existence of our railway, as well as the Government railway. That is not an operation that ought to have the sympathy of any members of this House, or of any one administering the public estate. I say that bonus ought to have gone into the public coffers. Mr. Broome was brought here to give evidence of the expenditure of the Cardiff Company, and that the Mokihinui Company had been a pack of fools, and that they were without knowledge or care as to the cost of their railway. But surely this critic ought to have come with the best available knowledge. For instance, he ought to have known the actual length of line sought to be affected by this petition. In the petition it is stated at 1 mile and 22 chains. I submit that any company coming here and basing its petition on such evidence as has been given so inaccurately (for he tells us that they want to use 1 mile and 22 chains when the actual measurement is 1 mile and 68 chains) ought to be treated with suspicion. In view of such carlessness of statement, it is not unreasonable to ask the Committee to receive that gentleman's evidence with a considerable grain of salt. You have only to scale the length upon the map provided and you will find that it is 1 mile and about 68 chains. I shall produce a witness who knows the ground thoroughly, and he will tell you that it is 1 mile 68 chains. If you look at the correspondence you will find that Mr. Bayfield refers to the distance as a mile and three-quarters. In one place he refers to it as a mile and three-quarters, and in another as 140 chains. Mr. Massey : It is the same thing. Mr. Hislop : I would ask the Committee whether they would be doing right in giving much attention to any engineer coming before them and giving evidence in the way this gentleman has done. lam very sorry that, owing to our communication with Mr. Barton being interrupted, lam not able to place before you the exact statement of the expenditure on the line; but I have gone through the books, and the actual payments can be shown. Our late book-keeper and clerk is ill in the hospital, so that we cannot have the benefit of his testimony on this branch of the subject. Mr. Barton is at Parapara, and if our communication has reached him he has not yet replied. But from the books I find that the actual expenditure up to June, 1887, was £5,077; then, for the line constructed since then, on section No. 1, for formation of 6 chains, £543, and this is for formation alone. Contract No. 2, which includes the tunnel, the company supplying timber, rails, &c, was £2,238. Now, you will remember that Mr. Broome estimated the tunnel at £561. As a matter of fact, this tender was taken up on the 30th of May, 1887. Out of six tenders the one accepted was at £2,300 odd. The man who took it up funked it, and asked to be allowed to go out of it. New tenders were then put up, and the contract was let for the sum mentioned, £2,238. Out of that the bare boring of the tunnel is put down in the contract at £1,170, or just twice the amount that was stated by Mr. Broome. Then, Mr. Broome says the tunnel was 3 chains long, whereas it was 240ft., which is about 3§ chains. That is the sort of evidence that is brought forward to upset our evidence. Then there is for formation in No. 3 section £530; bridge over Granity Creek contract, £237; the bridge over the other creek, Page's Creek, £260; you may put them down at, say, £300 each. lam informed by the manager that some of these bridges had been strengthened, so that they cost much more than £300 each. This year there is a sum of £500 for removal of slips. Then there are rails and sleepers, also road, £1,800, making in all about £12,000, which does not include liabilities outstanding in June, 1887; it does not include the cost of management. Mr. Wilson : What class of liability do you speak of ? Mr. Hislop : I am told by the manager that though the books show, up to June, 1887, payments on expenditure of £5,077, there were also liabilities then outstanding which we cannot follow up. Ido not know how much. As I before said, there is also the cost of management. There are also expenses during construction; also expense of repairs, &c. But now, if you will turn to the Commissioners' report of last year, you will be able to check the cost by that of the Government lines. We are told that this part, as regards expenses, is certainly equal to the worst line on the West Coast. Mr. E. McKenzie says it is a work of engineering difficulty. All the evidence points to its being probably more difficult than the average on any part of the railway-work on the "Westport Section. If you turn to page 14 of the Eailway Commissioners' report of last year you will find the total cost. The length of the railway is twenty miles at Westport. It is stated as twenty-seven, but the addition of seven miles is not included in the cost. lam quoting as it was constructed out of harbour funds. There is £229,700 to be divided by twenty miles, which, gives an average of about £11,300 a mile on the Westport Section. lam told that this sum of £277,495 includes the cost of staiths at Westport, and, in respect of that, a special expenditure of £47,000 ought to be taken off. That still leaves an average of £9,000 a mile,

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exclusive of interest, cost of management, &c, for the Westport Section. I submit to the Committee that if the public railways on the Westport Section have cost this large average of £9,000, then, taking ours at that rate, we have more than the £15,000 made up at once. But we have made one railway a little cheaper than that. We find that this part of the railway, including repairs since the time of construction up to the time when it could be brought into use, including interest and maintenance charges, comes to a sum of £17,000 for this portion. I will be able to show that this is the most expensive portion of the railway—that this 1 mile 68 chains will cost a good deal more for repairs than the balance, which is comparatively plain sailing. I may here state that yesterday I tried to get from the Public Works Department the cost of the portion of the extension contiguous to our line ; but they would not give it to me. lam certain that if the figures were brought here it could be shown that it cost £10,000 a mile. And now, in regard to the apportionment of the cost of running the railway, I wish to point out that all along the Mokihinui Company have been prepared to meet the Bayfeild party in the fairest way possible. In 1890, when we were negotiating for the extension of the railway so as to connect the Government line with the Mokihinui line, we offered, on the basis of 6 per cent., to allow them to come in with us and share our line with them. That was refused. That proposal was not met, as it ought to have been, by a counter proposal. If they thought that to take half the whole line was too much, then they should have met us with some counter proposal. Mr. Hargreaves : What Mr. Hislop is now referring to does not apply to the present company. Mr. Hislop : It is mere refining to say that the present company is not responsible; it was only by virtue of possessing the lease of the old company that they could get the new lease. Thenwhole title depended on Bayfeild's title ; it is preposterous to say that Bayfeild and the other promoters might pocket the whole of this £10,000, or its equivalent, and that their obligations arising from previous matters should not continue. I say again that we have always been prepared to meet these people in the fairest manner possible. But they have not only adopted Mr. Bayfeild's property, they have adopted his tactics. If you look through the correspondence you will see how they are always endeavouring to show how greatly they are concerned for the unemployed. It is always this question of the unemployed; "keeping the people unemployed" runs through the whole of this correspondence. Instead of looking at the thing from a business point of view they are for ever appealing to this cry, which is a mere cry, and nothing more. There is no evidence of consideration for the unemployed. They give no better wages than those who are in rivalry with them. We tried to meet Mr. Bayfeild in like manner when this matter arose; we endeavoured to look at the whole thing from a fair point of view ; and we submitted a proposal to the Cardiff Company, but it ended in nothing. The company ended the whole thing by saying, " You are asking too much." That is not a position, I submit, that ought to be taken up by business people. Before coming here to settle their disputes with us, they ought themselves to have made an attempt to settle them. Again, when ultimately the Bailway Commissioners did settle the matter according to their own lights, Mr. Bayfeild came here to represent the Cardiff Company, and at his suggestion a proposal was made by us to permit the haulage money to remain in abeyance pending settlement. But they repudiated the action of their own agent—the Mokihinui Company having resolved to do what he asked, they repudiated his authority. That, I think, is not the spirit in which a pioneer company ought to be approached by another company. I come now to the question of the relative contributions. We said to them, "If you want to use the line at minimum rates you must share with us the responsibilities, and pay a sinking fund." That, I apprehend, is the proper position to take up. We do not say whether 4s. 4d. and 3s. sd. are rates too high to be charged by the Commissioners. We do not object to their reducing them ; but if they are to be reduced let them be reduced at the Commissioners' expense, not at ours. I submit that if they are to share the benefit of our railway they should share its risks, and they should share the responsibility of procuring every year sufficient money to pay the interest, costs of repair, and sinking fund. Mr. Hargreaves, after making the proposal set out in clause 12 of the petition, says that it was made without prejudice. The proposal therein made was unreasonable, because the amount proposed was too small. The Commissioners got it into their heads, naturally enough, that we were only paying 7 per cent. Unfortunately for us, when we borrowed we had to pay 10 per cent. If we were enabled to participate in the new arrangement, upon which money is to be 5 per cent., we should be glad to extend part of the advantage to the Cardiff Company. Such enterprises are as deserving as any other, and we trust to be favourably considered when the money is bemg distributed. It is a matter of importance to people that they could get their coals Is. or 2s. a ton cheaper; and this Mr. Seddon says has been the result of the Mokihinui Company's operations. In our estimate of the cost of the railway we only charged 7 per cent., because we thought that a reasonable rate. The other side say they are seriously affected by our putting on them this charge. But we will be seriously affected if the charge is not put on. We have already been seriously affected by the agitation which has been kept up for some time past. We have been always willing that this matter should go before a tribunal with no other issue than what is fair between the parties—with none of those side-issues attaching to it, which, unfortunately, very often come in when political or other considerations weigh. We were willing to refer it to the old Bailway Commissioners. We as willingly submitted it to the new ones. The original decision in 1890 was one assessing the charges at what was then thought to be fair and reasonable. The new Commissioners adopted our view. It has been suggested that there was a division of opinion among the Commissioners. This in itself was improper; but there is no proof of any divergence of opinion, but the contrary. If there was a division of opinion, there was nothing to require any one of the Commissioners to put his name to the agreement if he did not agree to what was contained in the agreement. The signatures of two Commissioners would be quite sufficient. I must take it that you will favour our view, that we have the unanimous decision of the new Commissioners. I will now shortly refer to the history of the matter. . There were no running-powers over the railway in 1890,

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and we have the decision of the Legislature of that year in favour of the matter being decided by the Commissioners. The Legislature passed an Act in which they said that, if the Mokihinui Company gave the Commissioners running-powers over their railway, new railway-work could go on— that is, the 7 miles connecting our line with the Government line—and in consideration of our giving running-powers the work was to be done and an agreement entered into. We entered into that agreement, giving the Commissioners running-powers. A part of that agreement was the fixing of the charges therein set out. I submit, then, we start with this strong position: that the parties upon whom the Legislature put the duty of fixing the charges to the other company fixed them by this-agreement, which was not objected to until some considerable time afterwards. We start with a strong position in that regard. Now, I come to the question of relative rates between these parties. I submit that it is a matter with which only experts can deal properly. As I pointed out before, we ought not to be judged or to have our charges fixed by the same considerations as operate in fixing the charges on a public line. In that case there are mixed motives ; the motives, for instance, of the development of the country, and the return upon capital. In this case there can be no such consideration as the development of the country ; it is simply a matter of what is a fair consideration for the risks and expense to which the company has been and is to be put. Now, this company has been in respect of its railway put to an expenditure of more than £30,000 for cost and management before its property became remunerative. I submit that these considerations ought to guide the Committee in their decision on this matter. Most of the members of the Committee will remember the correspondence between Sir Julius Vogel and the the then Government, in which Sir Julius Vogel quotes authorities who lay it down that to the cost of the construction of such works as these interest and the cost of management should be added until the works are ready for use. This is our position : that adding interest the works have cost us over £31,000. The interest on that is £2,170 a year. But, first of all, let me refer to the argument which has been adduced here to the effect that the Cardiff Eailway cannot with a profit carry on while it pays 4s. 4d. per ton profit. It has been shown that we have to pay 3s. sd. Assuming that we get £750, that is, in round figures, what we should get for a run out of 15,000 tons from the other company is problematical, and savours very much of the hope that is deferred ; but suppose' we get £750 from the other company, that still leaves about £1,450, which we have to make up as interest ourselves. Spread over an output of 25,000 tons—our compulsory output—the result is about Is. ljd. per ton. When you add that to the 3s. sd. per ton that it costs us to get our coals to market—about 2d. or 3d. more than it costs the other company—l submit there can be no excuse for lowering the charge to the other company, and thus giving to them a further advantage in rival operations. As against our 25,000 tons, I have supposed that they will turn out 15,000 tons, and will pay us about Is. per ton. I submit that it would be exceedingly wrong to make the pioneer company, which constructed the railway and made this coalfield accessible, and carried on these operations at the risk of slips and various damages occurring through bad construction of any portions of the line—it would, I say, be a monstrous thing to fix the charges between these two companies carrying coal in such a manner that it would cost the pioneer company more to carry their coal than the Cardiff Company. The Commissioners carry our coal about a mile further than theirs; but that is a very small matter. We say that the proposals made by the Cardiff Company are unfair ; we must go upon the basis of output. Supposing we give them an output of 15,000 tons, and ourselves 25,000 tons—although we have not yet put out that quantity—we say' it will cost us more to get our coal to market than the Cardiff Company. If we can afford to pay 4s. 6d., they can pay 4s. 4d. If the Commissioners can see their way to reduce the charges to both parties we shall be glad, and will join hands with them at once. I would like now to refer the Committee to this agreement. By the 13th clause of the agreement our company is responsible for all damage. [Clause read; see clauses in agreement referring to repairs, works, &c] It is suggested that the earning-powers of the railway in other respects is sufficient recompense for repairs and work. We have this year been carrying under this arrangement, and although there had been some loeal expenditure at the stations and otherwise we have up to the present time only got £160, and we have to put against that the cost of repairs for nearly four miles. Mr. .Broome, who under-estimates difficulties, told us that the cost of repairs of this line would be about £100 for the length up to Cardiff. Well, if he can prove that, the Commissioners should employ him at once. If this Committee will look at the Eailway Commissioners' report for 1894 they will find that the amount on the Westport Section was £273 per mile. Hon. Mr. Sedclon: That includes the wharf; there is no use putting that against it. Mr. Guinness : The wharf was a part of the line. Mr. Hislop : The average over New Zealand was £140 ; for Westport, £273. Mr. McKerrow says, for repairs alone, £170. Mr. Wilson : £170 ? Mr. Hislop: That is against Mr. Broome's £100 for the whole distance—that is, 1 mile 68 chains. For that distance, at the rate of £170, it would be about £320, as against Mr. Broome's £100. We have the evidence of Mr. Straw that this is a horrible place for slips, and that this year there has been incurred an expenditure of £500 to remove them. That, I think, should more than go to the extinguishment of any claim for benefit on the part of the other company in respect of other traffic. I perhaps ought to remind the Committee that this agreement with the Commissioner is for one year only. I will shortly put before the Committee the position which we take up. I have pointed out that the basis of the complaint of the Cardiff Company comes to this, as stated by Mr. Broome in his evidence : that a promise was made to them by Mr. Seddou that the Mokihinui Company would not be allowed to deal unjustly by them. That is the whole promise; and this is the whole of the evidence, so far as I know, of the promise on which they acted. In the next place, the petitioners come here, not as dating from the formation of the company, but as successors of Bayfeild, having purchased him out. In the next place, they

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come here alleging an expenditure of £22,000, but which I have shown has dwindled down to £12,000, after deducting from £22,000 the bonus of £10,000 ; alleging that they are using 1 mile 22 chains, which has expanded, upon measurement, to 1 mile 68 chains. Then, they come here with evidence which, I submit, ought not to be considered as evidence—namely, " "What ought to have been the cost of our railway " —and this they support upon the strength of most unbusinesslike suggestions Mr. Guinness : On what is the value Mr. Ilislop : And besides, what ought to have been the cost estimated on 1 mile and 22 chains, instead of 1 mile and 68 chains. Take the tunnel alone, they say that the work could be done as cheaply then as now; but the actual tenders show that the price was just twice what Mr. Broome estimated, who is also wrong in his estimate of the length of the tunnel, it being miles longer than his estimate. In the next place, we are able to show the actual expenditure from our own books. I have explained to the Committee how it was that we could not produce Mr. Burton or our clerk. We have shown that the actual expenditure, so far as we compared, exclusive of interest and cost of management, repairs, and engineering, was, on 1 mile and 68 chains, about £11,400. This, as I have said, excludes engineer's charges, the cost of management during construction, and the cost of repairs between June, 1887, and the present time. I therefore submit that, including these things and these costs, it is not unreasonable to maintain that our necessary expenditure has been much greater than the sum I have mentioned. If the interest on the money were compounded until the railway was ready it would be very much more, and I apprehend we would be entitled to compound interest. Taking the other sums and simple interest it cost us between £16,000 and £17,000. I submit that it would be unjust on account of public considerations, or on account of private interests, or because the other company say they cannot carry with a profit at 4s. 4d., to make us contribute to the carriage of our rival's coal. If we charge ourselves with interest on the total cost of our railway, and we take our output at 25,000 tons, and theirs at 15,000 tons, then, calculating on that basis, the cost of putting our coal on the market would be about 2d. per ton greater than it costs them to put their coal on the market. It would be most unjust to the pioneer company to still further burden them for the benefit of the other company. In addition, I would point out to the Committee that we have the risk of other very serious slips coming down, which may in a few weeks cost a further sum of £500, and the expense of keeping bridges in repair, and the supply of all material for that purpose, as well as to provide against accidents, whether occurring in carrying out these necessary repairs, or through wrong construction of works. We have also a sinking fund to provide for. I submit that my figures cannot be controverted. In fairness to the pioneer company it must be allowed that they have done everything to carry out the terms of their lease ; that they have gone to the greatest expense to keep up the output of coal; that they have incurred great expenditure in very difficult circumstances. If the Committee can recommend the Eailway Commissioners to lower their charges and ease both these companies, this company will be only too well pleased. I am prepared to put in the books of the company, and the contracts, &c, showing the expenditure ; also the specifications showing the nature of the work. Michael Stkaw, examined by Mr. Hislop. 1. Mr. Hislop.] You were manager for many years for the Mokihinui Company?—Yes; six years. 2. And now you are lessee of the South Canterbury Coal-mine?—Yes. 3. The Chairman.] Is your mine in Canterbury ?—Yes ; it belongs to Mr. Eutherford. 4. Mr. Ilislop.] When did you begin with the Mokihinui Company? —In April, 1888. 5. At that time part of the railway had been constructed ? —Yes; a little over a mile. 6. You heard the figures that have been quoted just now ?—I did. 7. Have you looked through the contracts of the company ?—Yes. 8. Are those figures correct [accounts handed to witness] ?—These figures are correct; I have gone over them before. 9. With regard to the two bridges, are they understated ? —They are correct. Those are the figures ; the expenditure on the whole section to June, 1887, and since. 10. Hon. Mr. Seddon.] You only started in 1888 ?—I have gone through the whole of the books. Those refer to the first item. 11. Mr. Hislop.] You estimate £500 for slips this year ? —Yes. 12. You have measured this line from the point of junction of the Government line with the Cardiff Company's line ?—Yes ; I have surveyed it twice over. 13. What is the distance?—l mile and 68 chains, or thereabouts. I have surveyed it twice, and pegged it out. 14. What is your opinion as to the relative cost of the lower and upper portions ?—The lower portion of the line would cost double the amount of the upper. 15. You mean double per mile ? —Yes, per mile, if not more ; it is very expensive. 16. Between the Cardiff Company and the Government ?—Both ends are very bad. 17. You were there during the construction of this part of the line? —Yes; the new part. 18. The tunnel and the other part ?—Yes, I was. 19. Was there any unnecessary expenditure on that?—Certainly not; the contract was thrown up once because it was too small. 20. Mr. Crowther.] Is that the same part that is mentioned?—The tunnel; yes. The contractors would not go on with it; it was an 8 chains contract. 21. How much did it cost ?—£2,238. 22. Are you aware of the operations that have been going on between the two companies ?— Yes. 6—l. 9.

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23. Are you aware that the Mokihinui Company made an offer in 1890 to the other company, or to Bayfeild ? What was it called at that time ? —The " Calliope," I think. 24. Was there an offer made to the new company to go halves ?—Yes. 25. Mr. Hislop.] Mr. Seddon stated that the company had offered the line at £21,000? Mr. Seddon : Yes. 26. Was it in writing?—l forget. It was in an interview that Mr. O'Conor had with him. 27. There is nothing in the minute-book about it? —I think it was that the directors did not feel themselves bound by what Mr. O'Conor said at the time. I think Mr. O'Conor was chairman of the directors at the time. If you question it, you ought to have him brought here. It might be merely a suggestion made by Mr. O'Conor, which would have been gone into at the time if it had been mentioned to the board of directors. 28. What is your experience in regard to the expense of maintaining this part of the line?— During my experience of six years it has been very expensive. It takes twice as much to clear the slips away and to maintain the road. These slips are constantly coming down ; in fact, there is no end of them. For 14 chains from the tunnel the surface, consisting of granite boulders, is broken. The county road has slipped in several places. At some future time, with heavy rains, the whole thing may come into the railway. Fourteen chains from the tunnel down to the old mine it is liable to be carried away. Between Corby's hotel and the tunnel the floor of the coal-beds crops out on to the top of the cutting. The whole thing comes right into the cutting; the floor forms a bed for the boulders, &c, to slip on. 29. Would you estimate the cost of maintenance apart from the exceptional slips of that part of the line? Can you do it ? —I am thinking of the figures it cost. Taking the slips and one thing and another into account it would take five or six men all the year round to look after it. Sometimes it would require twenty men to be employed. 30. Except the slip of 1894, are all the slips in that statement ?—No, none of them. Nothing for maintenance. 31. You say it would take five or six men to be constantly employed to look after the line in consequence of these slips that are coming down. Does it take five or six men for that 1 mile and 68 chains? —Yes; you have to go over the line every morning. Every chain of the fourteen is very •bad, and the whole length of the line requires to be constantly watched. I have had six years of it, and I know what it is. 32. What do you estimate each man at?—We pay 10s. a day, the Government pays Bs. 33. Mr. Flatman.] Can you tell us whether the general traffic on that line is likely to develop much? —A little, I think, but not much; as population increases consumption will increase, but there is not much opening there yet. 34. An Ron. Member.'] They are making a new road there? —Yes; a new cart-road alongside. Cross-examined by Mr. Guinness. 35. Mr. Guinness.] What is your professional status—what are you ?—I am a mining engineer and a mine-manager. I have been so for some twenty-four years now. 36. A colliery-manager? —Yes. I have held a certificate for twenty-four years. 37. A surveyor? —Yes. 38. Have you a certificate ?—No; but I can survey as well as any one. 39. You were a colliery-manager for six years in this place ? —I was. 40. You say you have measured this line, and you have found it to be 1 mile and 68 chains ? —Yes ; I have surveyed it two or three times. 41. When did you last measure it ?—lt is over twelve months ago. 42. Was that done with any one?—-I had two men that I took with me. We took crosssections. 43. What were their names ?—James Vaughan and P. Mumm. 44. Did you take a note of any of the measurements ? —I had the book. 45. Where is it ?—lt was sent to the office. I have not got it now. 46. Could you quote the measurements in that book?—Yes. 47. The last time you measured it, did you go over the line ?—Yes. 48. What part did you start at —at the junction ?—Yes. 49. To what point did you bring the 1 mile and 68 chains ?—[Witness described the distances on the map.] 50. Are you not aware that at the time you measured it the junction was not made ?—I will point out to you. There is the Junction Road and there is the County Road. I know; I have been over it a thousand times. 51. Are you not aware that the Westport-Cardiff Company had not made that railway from that point when you measured the Mokihinui Company's line?—Yes. 52. Hs.ve you been there since you measured it?—Yes. 53. Where is the junction? — [Referring to map] Where that peg is, as near as I can say ;it is pegged, every chain of it. 54. Have you included in that mileage sidings?—No. 55. Mr. Growther.] Not at all ?—No. 56. Mr. Guinness.] Are you quite sure ? —I am positive. 57. Was the whole of that line from the junction, from the Government line in the Mokihinui Township to the Mokihinui Company's lease, completed when you took charge ?—[Witness described distances and boundaries on the map.] 58. That is at a point in the old lease ? —ln the old lease. 59. Under whose superintendence was it continued from there to the Mokihinui Company's present lease? —It was under my supervision; but when I went there in 1888 Mr. Shaddick was the surveyor.

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60. Who was supervising the contract?—l was. 61. You were in the position of clerk of works then?' —I was clerk of works for the whole show. 62. You acted in that capacity ?—Yes; I was supervisor. 63. Was the work that was undertaken during the time that you were mine-manager all constructed by tender and contract, or was any of it done by day-labour?—lt was all contract. 64. Can you name the contractors, and can the amounts be produced ?—Yes, I believe so. 65. The company must have them in their possession ?—Yes. 66. Mr. Hislop.] We have them with the exception of section No. 1; for this we cannot find the specifications. 67. Mr. Guinness.] Will you, witness, point out what portion of the line was made when you took charge ?—Yes. [Indicated on the map.] 68. You have told the Committee that it would take a certain number of men to maintain the line and to effect repairs ; that if there were slips at least five or six men would have to be employed all the year round ?—Yes ; perhaps more. 69. That is from the Government line up to the Cardiff Junction?—Yes. 70. Does not that include the whole of the Mokihinui line ?—No, only part of it; I mean this 1 mile 68 chains. 71. Then, it would require additional "men for the rest? —Yes, certainly. It would take three men to keep the other—regularly employed. 72. And then you told us that on this portion, 1 mile and 68 chains, you would require to employ twenty men?—Yes. 73. How long would you employ them for?—For the time they were removing the slip. 74. How long would that be ?—lt would depend on how much came down. 75. Until the slip was removed you would have to employ twenty men? —Yes; I have had as many as forty men employed. • 76. Will you tell us the length of time you employed these forty men? —I cannot give you the time ; it might be a week or perhaps a fortnight. - 77.- You did not keep the time?—No, I did not keep it separately. I could not do so; but I know that at one time there was as much as 10 chains down at once. -. 78. Did you repair it ? —Yes. 79. And make a good job of it ?—Yes. 80. Permanent? —Yes ; but some of it was knocked away again. 81. What knocked it away? —The slips from the sidelings. 82. You have stated that you did not expect the traffic to develop much ?—No ; I do not think it will or can very much. 83. Do you not think it will in the future ? —I suppose it will develop to some extent; people will want more tucker. There are not many there, not more than 200 all over the whole place. 84. You remember when the inquiry by a Committee was held on this subject in Wellington ? —Yes ; I was there. 85. You gave some evidence before that Committee as to the construction of this line and its cost ?—I could not say; I have given it several times. 86. But you gave evidence before the Committee of Inquiry appointed by the shareholders of the company as to the management and expense of the company's works, which inquiry was held in Wellington about October or November, 1892. I will refer you first to page 43. You told the Committee what was the state of things which you found upon your arrival on the 9th April, 1888. You said that you found to your surprise that Mr. O'Conor was manager, managing director, cashier, and, in fact, everything else ; in fact, he was "boss " of the whole show?—Yes. 87. You mention Grant's paddock. Is that the point marked by you with a cross on the map ? —No. 88. Where is Page's Creek ?— [Witness indicated places on the map.] Mr. Macarthy put some questions, which I will read to you :— " Mr. Macarthy.] At the time the management of the company was removed to Wellington there were two leases in possession of the company —160 acres and 640 acres; is that not so ? — Yes. " What has been done with the 160-acre lease ?—Nothing. " Why ? —lt was abandoned ; there was no coal. " How long has it been abandoned ?—lt was abandoned when I was engaged as mine-manager April 9th, 1888. " Nothing was done with it since ?—-No. " For what reason ? Because there was no coal ? —No payable coal. "No coal that would pay the company to work?—Certainly not. It would not pay half a dozen men. "What portion of the 640-acre lease is valuable?—The major portion is valueless, being denuded granite. "What about the new lease—the 900 acres? —That is coal; 1 have been all round the boundaries. There is coal all over that area. " Is it not the fact that that is the most valuable asset the company possesses?—Certainly, by far. " You say the company would have hardly any workable coal only for the new piece?—l do; that is the most valuable part of their property—the new lease. " Mr. Macarthy (to the Committee) : That is part of the work of the company since the management has been in Wellington. We have secured that lease. " Mr. Miles.] Have you got a complete title for that lease ?

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" Mr. Macarthy : Y res ;we have the lease. You will find the fact recorded in the minute-book. The lease is now in the company's safe, and can be seen by you. Practically, we were only suppliants for this ground. It was applied for by Bayfeild and Bowlands ; and, to secure it, it was necessary that we should continue our works there when the ' Lawrence ' was wrecked, and a large expenditure had been incurred since the wreck in prosecuting coal explorations, which have had the result of proving that this lease and a portion of the 600 acres constitute a really valuable asset. Had we discontinued the work, as Mr. O'Conor and some of the Westport shareholders wished, we would have been liable to have the whole of the leases forfeited for non-compliance with the conditions, and the forfeiture of the lease would entail forfeiture of the railway. The point I wish to press is that the expenditure was absolutely necessary to secure this 950 acres, and it became additionally necessary when we ascertained that our title to the railway was defective. And for another reason the expense was necessary, and that was to prospect the land and to prove the extent and value of the coal before we expended money in completing the railway. I use the word ' completion ' because it will be shown by the Government engineers that the railway is not fit for passenger-traffic. When I use the expression ' not fit for passenger-traffic ' you will recollect that Mr. O'Conor mentioned to you that the railway only required to be of a temporary character, just to reach the coal and get it down to the other line. If you examine the Westland and Nelson Coalfields Administration Act, and the agreement entered into with the New Zealand Bailway Commissioners, in the minute-book, you will find that it is incumbent on the company to adapt the railway to the requirements of passenger-traffic. Mr. O'Conor should have been quite aware of this, for here is a letter addressed to the Chairman of the Mokihinui Coal Company, dated 6th July, 1887 [letter put in; also a report from Mr. Lowe, Government Bailway Engineer, dated 22nd July, 1891]. That correspondence will show that a very large expenditure is necessary before the railway can be adapted to the heavy traffic and passenger-traffic, both of which have to be provided for under the Acts I have, referred to. In quoting this to you, lam placing before you the reasons for the large expenditure incurred during the past year and a half, since the wreck of the ' Lawrence,' because in some cases £70 a week has been expended in opening the mine, and no coal has been sold. Something like 3,000 or 4,000 tons of coal are lying at Mokihinui now. No vessel will go there for it. As a consequence, the overdraft of the company had grown to a sum of £5,000 when Mr. .O'Conor returned from England. We were then endeavouring to raise money to put the railway in a state fit for traffic, and it was then that we were officially informed of the defect in the title to the two miles of railway. That fact was not concealed from our banker, and probably that knowledge, and the action taken by Mr. O'Conor in issuing his circular, were the cause of the bank insisting on the overdraft of the company being liquidated. Calls were made for the purpose, and the money has been paid into the Bank, and it is intended to connect our line with the Government line of railway at Mokininui, thereby enabling us to convey our coals to Westport. I am under the impression that Mr. O'Conor refers in his circular to the money having been ill-spent in one sentence, and in another regrets that not more work has been done to develop the coal. Certainly any stick is good enough with which to beat the directors. According to our manager's report for last year, he had proved the existence of millions of tons of coal. There are one or two matters on which Mr. Straw would be able to give some information." Then Mr. Macarthy asks the question whether you would hazard the opinion as to the amount that would be required to put the railway staiths and wharf in the state they were before the management shifted, and you, Mr. Straw, replied to his question that £10,000 would do it. " On my arrival at Mokihinui," you go on to say, "I found the railway formation and bridges nearly completed. The rails were being put down, and had got up to Page's Creek, or near to Grant's paddock. My first duty was to take off the top stringers from the Chasm Creek Bridge. It had been put in at least lOin. above its proper level. After reducing the height of the bridge to its proper level, I had to lower the cutting between Chasm Creek bridge and Page's Creek at least from 9in. to Ift. ; this was in solid rock." And now, as to the ballasting (railway contract), you said, " These men (Curtayne and party) commenced the work, which consisted of ballasting the whole length of the railway, and taking out all the slack places in the formation." You go on to say, " These men went on with their work for some time until they got a progress payment. This Mr. O'Conor gave them in Corby's Hotel, which, I think, was about £100. I may say here the men were very dissatified respecting the work that had been done. It was let without any plan being made; the level-pegs were put in after the contract was let. The same night this progress payment was made the contractors came to my house and asked to see the specifications. They asked to be allowed to take them to their hut for their mates to hear them read. I let them go, and they never returned them. These contractors did no more work after receiving the above progress payment." Then, as regards these specifications, you said you received others, but not a true copy of the specifications which Curtayne and party had. Then you go on to state, " I remember one clause was left out —viz., the size of the ballast in the original specification—nothing longer than would pass through a 3in. ring was allowed to be put on. This made a considerable difference looth to the ballast and to the work. The ballast which was put on by Mr. Corby contained stones from 601b. to 701b. weight." 89. Mr. Guinness.] What do you mean by stones being " put?"—They were put alongside the railway. 90. Where were they put ? —They were put alongside ; under the sleepers. 91. Was that according to the specifications?—lt was not; they were put below the level. 92. And, further, you said, " At the time of this contract I wrote a long report respecting the contractor or his men lowering the level-pegs several times, and in one case they lowered the formation to make it fit with the altered level-pegs. This contract I refused to certify when it was supposed to be completed, and I never did sign it, as it was never done up to the specifications " ? —Yes.

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93. On page 44, Mr. O'Conor says something about his trucks. You say they were useless; and you go on to say, " The first trucks he brought out were a complete failure. The doors broke down, and there is nothing left of some of them. The first three or four he got from Nelson ; then he sent tramway wheels, and they collapsed and broke away. Then he had wooden doors in the trucks, and they gave way and had to be renewed. They were very old-fashioned ; I have seen them in use since I was a boy. In fact, Ido not think they are serviceable at all; they will not stand weight. They would do for a short journey, but for three or four miles they are useless " ? —Yes. 94. Then Mr. Macarthy asked you about the specification for the ballasting contract being altered. Your evidence is stated thus in the shorthand writer's report. I will read the whole passage : — " Mr. Macarthy .] You say the specification for the ballasting contract was altered when Mr. Corby took it up ? —I do. " What motive was there for altering it ?—For getting the ballasting much easier. " Did you consent to it ?—No; I had not thought about it. " They were made without your knowledge? —Mr. O'Conor made the specifications. " But the alterations ?—lt would be him. " You did not ? —I had not anything to do with them. It was the most disgraceful contract I ever saw in my life." 95. That is the whole of the passage? —Yes. 96. Do you stand by that now ? —Yes ; certainly I do. 97. Do you say that was a loss or gain to the company ? —lt was neither a loss nor gain. The contract was carried out. I had to peg it out myself. 98. Now, I come to page 47. There Mr. Macarthy asks you, as I have already mentioned, some further questions. You are asked whether you would hazard an opinion as to the amount that would be required to put the railway staiths and wharf in the state they were when the management was shifted to Wellington, and you said you thought £10,000 would do it—but I had better read the passage, as follows : "You think £10,000 would be sufficient for the railway wharf-and staiths?—l do." Supposing the expenditure had been £20,000? —It could not be.that; it is impossible. 99. At the time the management was shifted to Wellington, do you consider that there was anything to show that £20,000 had been judiciously expended at Mokihinui ? —Certainly not. To the Committee : The accounts will show that at the time the management was shifted to Wellington there had been expended £20,000. I do not know that there was that amount expended except from the statement in the prospectus. Mr. Straw states that if £20,000 had been judiciously expended it ought to have done the work. I take it a great deal of the money was expended there when Mr. O'Conor was engineer. The works required by Mr. Lowe's report indicate that Mr. O'Conor's engineering was very crude. 100. You said £10,000 would do it ?—lt would take £10,000 with the company's engine at work. 101. What would it take with the Government's engine on it —would it take more than £10,000 ?—Yes ; they would want an embankment widened to standard width. That has since been done by the company. 102. Would you say how much more—one-fourth more, or one-third, or one-fifth more ?— I could not say ; it would take a lot more any way. 103. What is your idea of a lot ? —Well, half as much again. 104. You say there "it was impossible," but, suppose, as a matter of fact, that the company did spend £20,000 : do you adhere to the statement you made there ?—That is eighteen months ago. I adhere to what is stated there. 105. But at the time the management was shifted to Wellington you did not consider there was anything to show for £20,000, if it had been judiciously expended?—Certainly not. 106. But you adhere to your statement ? —Yes. There was spent under my supervision, many thousands. 107. Mr. O'Conor was both engineer and chairman of directors? —Yes. Other engineers were employed, but he ruled up to some months after the time I took charge. 108. Mr. Hislop.] That (£20,000) is the expenditure upon the whole thing?—The railway and staiths and wharf, as then existing, were all that could be shown for it. 109. Mr. Wilson.] This £20,000 was spent on river-works? Mr. Hislop : On coal-trying and everything else. 110. Mr. Guinness.] Coming back to the matter of " solid rock," was that a very difficult thing to do ?—Not very ; I suppose it would cost about £40 the whole job. It was about 2or 3 chains. William Alfebd Tiddy examined by Mr. Hislop. 111. Mr. Hislop.] You have calculated the interest during several years on the total cost of this railway ? —Yes. 112. And the proportion for management ? —Yes. 113. Will you put in a statement ?—Yes. 114. What is your position?—Acting-secretary. 115. The Chairman.] I understand that this document is an analysis of your expenditure, showing what is expenditure and what is interest ?—Yes ; that is so. [Exhibit 7 put in.] Mr. Thomas G. Macabthy examined. 116. Mr. Guinness.] You were Chairman of the Directors of the Mokihinui Company for some years ?—I was.

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117. In October of 1892, or about that time, an inquiry was held as to the management and expenditure of that company ? —An inquiry was held, but I cannot speak except from memory as to date. It was about that time. 118. You took part in that inquiry?—Yes. 118a. In fact, you were Chairman of the Committee of shareholders who authorised the inquiry ? —Yes. 119. The Committee of inquiry consisted of Messrs. Greenland, Kennedy Macdonald, and Alfred Miles?—Yes. 119a. And the two last-named gentlemen made a report for the shareholders ? —Yes. 119b. As members of the Committee of Inquiry ? —Yes. 120. Do you agree with those two paragraphs under the headings " Eailway Plant," and " County Eoad." I will read them to you. You say : " Eeference has been made by Mr. O'Conor in his circulars to shareholders, and before the Committee, to the question of the cost of opening the railway to the mine, which work, he states, will not entail a heavy outlay. It appears, however, clear, from the evidence brought before the Committee, that the line does not at present comply either with the conditions laid down by the Government, or with the agreement with the Eailway Commissioners, to enable it to be used for goods and passenger traffic. A large expenditure is undoubtedly necessary to complete the line and bring it up to the Government standard for both goods and passenger traffic; but no evidence has been brought before the Committee to show what sum will be required. The amount will depend upon the manner in which the directors go to work. They appear to be fully alive to the importance of the position." Then, with regard to the County road, they say : "The Committee have considered Mr. O'Conor's statement in reference to this matter. It appears clear from the evidence that the company could not obtain a title for "the two miles of railway first constructed without coming to an arrangement with the Duller County Council, respecting the making of a county road in lieu of the roadway taken for the railway. This work is rendered compulsory by the provisions of " The Westland and Nelson Coalfields Administration Act 1877 Amendment Act, 1892," and has yet to be completed by the company." Is that the road which the company undertook, under the Act of 1892, to complete in substitution of the road which you had. taken possession of ?—I am under the impression that a few days after that report was made I had left Wellington. I was away in England. I cannot, in reply to your question, say whether it is or not. 121. You say you were away in England?—Yes. [Eeport tendered in evidence.] Mr. Hislop: I object to that report going in as evidence ; it appears to be a confidential document. There would be no objection to any questions which Mr. Guinness might ask, whether suggested by the document or not; but I certainly object to the document itself being put in. The Chairman : I think extracts might be taken and put in, so far as they relate to particulars of management and expenditure; but Ido not think the whole document should go in. I must therefore rule that the examination should be confined to questions suggested by such extracts. Mr. Guinness : At page 45, Mr. Macarthy says: " I put these things in to show that the rule laid down by Mr. O'Conor, that directors should not be connected with other companies, had not been observed by him. The resolution I read from the Westport directors goes to show that the business of the sawmill company had been mixed with that of this company. I will now take the prospectus and the matters arising therefrom. The first point is as to my name appearing on it as a director. The minutes will show that I only became a director in February, after the issue of the prospectus." (Mr. Straw, you say, here left the room.) "The prospectus says: " The capital has been expended in opening the mines, and in the construction of a railway connecting them with the Mokihinui Eiver, in the erection of a wharf and coal-staiths; also in providing plant, locomotive, trucks, weighbridge, screens, &c." To read that you would think they had a title to the wharfs and coal staiths, whereas there was no title. [The Gazette put in—l9th of August, 1890—with Order in Council.] The second paragraph of the prospectus says: "The property consists of about 1,800 acres of coal-bearing Crown land, held under lease and application, a small part of which is estimated to contain 3,000,000 tons of coal. The term of lease is sixty-three years; the rent commuted to a royalty of 6d. per ton. The company have a concession of wharfage sites, and the right to charge 2s. 6d. per ton on goods landed or shipped. A reserve has also been made for the company's benefit, of 2 chains of land in width along the company's railway. Of this area of 1,800 acres, one lease of 160 acres, to be shown to you, is worthless, and it was known to be practically worthless for coal-mining purposes at the time the prospectus was issued." Mr. Macdonald asked "by whom it was known to be worthless?" to which Mr. Macarthy replies, " The directors, I presume. No work was done on it." Mr. Miles then asked Mr. Macarthy, "Do you say that part of this property which was offered to the public in that prospectus of 1889 had no title to it at the time it was offered?" and Mr. Macarthy replies, " That Gazette notice gives you the particulars as to title (see Gazette, 19th August, 1890.)" Coming back to the hundred and sixty acre lease, I say that at the time that prospectus was issued, working for coal on that land had been stopped. The manager, Mr. Straw, will tell you that it was of no value to the company for coal-mining purposes, although the company was in this very serious position, that at the time the first two miles of the railway were constructed this lease was attached to the railway, and if the company abandoned the lease they must necessarily abandon the railway. We have been unable to continue working the lease, and to comply with the conditions as to output, although we have been notified by the Minister that we would be required to continue the work. The other lease—s93 acres—we leave in abeyance, but I am under the impression that Messrs. Bayfeild and Eowlands had prior applications for the balance of the area referred to in the prospectus. Notwithstanding which, the Wellington directors subsequently obtained a lease of 960 acres, and have it now. In reply to Mr. Macdonald, Mr. Macarthy says, " Mr. O'Conor has just come into the room, and desired to see the letter from the Marine Department." Mr. Macarthy further says, " I say the references

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in the prospectus to these leases, and to the erection of a wharf and coal-staiths, were seriously misleading; and had the shareholders in Wellington taken legal proceedings, it would have been a serious matter to Mr. O'Conor and the other directors. In fact, the two miles of railway being constructed without a title, and the necessity for proper memorandum and articles of association, most seriously retarded the efforts of the directors to develop the company's business at Mokihinui. On page 47 Mr. Macarthy also says, in reference to the appointment of surveyor : "I understand that it was at Mr. Seager's request, in order that he might secure the services of an experienced and impartial man." Eeferring again to the " Lawrence," here are papers in Mr. O'Conor's handwriting showing estimates of the value of the freight the steamer could earn. They are not dated, but you can take them for what they are worth. One noticeable feature is that Mr. O'Conor estimates that she burns 1,500 tons of coal per annum; but in making his charge against the directors he estimates that she burns 300 tons a month. When we were disturbed by Mr. O'Conor I was calling attention to items in the prospectus; and the construction I put on the statements with reference to the property was that the 160 acres to which I have previously referred was known to be valueless when the prospectus was issued. The coal-workings thereon had been abandoned, and. have not since been resumed. The portion referred to in the prospectus as being under application was really Bayfeild and Rowlands, although we have secured about 950 acres of it since. So that Mr. O'Conor and the other Westport directors, in coming to Wellington and asking people to buy shares on that prospectus, presented a series of misstatements of which they may hear more hereafter. I think you have sufficient before you to show that there was practically no title to the two miles of railway, and that the defect in the title was due to Mr. O'Conor's neglect. (I now put in the prospectus.) Mr. O'Conor, in referring to the position of the company, spoke of it as flourishing when the management was brought to Wellington. If you will turn to folio 93 of the minute-book (2nd January, 1889), four weeks before the prospectus was issued, you will find the resolution passed by the directors at Westport. 122. Mr. Guinness.] I would again ask Mr. Macarthy whether those statements which I have read, and which he made before the Committee of Inquiry, are correct ?—Yes, they are correct. 123. Then we come to the recapitulation. Are the statements made there correct ? —Yes. 124.'Y0u say there that Mr. O'Conor " (1) Failed to disclose that coal-mining on the 160-acre lease had been abandoned twelve months prior to January, 1889 ; (2) That the only other lease held by the company was 640 acres, one-half of which was and is valueless; (3) That the prospectus intimated that the company then (January, 1889) had a large area of coal-bearing land under application for lease, whereas for this a,rea Messrs. Bayfeild. and others had made prior application; (4) That he failed to disclose in the said prospectus that two miles of the company's railway was by law attached to the 160-acre lease ; that there were output covenants in that lease; that these covenants had not been performed ; that the said lease was therefore liable to forfeiture, and thereby involved a possible forfeiture of the two miles of railway. All this must have been known to Mr. O'Conor when he issued the prospectus referred to ; (5) That these two miles of. rail way were constructed by Mr. O'Conor without the necessary legal formalities having been observed. Mr. O'Conor had written notice of this from the then Government Engineer, Mr. C. Y. O'Connor. The defect was therefore known to him when he issued the prospectus in January, 1889. (6.) The company had no legal title to the wharf and staiths ; and this the prospectus failed to disclose ? — Yes. 124a. Then as to the Wellington directors having succeeded in making the leases and railway, to which the titles were before questionable, assets of very considerable value, you say, in the recapitulation: "(1.) That the directors have, by 'The Nelson and Westland Coalfields Adminis- i tration Act, 1892,' succeeded in perfecting the company's title to the two miles of railway constructed by Mr. O'Conor without legal authority (on completion of the County Council road). (2.) They have, by the same Act, secured that the inability of the company to comply with the output covenants of the 160-acre lease will not prejudicially aflect the company's title to that two miles of railway. (3.) They have acquired the lease of the most valuable coal area possessed by the company of 957 acres. (4.) They have proved beyond doubt the existence therein of a very extensive and valuable coalfield of the best quality, and have opened the mine up in a systematic manner. (5.) They obtained the passing of an Act of Parliament to make railway connection between Mokihinui and Westport. (6.) They acquired the legal title to wharf and staiths at Mokihinui. (7.) They made an agreement with the Railway Commissioners regarding coal-carriage charges and running charges on the company's line." That is correct ? —Yes. 125. You then say that the company had no power to appoint a managing director, therefore such an appointment was ultra vires, and any amount so received should be refunded to the company ?—Yes. 126. Has the company received value for the work done at Mokihinui prior to the management being shifted to Wellington?—That question was answered by stating that Mr. Straw's estimate of what the railway wharf and staiths, as they then were, should have cost is £10,000, and the balance-sheet of January, 1889, shows an expenditure of £22,000. [Note by Mr. Macarthy, when correcting his evidence:— " P.S.—The above does not contain my reply to Mr. Guinness, which was that the extracts as given did not fully explain the position. I stated that a great part of the expenditure on railway had been made since the date referred to. The £22,000 of total expenditure was taken from a balance-sheet and statement prepared by. Mr. O'Conor, and attached to a prospectus. It does not accord with the company's balance-sheet of January, 1889, which shows a total expenditure of £19,570 up to that time ; but this includes mine, buildings, rents, and all other expenditure. What was shown was that the expenditure resulted in leaving us with a debit of £19,570, and only the railway, wharf, and staiths as available assets at that time, the old lease and workings being useless. It must be understood, too, that the railway was not completed at the time referred to, and Mr. Straw's estimate was of the incomplete railway-line.—T.G.M."]

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APPENDICES.

EXHIBITS AND ADDITIONAL COBBESPONDENCE PUT IN DUBING THE HEAEING OE THE PETITION.

EXHIBIT No. 1. Exhibit 1 is the Lease —the Crown to the Westpobt-Cardiff Coal Company (Limited).

EXHIBIT No. 2. The Seceetaey, Mokihimii Coal Company (Limited), to the Chairman, Westport-Oardiff Coal Company (Limited), Christchurch. The Mokihinui Coal Company (Limited), Wellington, Deae Sie,— 14th November, 1893. I have to acknowledge receipt of your telegram of the 31st ultimo, asking when you might hear my directors' decision re haulage rates. I regret the delay which has arisen in replying to your letter, and trust that you have not been inconvenienced. My Board has been able at last to give the matter consideration, and I am instructed to say that they will consent to the proposed junction shown on the plan on the condition that the loopline is altered as indicated by the Engineer-in-Chief, and also on condition that there is added the runaway siding suggested by Mr. Broome. The conditions upon which the consent is given are : That your company agrees to enter into an agreement by deed, which will also be signed by this company, and which shall contain, in addition to the matters herein suggested, all usual and proper clauses and agreements which, in the opinion of my Board's solicitors, will be necessary to insure the carrying-out by the several parties of this agreement. The agreement is to be in force for a period of three years commencing from the day of 18 . The charges are to be those specified in the schedule hereto attached. My company will work the traffic on your company's line and sidings as described in Mr. Broome's letter of 18th September; and will, with all reasonable despatch, remove the trucks from the Cardiff Company's bins to the Government sidings at Mokihinui. They will return the empty wagons as they may be available from the Government sidings at Mokihinui to the Cardiff Company's sidings, and will place them in position at the bins as specified in Mr. Broome's letter. The Mokihinui Company will pay the Government charges for truck rental, and will hold the Cardiff Company responsible for wagon demurrage that may accrue from delay on the Cardiff line or sidings or elsewhere on your part. Your company is to be responsible for any loss or damage incurred to any person or company using the public roads, through the working of the sidings which connect with the Mokihinui line near the said roads. It is to be understood that only full wagons are to be taken from the bins to Mokihinui. In case my company should, through accident, process of law, strike, or other cause over which my company has no control, be prevented from working any part of your line or sidings, they will not be, while the same continues, bound to carry out their agreement to work the lines as before provided for. The responsibility of the Mokihinui Company in respect of goods carried under this agreement is only to extend from the time when they are taken in charge from the bins or sidings until they arrive at the siding of destination. I remain, &c, Chas. A. Deacon, Secretary, The Chairman, The Mokihinui Coal Company (Limited). Westport-Cardiff Coal Company (Limited), Christchurch.

Schedule of Rates for Traffic on Westport-Cardiff Mid Mokihinui Coal Gompanys' Lines. s. d. Classes A, B, C, D, E, F, H, per ton ... ... ... ... 5 7 Classes P and Q, per ton ... ... ... ... ... 1 10 Timber, per 100 super. ... ... ... ... ... ... 1 0 Firewood, per truck ... ... ... ... ... ... 11 0 Cattle, per head ... ... ... ... ... ... 30 Sheep, per head ... • ... ... ... ... ... 0 2-J-Passengers, each ... ... ... ... ... ... 2 1

EXHIBIT No. 3. Estimated Value of Work done on the portion of the Mokihinui Company's Eailway used by Cardiff Company. & s. d. Bails, 100 tons at £10 ... ... ... ... ... 1,000 0 0 Sleepers, 2s. 6d. each, £2 15s. per chain, 102 chains ... ... 280 0 0 Bushfelling and clearing, 102 chains at £1 10s. per chain ... 153 0 0 Platelaying and ballasting, £4 4s. per chain, 102 chains ... 428 0 0 Tunnelling 3 chains at £187 per chain=los. per cubic yard ... 561 0 0 Bridges, £3 per lineal foot, 150ft. ... ... ... ... 450 0 0 Bock cutting, sidelaying, 5,000 cubic yards at 3s. ... ... 750 0 0 Earthwork, 33,000 cubic yards at Is. 6d. ... ... ... 2,475 0 0 £6,097 0 0

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EXHIBIT No. i. The Commissioner of Crown Lands, Nelson, to the Secretary, New Cardiff Coal Company, Christchurch. " The Westport-Ngakawau Railway Extension Act, 1890." Department of Lands and Survey, 7th August, 1894. The Eailway Commissioners, in accordance with section 5 of the above Act, having transmitted a certificate of deficiency in the working-expenses of the railway (a copy of which is hereby enclosed), I hereby give notice to the company that, in accordance with section 6 of the said Act, the amount due on deficiency being distributed pro rata among the several companies holding coal-mining leases within the area described in the Schedule of the above Act. The amount due on Section 8, Block XV., Mokihinui, and Section 8, Block 111., Ngakawau, containing 1,880 acres, is £459 Bs. 9d. This amount you are hereby required to pay to the Eeceiver of Land Eevenue for the Nelson Land District on behalf of Her Majesty, in addition to any royalty or rent payable in respect of the lease held by the company during the year ending 31st March, 1894. Jno. S. Browning, Commissioner of Crown Lands. The Secretary, New Cardiff Coal Company, Christchurch.

Assessment of Acreage pro rata on Deficiency in Working-expenses of Westpoht-Ngaka-wau Eailway for the Year ending 31st March, 1894. Neiv Cardiff Coal Company. Section 8, Block XV., Mokihinui) -, t' QQ „' Ik A^Q %CA Section 8, Block 111., Ngakawauj lj'yy A6O 40J a J Mokihinui Coal Company. Section 7, Block XV., Mokihinui) a. e. p. £ s. d. - -Section 7, Block 111., Ngakawau[ ••• 957 026 233 17 6 Section 7, Block IV., Ngakawau J Section 1, Block XVI., Mokihinui ... 640 0 0 156 8 2 Section 5, Block XV., Mokihinui ... 160 0 0 39 2 1 429 7 9 Total deficiency ... ... ... £888 16 6

Certificate. In pursuance of the sth section of " The Westport-Ngakawau Eailway Extension Act, 1890," the New Zealand Eailway Commissioners do hereby certify that the amount of the deficiency in respect of the working of the railway from Ngakawau to Mokihinui for the financial year ending 31st March, 1894, is eight hundred and eighty eight pounds sixteen shillings and sixpence sterling. Given under the seal of the New Zealand Eailway Commissioners, at Wellington, this 22nd day of May, 1894. James McKerrow. (1.5.) T. Eonayne. John L. Scott.

New Zealand Government Eailways. Account in respect of the Ngakawau to Mokihinui Eailway for portion of year from 21st August, 1893, to 31st March, 1894, inclusive; prepared in accordance with the provisions of section sof " The Westport-Ngakawau Eailway Extension Act, 1890" :—■ £ s. d. Eevenue ... ... ... ... ... ... ... 558 18 0 Working-expenses... ... ... ... ... ... 363 4 11 Credit balance ... ... ... ... 195 13 1 Interest on £35,501, cost of railway to 31st March, for 223 days at 5 per cent, per annum ... ... ... ... ... 1,084 9 7 Deficiency ... ... ... ... £888 16 6

EXHIBIT No. 5. The Chairman, Westport-Cardiff Coal Company (Limited), to The Commissioners, New Zealand Eailways. Gentlemen, — Club Hotel, Wellington, 13th August, 1894. The Commissioner of Crown Lands, Nelson, having advised that a deficiency of £888 16s. 6d. had been ascertained and certified to in respect of the working of the railway from Ngakawau to Mokihinui for the financial year ending 31st March, 1894, I shall be obliged if you will be good enough to state the rates which have been credited for all traffic on this line, and also whether any proportion of the terminal charges has been included in the revenue before declaring the above deficiency. You are no doubt aware that my company is liable for a proportion of such deficiency. I have, &c, W. H. Hargreaves, Chairman, Westport-Cardiff Coal Company (Limited The Commissioners, New Zealand Eailways, Wellington. 7—l. 9.

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EXHIBIT No. G. The Under-Secretary for Mines to the Secretary, Westport-Cardiff Coal Company, Christchurch. Sir,— Mines Department, Wellington, 26th July, 1894. I am instructed by the Hon. the Minister of Mines to direct your attention to the clauses in the coal lease to the Westport-Cardiff Coal Company, dated 10th March, 1893, which require that the output commencing from the Ist day of March, 1894, shall be 10,000 tons a year for the following two years, for the fourth year 25,000 tons, the fifth year 35,000 tons, and after that 50,000 tons a year to the end of the term, and I am to inform you that these conditions must be complied with otherwise steps will be taken for cancellation of the lease. I have, &c, C. E. Hargreaves, Esq., H. J. H. Eliott, Secretary, Westport-Cardiff Coal Company, Christchurch. Under-Secretary.

The Secretary, New Zealand Eailways, to the Engineer and Agent, Westport-Wallsend Coal Company, Ngakawau. [Handed in by Mr. Hargbeaves] . New Zealand Government Eailways, Wellington, Sir,— 27th January, 1893. In reply to your letter of 17th instant, I am directed by the Eailway Commissioners to inform you that since the date of the communication to which you refer (20th October, 1891), a reduced scale has come into operation- under which the railage rates on coal to Westport are : from Ngakawau 2s. 7d. per ton, and from Granity Creek 2s. 6d. I have, &c, The Engineer and Agent, E. G. Pilcher, Secretary. Westport-Wallsend Coal Company, Ngakawau.

The Secretary, New Zealand Eailways, to the Chairman, Eailways Committee. New Zealand Government Eailways, Wellington, Sir,— 14th August, 1834. With reference to your letter of the 10th instant respecting the Westport-Cardiff Coal Company's petition, I am directed to state that the data before the Commissioners in fixing rates on the Mokihinui Company's line were, as already stated in their memorandum of the 6th instant to the Committee—viz., (1) The cost of the line common to both the Mokihinui and Cardiff Companies, given by the Mokihinui Company at £16,500; (2) The probable output of the Cardiff Company, taken as about 15,000 tons ; (3) The passenger and goods traffic on the line which would be contingent mainly on the output of the mines, and could not amount to very much the first year. I have, &c, The Chairman, E. G. Pilcher, Secretary. Eailways Committee, House of Eepresentatives.

The Chairman, Eailways Committee, to the Eesident Engineer, Westport. (Telegram.) 24th August, 1894. Please measure and wire to me before Wednesday next exact length of Mokihinui Company's Eailway from junction with Ngakawau Extension to the junction with Westport-Cardiff Company's branch line. G. W. Eussell, Chairman, Eailways Committee.

The Eesident Engineer, Wesfcport, to the Chairman, Eailways Committee. (Telegram.) 27th August, 1894. In reply, length measured by me of Mokihinui Company's Eailway from junction with Ngakawau Extension to points of Cardiff Campany's branch line is one hundred and forty seven chains seventy links. . T. H. Eawson, Eailway Engineer, Westport. G. W. Eussell, M.H.E., Parliamentary Committee, Wellington.

Agreement between the Eailway Commissioners with the Mokihinui Coal Company (Limited) . [Handed in by Mr. Haegeeaves.] Agreement with Mokihinui Coal Company for Working Extension of Eailway from Ngakawau. Agreement made and entered into this fifth day of December, 1890, between the New Zealand Eailway Commissioners, incorporated under an Act of the General Assembly of New Zealand intituled " The Government Eailways Act, 1887 " (who with their successors and assigns are hereinafter referred to as " the Commissioners "), of the one part, and The Mokihinui Coal Company (Limited), a company duly incorporated under "The Companies Act, 1880" (which said company with its successors and assigns is hereinafter referred to as "the company"), of the other part, whereby the said parties hereto do hereby covenant and agree, the one with the other of them, as follows, viz. :—

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2. The company's present existing railway extending along the Mokihinui Eiver shall be properly completed, equipped, and maintained by and at the sole cost of the company in such a manner as, in the opinion of the Commissioners, is fit and proper to enable the Commissioners' rolling-stock and trains to be run thereon. 3. Subject to the preceding provision being fulfilled, the Commissioners' trucks and other rolling-stock may be run on the company's railway for the purpose of carrying goods and passenger traffic between any point on the Government railway from Westport to Mokihinui and any point on the company's present existing railway. And. the company shall receive, run, despatch, and deliver all such trucks and other rolling-stock, goods, and passengers from or to the Government railway extension from Ngakawau to Mokihinui to be hereafter constructed at such point or at such sidings or places as may be selected by the Commissioners for that purpose at or near the company's present existing terminus at Mokihinui. 4. On all traffic interchanged between the New Zealand Government railway and the company's railway, the company shall charge the public such rates only as shall be approved by the Commissioners, and such rates shall be published by the Commissioners in the New Zealand Gazette; and the company shall give all proper consignment-notes, receipts, and tickets, and otherwise account to the Commissioners for such traffic as the Commissioners may require. 5. The company shall be responsible for all damages occurring to the Commissioners' rollingstock when on the company's line, reasonable wear-and-tear excepted. 6. The Commissioners shall be entitled, should they require to do so, to run their own engines and trains on the company's line upon giving a week's notice to the company of their intention to do so, and such running and all other trains running and work shall be conducted on the company's line subject to the by-laws, rules, and regulations in force upon the New Zealand railways during such time as the Commissioners may continue to use the company's line. 7. The company shall pay to the Commissioners a rental of Id. per mile or fraction of a mile which each truck or van may be run, loaded or partially loaded, on' the company's railway, and at the rate of 3d. per mile or fraction of a mile which each carriage may be run on the company's railway, and at the rate of Is. 4d. per mile or fraction of a mile for each locomotive run by the Commissioners on the company's railway, such trucks, vans, carriages, or locomotives being the property of the Commissioners. 8. The company shall supply the Commissioners with such coal as they require for locomotive purposes on the railway from Westport to Mokihinui at a rate not exceeding 10s. per ton, delivered at Mokihinui to the engine or trucks, such coal to be free from slack, and fit for locomotive purposes to the Commissioners' satisfaction. 9. This agreement shall not come into operation until the company has completed and equipped its railway as hereinbefore provided, and until the extension of the Westport-Ngakawau Railway to the Mokihinui Eiver is completed and connected with the company's railway, and vested in the Commissioners, as provided in " The Westport-Ngakawau Eailway Extension Act, 1890." 10. This agreement shall remain in operation for twelve months from the date when the company has completed and equipped its railway as aforesaid or the Westport-Ngakawau Eailway Extension has been connected therewith and vested in the Commissioners, whichever event shall last happen. In witness whereof the aforesaid parties hereunto set their hands and seals the day and year first above written. Sealed with the common seal of the New Zealand Bail- y M TC way Commissioners, and signed by James McKerrow, Joseph , \ t t> i\/r Prime Maxwell, and William Mowat Hannay, the said Com- s '-) hTnnay' missioners, in the presence of— B. G. Pilohbe, Secretary, Wellington. The common seal of the Mokihinui Coal Company (Limited) was hereunto set by Thomas G. Macarthy and. / T. G. Macabthy. John Barton, two of the directors of the said company duly ' '' John Baeton. authorised in that behalf, in the presence of— Thomas Eoskbugb. P. Allen.

[Gazette notice put in by Mr. Hargreaves and published in Gazette No. 24, page 441, dated 12th April, 1888.]

" The Westland and Nelson Coalfields Administration Act, 1877." — Making Regulations fixing Tolls, Bates, Fares, <&c, to be charged.by the Mokihinui Coal Company.

. . Wm. ¥. DBUMMOND JERVOIS, Governor. BY virtue of the powers vested in me by " The Westland and Nelson Coalfields Administration Act, 1877," I, William Francis Drummond Jervois, the Governor of the Colony of New Zealand, do hereby revoke the warrant dated the twenty-ninth day of Juno, one thousand eight hundred and eighty-six, and published in the New Zealand Gazette of the eighth day of July, one thousand eight hundred and eighty-six, making regulations fixing the tolls, rates, fares, and rents to be charged by the Mokihinui Coal Company (Limited) for the carriage on and usage of the said company's railway from the Mokihinui River to the company's coal-mine, and for the storage of goods in any of the sheds or warehouses used in connection with the said railway ; and in lieu thereof I do hereby make the regulations contained in the Schedule hereto fixing the tolls, rates, fares, and rents to be hereafter charged by the Mokihinui Coal Company (Limited) for the carriage on and usage of the said company's railway from the Mokihinui Biver to the company's station near Parenga Creek, and the several subdivisions thereof enumerated in the said Schedule, in respect of the several matters and things specified in the said Schedulo, and for the storage of goods in any of the sheds or warehouses used in connection with the said railway.

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SCHEDULE. 1. The Mokihinui Coal Company (Limited) is hereby authorised to charge for carriage on and usage of the company's railway, and for storage, the following tolls, rates, and rents in respect of the matters specified hereunder, viz.:—

Proviso.—lf a line of railway from Westport joins the company's line, then these charges shall be reduced, as regards all through traffic, to rates not exceeding 20 per cent, over the ordinary rates, fares, and charges for haulage of all classes of goods and passengers, &c, prevailing on New Zealand Government Kailways of similar character, with terminal charges, as follows, i.e., — When both the leading and unloading arc done by the company the terminal charge to be Is. 6d. psr ton ; When only one, either loading or unloading, is done by the company the terminal charge to be 9d. per ton; and When neither loading nor unloading is done by the company, then no terminal charge to be made by the company. As witness the hand of His Excellency the Governor, this eleventh day of April, one thousand eight hundred and eighty-eight. T. W. HISLOP, Eor the Minister for Public Works.

EXHIBIT No. 7. [Handed in by the Hon. Mr. Hislop, with Mr. Tiddy's evidence.] Proposed Management. Interest. £ s. d. £ s. d. 1885 ... ... 80 8 0 ... 193 8 7 1886 205 0 0 ... 352 9 11 1887 ... ... 244 0 0 ... 782 0 11 1888 ... ... 313 0 0 ... 1,180 9 1 1889 ... ... 300 0 0 ... 1,310 19 2 1890 ... ... 212 0 0 ... 1,329 2 7 1891 ... ... 212 0 0 ... 1,357 9 6 1892 314 0 0 ... 1,379 9 1 1893 ... ... 440 0 0 ... 492 6 8* £2,320 8 0 ... £8,377 15 6 * To SOth April.

EXHIBIT No. 8. [Handed in by the Hon. Mr. Hislop.] Actual expenditure on old section up to June, 1887 (besides liabilities £ which we cannot have) ... ... ... ... ... 5,077 Contract No. 1, formation ... ... ... ... ... 543 Contract No. 2 (company supplying timber and rails) ... ... 2,238 Contract No. 3, formation ... ~, ... ... ... 530 Bridge, Chasm Creek ... ... ... ... ... 300 Bridge, Page's Creek ... ... ... ... ... 300 Bails, say ... ... ... ... ... ... ... 600 Sleepers, say ... ... ... ... ... ... 200 Platelaying, &c. ... ... ... ... ... ... 150 Widening road ... ... ... ... ... ... 1,000 £10,938 Slips, 1894, about ... ... ... ... ... ... 500 £11,438 This does not include cost of management, office expenses, &c, during construction, nor interest, nor engineering for 32 chains, nor repairs since beginning of 1887, nor for slips which have occurred at the Bluff.

From Mokihinui Coal Company's Wharf at Mokihinui to said Company's Old Mine near Page's Creek, or vice versd. From Mokihinui Coal Company's Old Mine near Page's Creek to Parenga Creek Station, or vice versd. For Whole Distance Ironi Mokiliinui Coal Company's Wharf at Mokihinui to Parenga Creek Station, or vice versd. iheep, freight, per head (minimum number, 20) lattle, freight, per head 3assengers, per head )rdinary goods— Wharfage, per ton or fraction of a ton ..£0 2 6 Terminal charges, including receiving and delivery, per ton or fraction of a ton ..026 Haulage, per ton or fraction of a ton !oal— Terminal charges, including receiving and delivering, per ton or fraction of a ton ..016 Haulage, per ton or fraction of a ton Storage of goods, produce, or merchandise, per ton, per day .. .. .. ..002 Minimum charge per ton .. ..010 ?or every vessel lying at the wharf, per day per ton register .. .. .. ..002 Minimum charge .. .. ..100 ?or every vessel corning for coal in ballast lying at the wharf, per day, per ton register ..00 1 £ a. d. 0 0 2 0 2 G 0 10 £ s. a. 0 0 1 0 2 G 0 10 £ s. a. 0 0 3 0 2 6 0 10 0 2 0 0 2 0 0 2 0 0 10 0 10 0 16

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COBBESPONDENCE WITH THE MOKIHINUI AND WESTPOET- CABDIFF COAL COMPANIES FUBNISHED TO THE COMMITTEE BY THE BAILWAY COMPANIES AND THE PUBLIC WOBKS DEPABTMENT. No. 1. The Chaieman, Mokihinui Coal Company, to the Eailway Commissionebs. Mokihinui Coal Company (Limited), Gentlemen, — Wellington, 18th September, 1889. I have the honour to address you on behalf of the above-named company, which is desirous of arranging for the extension of the Westport-Ngakawau Eailway to Mokihinui, there to join this company's line. To gain this object it will be necessary to obtain the co-operation of all parties concerned. You will, I am sure, perceive the importance of this work to the railway in your charge. The question to be settled by you is upon what terms the constructing company will be allowed running-powers over your line, or the terms upon which you will run over theirs, terminal charges being considered in both cases. I will deem myself highly favoured by an early reply. Your obedient servant, EUCKENE O'CONOE, Chairman, Mokihinui Coal Company (Limited). The Eailway Commissioners, Wellington.

No. 2. The Eailway Commissionees to the Chaieman, Mokihinui Coal Company. Sib,— 26th September, 1889. Eeferring to your letter of 18th September, inquiring what terms can be arranged for working the Mokihinui Company's proposed railway extension, I am directed by the Eailway Commissioners to inform you that they will be glad to give the subject close consideration whenever the railway may be ready for working. Their powers do not allow of their entering into prospective agreements. The Commissioners would be glad to see the line in question carried out, and are of opinion that if it is done the Government railway management should be prepared to facilitate the traffic. It is considered that it would be undesirable to entertain proposals for giving the company running-powers on the Government line, but other alternatives would be open. The working of private lines at the sole expense and risk of the owners has been frequently undertaken by the Eailway Department, in which case the excess of revenue over the expenses on such line is the property of the owners of the line, who fix their own rates, fares, and charges. Another course is that followed by the Midland Eailway Company, who have an agreement for interchange of traffic only at their junction with the Greymouth Eailway. (See parliamentary paper enclosed.) The Commissioners have no power to undertake to supply rolling-stock; they are dependent for working funds each year on the vote of Parliament, and for capital expenditure on sums sanctioned by the Governor in Council, at the request of the Westport Harbour Board. It is consequently not possible at present for the Commissioners to pledge themselves in any way in advance about questions involving expenditure. It would hardly be prudent for the company to reckon on the Government Eailways finding rolling-stock under these circumstances. Any rolling-stock run on to the Government line would have to be to the Government standard in every respect, and built subject to their inspection. In the case of coal, the present charge for the conveyance from the end of the Government line to Westport, including delivery to the ship, is 2s. 9d. per ton. Against such a charge would be the set-off of rental allowed in case the goods go through in the owner's trucks. Particulars of such an arrangement will be more clearly seen by reference to the parliamentary paper on Midland Eailway enclosed. (D.-2b, 1889.) Another sample of working agreement is enclosed, showing the terms on which the DuntroonHakateramea line was worked by the Eailway Department. (D.-6, 1882.) The Commissioners will gladly further the interests of the company in any way compatible with their duty as Commissioners and with the public interest. I,have, &c, E. G. Pilchee, The Chairman, Mokihinui Coal Company. Secretary.

No. 3. The Seceetaey, Mokihinui Coal Company (Limited), to the Bailway Commissionees. Mokihinui Coal Company (Limited), Gentlemen, —■ Wellington, 20th September, 1890. I have the honour to inform you that my directors propose to impress upon the Government the expediency of immediately arranging for the construction of the Westport-Ngakawau Eailway extension to Mokihinui Biver, as authorised by Act during last session of Parliament.

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I am directed by my Board to apply to you for the terms and conditions upon which you are prepared to contract with the Company for the conveyance of goods and passengers over the company's railway. I have, &c, Chas. A. Deacon, Secretary, The Bailway Commissioners, Government Buildings.

No. 4. The Eailway Commissionees to the Seceetaey, Mokihinui Coal Company. Sie,— 25th September, 1890. I have the honour to acknowledge the receipt of your letter of 20th September in reference to the extension of the Westport-Ngakawau Eailway to Mokihinui, as authorised by Act. The Railway Commissioners desire me to ask you to be good enough to furnish them with a copy of the Articles of Association of your company; upon receipt of which they will take into consideration the application made in your letter. I have, &c, E. G. Pilchee, The Secretary, Mokihinui Coal Company, Wellington. Secretary.

No. 5. The Secbetaey, Mokihinui Coal Company, to the Railway Commissionees. The Mokihinui Coal Company (Limited), Gentlemen, — Wellington, 4th October, 1890. I have the honour to acknowledge receipt of your letter of the 25th ultimo, and, in accordance with the request therein contained, beg to' enclose you herewith a copy of the Memorandum and Articles of Association of the Mokihinui Coal Company (Limited). I have, &c, Chas. A. Deacon, The Bailway Commissioners, Government Buildings. Secretary.

No. 6. The Seceetaey, Mokihinui Coal Company, to the Eailway Commissionees. The Mokihinui Coal Company (Limited), Gentlemen, — Wellington, 31st October, 1890. I had the honour of addressing you on the 20th September, and again on the 4th October, with reference to the Westport-Ngakawau Eailway extension to Mokihinui. I should be obliged if you can make it convenient to give me an early communication on the subject, as I am desirous of bringing the matter before my Board of Directors at as early a date as possible. I have, &c, The Commissioners, New Zealand Eailways. Chas. A. Deacon, Secretary.

No. 7. The Eailway Commissionees to the Seceetaey, Mokihinui Coal Company. Sie, — Ist November, 1890. Referring to your letters of 20th September and 4th October last, I have now the honour, by direction of the New Zealand Eailway Commissioners, to forward herewith, in response to your application, a draft of an agreement setting forth the terms and conditions upon which the Commissioners are prepared to contract with your company for the conveyance of goods and passengers over the Westport-Ngakawau Eailway extension to the Mokihinui River. I have, &c, The Secretary, Mokihinui Coal Company, Wellington. E. G. Pilchee, Secretary.

No. 8. The Seceetaey, New Cardiff Coal Company, to the Eailway Commissionebs. (Telegram.) Westport, Ist November, 1890. New Cardiff Coal Company, in formulating their working arrangements, respectfully ask whether requisite agreement made with Mokihinui Company. Ngakawau Extension Bill, Minister Public Works advised Mayor signing contract practically only necessity. "Work proceeding. Oblige re plv. A. D. Bayfeild.

No. 9. The Eailway Commissionees to the Secbetaey, New Cardiff Coal Company. (Telegram.) 4th November, 1890. In reply to your telegram of Ist November, draft agreement for working Ngakawau extension is now under consideration by Mokihinui Company. B. G. Pilohee, Secretary.

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No. 10. The Secretary, Mokihinui Coal Company, to the Eailway Commissioners. The Mokihinui Coal Company (Limited), Dear Sirs, — Wellington, 7th November, 1890. I have the honour to acknowledge receipt of your favour of the Ist instant, enclosing draft agreement setting forth the terms and conditions upon which you are prepared to contract with the Mokihinui Coal Company (Limited) for the conveyance of goods and passengers over the Westport-Ngakawau Eailway extension to the Mokihinui Eiver. The matter will be duly brought before my Board at their next meeting. I have, &c, The Commissioners, New Zealand Eailways. Chas. A. Deacon, Secretary.

No. 11. The Eailway Commissioners to the Secretary, Mokihinui Coal Company. Sir,— 21st November, 1890. With reference to the interview of Messrs. O'Conor and McCarthy with the Eailway Commissioners, respecting the proposed contract with your company for the conveyance of goods and passengers over the Westport-Ngakawau Eailway extension to the Mokihinui Eiver, I am now directed to hand you the enclosed amended agreement for the consideration of your directors. I have, &c, The Secretary, Mokihinui Coal Company, Wellington. B. G. Pilcher, Secretary.

■ ■ • No. 12. The Chairman, Mokihinui Coal Company, to the Eailway Commissioners. Gentlemen, — Mokihinui Coal Company (Limited), 27th November, 1890. With reference to the draft agreement enclosed in yours of the 21st instant, I have much pleasure in expressing the assent of this company thereto, subject to the following amendments as agreed to : — In clause 2, the words "completed, equipped" to be excised, with the understanding that the company's railway-line will be inspected, and that any additions required will be scheduled with the agreement and undertaken by the company. In clause 4, after the word "as," in the fourth line, the following words inserted : " are enumerated in the schedule marked B, hereto attached;" and the words " shall be," in the fifth line, to be deleted. I beg leave also to enclose a copy of the proposed Schedule B for your approval. It is based upon the minimum charge on the Westport Section, Government railway, phis 20 per cent. This is in accordance with the Proclamation in the Government Gazette, 30th May, 1888, folio 441. I have, &c, The New Zealand Eailway Commissioners. Thos. G. Macaethy, Chairman.

Schedule B.—Mokihinui Coal Company's Line : Bates on Through Traffic. Average Minimum. Classes A, B, C, D, E, F, H, per ton ... 4s. 6d., phts 20 per cent., ss. 4d. „ P, Q, „ ... Is. 9d., „ „ 2s. Id. Timber, per 100 super. ... ... ... os. 10d., „ „ Is. Od. Firewood, per truck ... ... ... 9s. Od., „ „ lls. Od. Cattle, per head ... ... ... 2s. 6d., „ „ 3s. Od. Sheep, „ ... ... ... os. 2d., „ „ os. 2Jd. Passengers, each ... .. ... Is. 9d., „ „ 2s. Id.

No. 13. The Eailway Commissioners to the Chaieman, Mokihinui Coal Company. Sir,— 2nd December, 1890. I have the honour, by direction of the Eailway Commissioners, to acknowledge the receipt of your letter of the 27th ultimo, respecting the draft agreement for working the traffic on the extension to the Mokihinui Eiver of the Westport-Ngakawau Eailway, and to inform you, in reply, that as section 2 only provides for the company doing any work on their line that is necessary to allow the trucks to run safely, the Commissioners do not see that there is any need to eliminate the words to which you take exception. With regard to the schedule of rates suggested by you, the Commissioners think that, with the exception of the coal-rates, they are fairly acceptable, but that the coal-rate should not exceed Is. 6d. per ton. I have, &c, E. G. Pilchee, The Chairman, Mokihinui Coal Company, Wellington. Secretary.

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No. 14. The Chairman, Mokihinui Coal Company, to the Eailway Commissioners. Gentlemen, — Wellington, 2nd December, 1890. I have the honour to acknowledge the receipt of yours of this day, respecting the draft agreement, and, in reply, I have pleasure in informing you that our company will accept the agreement as you suggest (section No. 2), upon the explanation given in the letter under reply, and the reduction in the coal-rate to a maximum of Is. 6d. per ton for the term of the agreement only, and without prejudice. Mr. John Barton and myself have been appointed to sign the agreement and fix the company's seal thereto, which we will be glad to do as soon as possible, as Mr. Barton is about leaving Wellington for a short time. I have, &c, Thos. G. Macarthy, Chairman. The Commissioners, New Zealand Government Eailways.

No. 15. The Railway Commissioners to the Chairman, Mokihinui Coal Company. Sir,— 4th December, 1890. In accordance with your letter of the 2nd instant, I am now directed by the Eailway Commissioners to forward, for the signature of yourself and co-director, Mr. Barton, the agreement for the working of traffic on the company's line. I have, &c, E. G. Pilcher, Secretary. The Chairman, Mokihinui Coal Company, Wellington.

. . . No. 16. The Eailway Commissioners to the Chairman, Mokihinui Coal Company. Sir,— sth December, 1890. I beg to acknowledge receipt of the agreement (A) for working the Mokihinui Coal Company's Eailway, duly signed by your directors, and have now the honour to transmit the counterpart thereof executed by the Eailway Commissioners. With regard to the attached schedule (B) of rates which has been handed in, I am directed to inform you that the Eailway Commissioners think it premature to publish any final schedule of rates until the Government line is completed and the business of the district is more fully understood ; but so far as they are at present informed, they think there will be no need to modify the schedule except to the extent of applying the ordinary rules for the conveyance of quantities under a ton, and for the general conduct of the business. I have, &c, E. G. Pilchbr, The Chairman, Mokihinui Coal Company (Limited), Wellington. Secretary.

Enclosure A in No. 16. Agreement with Mokihinui Coal Company, for working Extension of Eailway from Ngakawau. Agreement made and entered into this fifth day of December, 1890, between the New Zealand Eailway Commissioners, incorporated under an Act of the General Assembly of New Zealand intituled " The Government Eailways Act, 1887 " (who with their successors and assigns are hereinafter referred to as "the Commissioners"), of the one part, and the Mokihinui Coal Company (Limited), a company duly incorporated under "The Companies Act, 1880 " (which said company, with its successors and assigns, is hereinafter referred to as "the Company"), of the other part, whereby the said parties hereto do hereby covenant and agree, the one with the other of them, as follows, viz.:— 2. The Company's present existing railway extending along the Mokihinui Eiver shall be properly completed, equipped, and maintained by and at the sole cost of the Company in such a manner as, in the opinion of the Commissioners, is fit and proper to enable the Commissioners' rolling-stock and trains to be run thereon. 3. Subject to the preceding provision being fulfilled, the Commissioners' trucks and other rolling-stock may be run on the Company's railway for the purpose of carrying goods and passenger traffic between any point on the Government railway from Westport to Mokihinui and any point on the Company's present existing railway. And the Company shall receive, run, despatch, and deliver all such trucks and other rolling-stock, goods, and passengers from or to the Government railway extension from Ngakawau to Mokihinui, to be hereafter constructed at such point or at such sidings or places as may be selected by the Commissioners for that purpose at or near the Company's present existing terminus at Mokihinui. 4. On all traffic interchanged between the New Zealand Government railway and the Company's railway the Company shall charge the public such rates only as shall be approved by the Commissioners, and such rates shall be published by the Commissioners in the New Zealand Gazette; and the Company shall give all proper consignment-notes, receipts, and tickets, and otherwise account to the Commissioners for such traffic as the Commissioners may require. 5. The Company shall be responsible for all damages occurring to the Commissioners' rollingstock when on the Company's line, reasonable wear-and-tear excepted.

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6. The Commissioners shall be entitled, should they require to do so, to run their own engines and trains on the Company's line upon giving a week's notice to the Company of their intention to do so; and such running and all other trains running and work shall be conducted on the Company's line subject to the by-laws, rules, and regulations in force upon the New Zealand railways during such time as the Commissioners may continue to use the Company's line. 7. The Company shall pay to the Commissioners a rental of Id. per mile or fraction of a mile which each truck or van may be run, loaded or partially loaded, on the Company's railway, and at the rate of 3d. per mile or fraction of a mile which each carriage may be run on the Company's railway, and at the rate of Is. 4d. per mile or fraction of a mile for each locomotive run by the Commissioners on the Company's railway, such trucks, vans, carriages, or locomotives being the property of the Commissioners. 8. The Company shall supply the Commissioners with such coal as they require for locomotive purposes on the railway from Westport to Mokihinui at a rate not exceeding 10s. per ton, delivered at Mokihinui to the engine or trucks, such coal to, be free from slack, and fit for locomotive purposes to the Commissioners' satisfaction. 9. This agreement shall not come into operation until the Company has completed and equipped its railway as hereinbefore provided, and until the extension of the Westport-Ngakawau Eailway to the Mokihinui Eiver is completed and connected with the Company's railway, and vested in the Commissioners, as provided in " The Westport-Ngakawau Eailway Extension Act, 1890." 10. This agreement shall remain in operation for twelve months from the date when the Company has completed and equipped its railway as aforesaid or the Westport-Ngakawau railway extension has been connected therewith and vested in the Commissioners, whichever event shall last happen. In witness whereof the aforesaid parties hereunto set their hands and seals the day and year first above written. Sealed with the common seal of the New Zealand Eailway T , r v ,-, - ■ i • n i t MT , T r. James McliEEßOw. Commissioners, and signed by James McKerrow, Joseph , * j p Tyr AXWELI Prime Maxwell, and William Mowat Hannay, the said Com- \" '/ " " „ missioners, in the presence of — E. G. Pilcheb, Secretary, Wellington. The common seal of the Mokihinui Coal Company (Limited) was hereunto set by Thomas G. Macarthy and John Barton, , , T. G. Macaethy. two of the directors of the said Company duly authorised in *• ''' John Baeton. that behalf, in the presence of— Thomas Boskeuge. P. Allen.

Enclosure B in No. 16. The Mokihinui Coal Company (Limited), 27th November, 1890. Schedule B. Mokihinui Coal Company line : Eates on through traffic, — Classes A, B, C, D, E, F, H, per ton 5 4 „ N, P, andQ, „ 1 6 Timber, per 100ft. superficial ... ... ... ... ... 10 Firewood, per truck ... ... ... ... ... ... 11 0 Cattle, per head... ... ... ... ... ... ... 3 0 Sheep, „ .. ... ... ... ... ... ... 0 2J Passengers, each ... ... ... ... ... ... 2 1 Thomas G. Macaethy.

No. 17. The Bailway Commissionees to the Chairman, Mokihinui Coal Company. Sib,— 6th December, 1890. In reply to your request that the New Zealand Railway Commissioners should approve a schedule of maximum rates, fares, and charges for the Mokihinui Eailway, to be charged on the Company's railway for traffic interchanged between the Company's railway and the Government railway from Westport to Mokihinui, in pursuance of the agreement entered into between the New Zealand Eailway Commissioners and the Mokihinui Coal Company (Limited), dated sth December, 1890, I am directed by the Eailway Commissioners to inform you that they approve of the following schedule, to be in force during the operation of the agreement before mentioned, namely:—■ B—l. 9.

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Schedule of the Maximum Fares, Eates, and Charges to be charged upon the Mokihinui Coal Company's Eailway for Traffic interchanged between the Company's Eailway and the Government Eailway from Westport to Mokihinui, in pursuance of an Agreement made between the Mokihinui Coal Company (Limited) and the New Zealand Government Eailway Commissioners, dated sth December, 1890, during the operation and subject to the conditions thereof. s. a. Goods of Classes A, B, C, D, E, F, H, per ton 5 4 Goods of Classes N, P, Q, per ton ... ... ... ... 16 Timber, per hundred superficial feet ... .. ... ... 10 Firewood, per truck-load ... ... ... ... ... 11 0 Cattle, per head ... ... ... ... ... ... 3 0 Sheep, per head ... $ ... ... ... ... ... 0 2| Passengers, each ... ... ... ... ... ... 2 1 The minimum charge for any consignment of goods to be Is., and the minimum fare for any passenger to be Is., and subject to these provisions the preceding schedule shall operate in accordance with and subject to the provisions of the regulations made by the New Zealand Government Eailway Commissioners in pursuance of the powers conferred upon them by " The Government Eailways Act, 1887," published in the supplement to Gazette No. 30, 30th May, 1890. I have, &c, E. G. Pilcher, Secretary. The Chairman, Mokihinui Coal Company (Limited), Wellington.

No. 18. The Engineer-in-Chief to the Eailway Commissioners. 12th December, 1890. Ee Westport-Ngakawau Railway Extension. The Minister having been informed that the Mokihinui Coal Company has entered into the contract with the Eailway Commissioners required (by section 2 of the "The Westport-Ngakawau Eailway Extension Act, 1890 ") to be made prior to the construction of the said railway being taken in hand, would you kindly state, for information and record, whether this information is correct. William H. Hales, The Eailway Commissioners. Acting for Engineer-in-Chief.

No. 19. The Eailway Commissioners to the Engineer-in-Chief. 12th December, 1890. Ee Westport-Ngakaivau Railway 'Extension. In reply to your memorandum of this date, I am directed by the Eailway Commissioners to advise you that the contract with the Mokihinui Coal Company, required by " The Westport-Ngakawau Eailway Extension Act, 1890" (section 2), was duly executed on the sth December, 1890, and a copy of the same is transmitted herewith for the information of the Hon. Minister for Public Works. The Engineer-in-Chief, Wellington. E. G. Pilchee, Secretary.

No. 20. The Secretary, New Cardiff Coal Company, to the Eailway Commissioners. Gentlemen, — Westport, 6th January, 1891. At a meeting of shareholders of the New Cardiff Coal Company held this day, I was instructed to communicate with you with reference to the rate of haulage of coal, Mokihinui to Westport. This company's property is so situated that it will require to use, approximately, one mile and three-quarters of the Mokihinui Coal Company's line. An agreement having been signed between yourselves and the company (Mokihinui) in terms of the Westport-Ngakawau Eailway Extension Act, the shareholders of this company respectfully ask for definite information as to the cost of the through-rate from point of junction with the Mokihinui Company's line to Westport. The agreement entered into is, I understand, for twelve months. Is this term from date oil agreement or date of either opening or completion of the line ? As important business negotiations are pending for the opening of our mine immediately, may I ask for a reply that may reach here by return trip of the " Grafton," which leaves Wellington on Friday evening next, 9th instant. I have, &c, The Eailway Commissioners, Wellington. A. D. Bayfeild, Secretary.

No. 21. The Secretary, New Cardiff Coal Company, to the Eailway Commissioners. (Telegram.) 7th January, 1891 Referring mine of sixth, I am instructed respectfully ask how much of through rate will be payable Mokihinui Company, using hundred and forty chains their line. The Eailway Commissioners, Wellington. A. D. Bayfeild.

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No. 22. The Eailway Commissionees, to the Secretary, New Cardiff Coal Company. (Telegram.) 9th January, 1891. In reply to your letter of the 6th instant, and telegram of 7th, I am directed by the Eailway Commissioners to state that the railway rate per ton for coal from the terminus of the Government Eailway at Mokihinui to Westport will be about 3s. 2d. The maximum rate which the Mokihinui Coal Company can charge on their line is Is. 6d. a ton. Thus, the total through rate would not exceed 4s. Bd. The agreement with the Mokihinui Coal Company is for twelve months from the date of the connection of their line with the Government line. A. D. Bayfeild, Esq., Westport. E. G. Pilcher, Secretary.

No. 23. The Seceetaey, Mokihinui Coal Company, to the Eailway Commissioners. The Mokihinui Coal Company (Limited), Gentlemen, — Wellington, 12th January, 1891. I have the honour to acknowledge your favour of the 6th December enclosing schedule of maximum fares, rates, and charges to be charged upon the Mokihinui Coal Company's railway for traffic interchanged between the company's railway and the Government railway, &c. I am instructed by my Board to state that they consider the same satisfactory. Thanking you for the consideration which you have always shown to my directors. I have, &c, The New Zealand Eailway Commissioners, Wellington. Chas. A. Deacon, Secretary.

. . . No. 24. The Engineeb-in-Chief to the Eailway Commissioners. 14th January, 1891. Ee Ngakawau Railway Extension. The Minister for Public Works will be obliged if you will kindly remark on enclosed copy of a telegram from Mr. Bayfeild, with reference to the agreement between the Commissioners and the Mokihinui Coal Company, for his information. W. H. Hales, The New Zealand Eailway Commissioners. Acting for Engineer-in-Chief.

Enclosure in No. 24. Westport, 10th January, 1891. On behalf New Cardiff Coal Company have respectfully to make representations anent West-port-Ngakawau Eailway Extension Act and agreement between Commissioners and Mokihinui Coal Company. This agreement, while possibly consistent with letter of law, certainly is not with what is believed to be spirit of Act—namely: Seasonable arrangements for public services. Agreement so made that Commissioners do not provide through haulage, but leave Mokihinui Company the right to fix a maximum charge of eighteenpence per ton for coal. With opponents to business it may be expected that maximum will be enforced. In our case we want to use approximately mile and three-quarters Mckihinui Company's line, for which Commissioners say company can charge eighteenpence. Commissioners' charge for remaining twenty-six miles being three and twopence. What is respectfully asked is that Government will step in, under Westland and Nelson Coalfields Administration Amendment Act, clause 3, and fix the rate company can charge. The settlement of this question is urgent, as important business negotiations are pending and numbers of men are waiting development Cardiff Mine. As a matter of fact, has not the Governor in Council power to fix the rate. Your early reply will be esteemed a favour. The Hon. the Colonial Secretary, Wellington. A. D. Bayfeild.

No. 25. The Eailway Commissionees to the Engineer-in-Chief. 26th January, 1891. Ngakawau Baihuay Extension. In reply to your memorandum of the 14th January, I am directed to state that the Eailway Commissioners forwarded to the Minister for Public Works a copy of the agreement with the Mokihinui Company on the 12th December last. They are of opinion that this agreement is a proper one, having regard to the public interest, and that it fulfils the spirit and letter of the WeStportNgakawau Eailway Extension Act. The Commissioners, under the powers of the 4th clause of the agreement, have approved a rate of Is. 6d. per ton for coal conveyed on the company's line. The statement made by Mr. Bayfeild, that he " wants to use approximately a mile and three-quarters of the Mokihinui Company's line, for which Commissioners say company can charge Is. 6d.," does not convey a correct impression of the arrangement. The Mokihinui Company is entitled to charge Is. 6d. per ton for the use of its line and for all the services performed in conveying the coal, including the use of rolling-stock —a very different matter. No provision is made for the mere use of the line alone under the agreement which the Commissioners have made. If Mr. Bayfeild is dis-

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satisfied with this it may be possible for the Government to permit of his constructing a separate line under the provisions of the Westland and Nelson Coalfields Administration Act, and to find his own means of working it. He has no right to expect to use other people's capital and plant without paying a reasonable price for it. The Engineer-in-Chief, Wellington. E. G. Pilcher, Secretary.

No. 26. The Secretary, New Cardiff Coal Company, to the Hon. the Minister for Public Works. Sir, — New Cardiff Coal Company, Westport, 3rd February, 1891. Referring to a telegraphic communication of date the 14th January, in which I am informed that my telegram to the Colonial Secretary of a few days earlier date cannot be dealt with, pending consultation with the Railway Commissioners, I have, by direction of the shareholders in the above company, the honour to apply to you, Sir, for information as to what is proposed to be done in the matter of the question of haulage over the Mokihinui Coal Company's line, and also to respectfully submit a fact or two in support of the contention of the utter unreasonableness of that company having even the semblance of power to make a charge up to a maximum of Is. 6d. per ton for haulage of coal over approximately a mile and three-quarters of their line. In the first instance, I would respectfully submit that it was never contemplated, either by the Act under which the company's line was authorised and constructed—viz., "The Westland and Nelson Coalfields Administration Act, 1877," and Amendment Act of 1881 —or the more recently passed Act, "The Westport-Ngakawau-Bailway Extension Act, 1890," that the Mokihinui Coal Company should have power to fix rates for carriage of " passengers, animals, or goods " ; on the contrary, the power is distinctly reserved to the Governor to fix " tolls, rates and fares," and rightly so, as a preservation of the " public safety, interest, and welfare." In support of this view, I would mention the fact that the haulage for the W'aimangaroa Coal Company is partly, i.e., for 83 chains, over a private line—viz. : that part from the main line to the Wellington Mine, and owned by the Westport Colliery Company—for the use of which that company receives from the Bailway Commissioners 1-Jd. per ton haulage of coal; the Waimangaroa Company do not know the Westport Colliery Company in the matter. It is a right recognition of " public safety, interest, and welfare," and it is this recognition that is sought for the New Cardiff Coal Company, and not to be left to a rival company, not necessarily unfriendly, but still an opponent in business. This company respectfully urges that a fair and highly-remunerative rate to the Mokihinui Coal Company would be 2d. per ton for a distance under two miles. The extension of the railway, Ngakawau to Mokihinui, has now began; and, to be in readiness to send coal from our mine over the railway as soon as completed involves early settlement of this question of haulage—in fact, I can go further, Sir, and assure you that delay is keeping idle a number of colliers, labourers, and others, to the detriment of a number of individuals, loss to the district, and retarding a great colonial industry in which the colony is very much concerned. The shareholders of this company have always consistently maintained that the property could not be successfully worked till rail-communication with Westport was assured, and thus help to build up the general value and importance of the railway and harbour works in connection with Westport. In conclusion, I am instructed to respectfully ask that this matter may have your early attention, and to say that, if necessary, representatives of the company are ready to proceed to Wellington to urge their views in this matter. 1 have, &c, A. D. Bayfeild, Secretary. The Hon. the Minister for Public Works, Wellington.

No. 27. The Minister for Public Works to the Bail way Commissioners. Eeferred to the Railway Commissioners for consideration ; matter urgent. —B. J. S. 6/3/91. Be Agreement entered into by Bailway Commissioners with Mokihinui Coal Company in respect of Traffic over that Company's Bailway up the Mokihinui Biver. E ngineer-in-Chief. " The Westport-Ngakawau Bailway Extension Act, 1890," makes the construction of the line between Ngakawau and Mokihinui contingent upon a contract being first entered into by the Mokihinui Coal Company with the Bailway Commissioners, conferring upon the latter power to run trains for the conveyance of passengers and goods over the Company's railway upon such terms, for such period, and subject to such conditions as the Commissioners may deem satisfactory. In pursuance of this provision a contract has been entered into between the Company and the Commissioners (ccpy on file below), which, however, the New Cardiff Company contends does not comply with the spirit of the Act. The Commissioners state that they consider the agreement entered into " a proper one, and that it fulfils the letter and spirit of the Act." There would, however, seem to be some ground for the Company's allegations in the matter, as the following will show : — 1. The Act requires that the contract shall empower the Commissioners to run trains over the Company's railway; but the contract entered into provides that the Company shall carry on all traffic over its own line, paying to the Commissioners a stated sum for the use of the Government rolling-

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stock. The only provision which authorises the Commissioners to run trains over it is clause 6, which empowers them, " should they require to do so," to run their own engines and trains on the line on giving a week's notice to the Company of their intention so to do. It seems, therefore, that instead of the running of trains over the Company's railway by the Commissioners being the ordinary and regular procedure, as the Act would seem to require, it is apparently to be a mere contingent right, to come into operation or not, as the Commissioners may determine. 2. The New Cardiff Company also considers, and not unfairly so, I think, that the Act implies that the Commissioners should control the traffic for the whole distance from the Mokihinui Company's mines to Westport, and grant a through rate for the same; but the contract sets up a dual control, and empowers the Company to levy a rate of Is. 6d. per ton for carriage over its line, and the Eailway Commissioners to levy their ordinary rate from Mokihinui in addition. This, of course, will increase the charge considerably, thus : — The charge for coal per ton, according to the Eailway Commissioners' published rates, from Mokihinui to Westport (twenty-seven miles) would be 4s. 7d. The charge for each mile hauled over the Mokihinui Company's line under the two tariffs would therefore be (inclusive of this rate of 4s. 7d.) :—

I may, perhaps, remark further that the contract entered into has the effect of placing the Company really in a better position (as regards haulage-rates on coal) than it was in before, and that, I think,.can scarcely have been the intention of the Legislature; the evident object of the Act being to place some restrictions upon the Company in the matter of rates and charges, rather than the reverse. The Commissioners have approved a rate for coal of Is. 6d. per ton for haulage over the whole or any part of the Company's line (this is maximum rate, but enforcement or not is left to discretion of Company); whereas under the schedule previously in force the Company could not charge this rate unless the coal was brought from some point higher up the line than the Company's old mine near Page's Creek, the rate for points on the seaward-side of Page's Creek being Is. only. These rates, furthermore, were only to apply as long as the line remained unconnected with Westport, a footnote being appended to the schedule to the effect that, on the line being connected with Westport, the approved rates (as regards through traffic) were to be reduced to rates not exceeding 20 per cent, over the Government rates. Another point that I should perhaps draw attention to is that the agreement entered into is for one year only, so that, were its terms ever so advantageous, the enjoyment of them is not insured for very long. Still another point is that the agreement need never come into operation at all, if it does not suit the convenience of the Company to let it. The Company has simply to omit to " complete and equip" its railway to the satisfaction of the Eailway Commissioners, and the agreement never comes into operation at all. (Vide clause 9.) The New Cardiff Company raises the question as to whether the Ngakawau Eailway Extension Act of 1890 has the effect of ousting the operation of " The Westland and Nelson Coalfields Administration Act, 1877." If it has, then the agreement entered into between the Eailway Commissioners and the Mokihinui Coal Company must be left to operate as it may, I presume; but if not, then the Governor can make rates for the Company's line that will over-ride the rates fixed by the Commissioners. I think the opinion of the Law Officers should be taken as to whether the powers of the Governor, under the 27th section of " The Westland and Nelson Coalfields Administration Act, 1877," are in any way curtailed or affected by the passing of " The Westport-Ngakawau Eailway Extension Act, 1890." 23rd February, 1891. H. J. H. Blow.

Hon. Minister for Public Works. The agreement made by the Eailway Commissioners with the Mokihinui Coal Company is strictly in accordance with the letter of the Westport-Ngakawau Eailway Extension Act; still the conditions of this agreement may have a tendency to nullify somewhat the intentions of the Legislature as expressed in the Act, as it was evidently not intended to authorise the expenditure of £36,000 of public money on the extension of the railway to connect with the Mokihinui Company's line on the strength of an agreement allowing the Commissioners to fix the rates of freight and have running powers over the Company's railway for one year only. 25th February, 1891. William H. Hales.

This memorandum was referred to the Crown Law Officers, whose opinion was to the effect that section 2 of " The Westport-Ngakawau Eailway Extension Act, 1890," controls to some extent section 27 of " The Westland and Nelson Coalfields Administration Act, 1877," but the latter section is not curtailed as to the local traffic of the Company. Also, that there appeared to be no legal authority for clause 4 of the contract, by which the Commissioners required the Company to charge the public such rates as the Commissioners might approve, the Commissioners' powers being limited to terms and conditions between the Company and themselves.

One Mile. Two Miles. Three Miles. F' ur Miles. 'hrough mileage basis )n the basis of the contract enterea into by the Commissioners Difference s. a. 4 7 6 1 1 6 s. a. 4 9 G 1 I I I s. a. 4 10 G 1 s. a. 5 0 G 1 1 4 1 3 1 1

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No. 28. The Chief Commissioner, Eailways, to the Hob. the Ministee for Public Woeks. 7th March, 1891. Mokihinui Railioay Company's Contract. The Commissioners are at a loss to know what the expression " on such conditions as they think fit " can be interpreted to cover if it does not cover the essential condition necessary, viz., the power to regulate the charges for passengers and goods carried in the trains and rolling-stock. The entire section is a pretence if it does not cover that. The Commissioners have been of opinion from the first that the section is loose and unsatisfactory. They regret that their protests against it before it was passed, were passed by unacknowledged in any way, and they regret that the Government should have thought fit to insert a provision affecting their duties without consulting them in any way. The agreement, if ultra vires, presumably is of no effect. It may be advisable to consult the Crown Law Officer as to whether is is desirable to apprise the company that, being now advised that this portion of the agreement is ultra vires, the company is relieved from any restrictions supposed to be imposed by it, and similarly that any privileges presumed to have been conferred are of no effect. The Commissioners do not engage to find trucks and engines to run on the company's line, and it will now be for them to consider whether they will altogether decline to do so unless the charges are regulated in such a way as they consider equitable. Should the Government desire the Commissioners to exercise control of the traffic and rates, similar powers to those in " The Westland and Nelson Coalfields Amendment Act, 1881," should be given them by Act. It may be as well to note that it is doubtful whether the Mokihinui Eailway has been legally constructed in accordance with the provisions of the Westland and Nelson Coalfields Administration Act. This point requires looking into before the Solicitor-General's opinion is taken as final.. . . James McKeeeow, Chief Commissioner, The Hon. the Minister for Public Works.

No. 29. The Seceetaey, New Cardiff Coal Company, to the Eailway Commissionees. Gentlemen, — Westport, 21st March, 1891. Re my telegram (copy below) yesterday, I am instructed to write by the outgoing mail and respectfully ask if you will kindly reply to the telegram at your earliest convenience. The settlement of the question of complete haulage is now our only obstacle to arrangements which will lead to our getting to work : and we are informed by the Hon. the Minister of Mines that by a fresh agreement we have to deal with the Commissioners only for haulage, inclusive of that portion of the Mokihinui Company's line which we require to use. If necessary, representatives of the company are prepared to wait upon you in support of their view that, judging from similar arrangements existing in the district, the rate should not exceed 2d. per ton for any distance up to two miles. I am, &c, A. D. Bayfeild, The Eailway Commissioners, Wellington. Secretary.

(Telegram.) Westport, 20th March, 1891. Cardiff Company. Understanding from Minister of Mines fresh arrangements made for haulage over Mokihinui Company's line, and direct dealing with you available, respectfully ask whether you can now quote through rate inclusive use approximately hundred and twenty chains company's line. If not fixed can we be heard on matter. The Eailway Commissioners, Wellington. A. D. Bayfeild.

No. 30. The Eailway Gommissionees to the Seceetaby, New Cardiff Coal Company. (Telegram.) 2oth March, 1891. Beplying to your letter of 21st, I am directed by the Commissioners to inform you that no fresh arrangement has been made re traffic on Mokihinui Company's line; but the subject is under reconsideration, and you will be informed should any modification be made. It would not serve any useful purpose your coming to Wellington at present. E. G. Pilchee, Secretary. A. D. Bayfeild, Secretary, New Cardiff Coal Company, Westport.

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No. 31. The Secretaey, New Cardiff Coal Company, to the Eailway Commissionees. Gentlemen, —■ New Cardiff Coal Company, Westport, 28th March, 1891. I am obliged for your telegram of 25th instant, and I am instructed, by resolution of shareholders in the company, to inform you of our position, which briefly is as follows : — To enable work to proceed it is necessary to be satisfied that our coal can be brought to Westport at a reasonable cost. The rate you have already quoted is regarded as satisfactory, if the rate over the Mokihinui Company's line can also be as reasonably fixed, a rate that we respectfully submit should not exceed 2d. per ton for distance required, and a rate that should be highly lucrative to the company. In November last the company—Mokihinui Coal Company—offered to sell us half interest in their line for half-cost, plus 6 per cent. To this offer we replied : " Cannot entertain, for following reasons : First, Nearly two-thirds your line outside our requirements. Second, Joint ownership of line, and third party to deal with (Commissioners), might possibly complicate matters. Thirdly, We consider your responsibilities will be greatly abated when through system established, to which development Cardiff Company must necessarily assist." The offer, I may say, was a fair and reasonable one, and certainly inconsistent with the company's apparent wish to have an extortionate rate of haulage charged. The company having made an offer to sell, and the Government, I believe, having power to resume, may I venture to ask would not the public interests be best served if Commissioners took over the line. At the request of our company, Sir James Hector sent Mr. McKay to examine our ground, we having done more prospecting than any other company to prove the value of the field; and I hope shortly to be able to supply you with a copy of Mr. McKay's report, which will, unless I am very much mistaken, go a long way to prove that the ownership of the line by the Government will be of public benefit, and profit to the State. We ■ can • satisfy you that, once the question of haulage is settled, development and work generally will be gone on with, a company for that purpose being ready within the colony. It will be esteemed a favour if some satisfactory word can be received from you ere the 4th April. I am, &c, The Eailway Commissioners, Wellington. A. D. Bayfeild, Secretary.

No. 32. The Chief Commissioner of Eailways, to the Hon. the Ministee for Public Wobks. Sib,— 7th April, 1891. The Eailway Commissioners beg to inform you that, in consequence of the doubts which have been expressed as to the validity of their agreement with the Mokihinui Eailway Company, they have deemed it advisable to acquaint the company in terms of the copy of letter enclosed. I have, &c, James MoKeeeow, Hon. Minister for Public Works, Wellington. Chief Commissioner.

No. 33. The Eailway Commissioneks to the Chairman, Mokihinui Coal Company. Sib,— 7th April, 1891. With reference to the agreement of sth December, 1890, made with your company for working the extension of the railway from Ngakawau by the New Zealand Eailway Commissioners, and my letter to you of 6th December, 1890, approving certain rates : I am directed to state that the Commissioners are informed that doubts have arisen both as to their power to authorise the rates in question, and as to the company's railway having been constructed nnder proper powers. The Commissioners, therefore, think it desirable to remind you that your company would, if these doubts are confirmed, be relieved from the restrictions with respect to rates which such agreement and letter may purport to impose; and, similarly, that any privileges presumed to have been conferred in such respect would be of no effect. I have, &c, E. G. PILCHEE, The Chairman, Mokihinui Coal Company (Limited), Wellington. Secretary.

No. 34. The Secketaey, New Cardiff Coal Company, to the Eailway Commissionees. (Telegram.) Westport, 11th April, 1891. Instbuotbd to ask whether any settlement haulage Mokihinui line yet effected. Oblige reply. A. D. Bayfeild.

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No. 35. The Assistant Under-Secretaey, Public Works, to the Secretary, New Cardiff Coal Company. Sir,— Wellington, 14th April, 1891. Eo Hates fixed for Haulage of Coal over the Mohihinui Coal Company's liailway. In reply to your letter of 3rd February last, on the subject of the rates fixed by the Eailway Commissioners for the haulage of coal over the Mokihinui Coal Company's Eailway, in pursuance of an agreement entered into between the Company and the Commissioners in terms of section 2of " The Westport-Ngakawau Eailway Extension Act, 1890." I have now the honour, by direction of the Minister for Public Works, to state that he is advised that so much of clause 4 of the agreement referred to as purports to fix the rates to be charged to the public by the Company for carriage over its railway is ultra vires of the Commissioners, and therefore of no legal effect. I have, &c, H. J. H. Blow, A. D. Bayfeild, Esq., Secretary, Assistant Under-Secretary for Public Works. New Cardiff Coal Company, Westport.

No. 36. The Eailway Commissioners to the Secretary, New Cardiff Coal Company. (Telegram.) Wellington, 15th April, 1891. No settlement yet effected re haulage Mokihinui line. B. G. Pilcheb.

No. 37. The Sbcbbtaey, New Cardiff Coal Company, to the Hon. the Ministeb for Poblic Works. See,— ' ' Westport, 16th May, 1891. I have the honour to acknowledge receipt of your favour of the 14th ultimo, and am instructed by my shareholders to thank you for the same, and, at the same time, I beg respectfully to trouble you further in the matter. Your communication clearly sets out the agreement made between the Eailway Commissioners and the Mokihinui Coal-rnining Company is ultra vires, and I understand that due notice of this fact has been given to the Company by the Commissioners. The ground is so far clear, and I am brought back to my original contention —namely, that the power to fix these rates rests solely with the Governor in Council; and, with the view of having further and sound legal advice upon the matter, I applied to Messrs Fell and Atkinson, of Nelson, for their opinion. This opinion I beg respectfully to hand you, trusting that you will peruse it, and return to me at your convenience. Supported by this opinion I would now venture to respectfully ask you, Sir, to move in the matter of adjusting the rate as provided for by law, and as clearly provided for by the gazetted regulation of the 12th April, 1888, in which this proviso is made: "If a line of railway from "Westport joins the Company's line then these charges shall be reduced," &c.; and, in passing, I should like to point out an important fact—viz., the gazetted rate as the matter now stands is Is. per ton, not Is. 6d., for there would be no terminal charge, inclusive of which the rate as gazetted is Is. 6d. In connection with the question of rates, I would like to say, inasmuch as the Eailway Commissioners' present fixed rate from the end of the Mokihinui Company's line, inclusive of terminal charges, is 3s. 2d. per ton for a distance of, approximately, twenty-eight miles, the additional charge for haulage over, say, two miles, should not exceed 2d. per ton. Seeing that our dealings for haulage will be with the Eailway Commissioners for the main part, and that their rate of 3s. 2d. is regarded as satisfactory (at any rate for a start), I trust that you may, Sir, see your way to have such extra rate as is required to run over part of the Mokihinui Company's line fixed with the concurrence of the Commissioners, and consistently with their rate. I venture this suggestion, that we may simply have to deal with the Commissioners, and so save having two parties to deal with—one of whom (the Company) would be ordinary opponents in business. As this question of haulage is one of paramount importance in formulating our arrangements, and as we require to construct a short branch line, I am requested to respectfully ask that early steps may be taken to have the matter permanently settled. I have, &c, A. D. Bayfeild, Secretary, New Cardiff Coal Company. The Hon. the Minister for Public Works, Wellington.

Enclosure in No. 37. Messrs. Fell and Atkinson to the Seckbtabt, New Cardiff Coal Company. Deae Sir,— Nelson, 9th May, 1891, From the information which you have given us, we understand that the Mokihinui Coal Company constructed a certain railway under the provisions of " The Westland and Nelson Coalfields Administration Act, 1877." The charges which the company was authorised to make were defined by regulations made by the Governor under the authority of section 27 of the Act of 1877,

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and published in the Gazette of the 29th June, 1886, and amended by regulations published in the Gazette of the 11th April, 1888. By "The Government Eailways Act, 1887," the officers known as the New Zealand Eailway Commissioners were created, and these Commissioners have amended or purported to amend these last-named regulations, and to substitute a different scale of charges. We do not know what shape this amendment has taken, but at any rate it has been done under the powers conferred or assumed to have been conferred under the Act of 1887. You ask us to advise whether these amendments by the Commissioners are not ultra vires, and whether the power to amend the regulation of 1888 is not vested in the Governor in Council alone. The answer appears to turn chiefly upon the meaning of section 20 of the Government Eailways Act. Under this section all powers conferred upon the Governor under "The Public Works Act, 1882," or under any other Act in force prior to the passing of that Act, " or under any special Act so far as any such Act respectively relates to the management, working, and maintenance of railways," shall be exercised by the Commissioners instead of the Governor. The grammatical construction of this part of the section as it stands is faulty, but in words it clearly includes the Mokihinui Eailway. The interpretation clauses, however, interpret the word "railways" as railways by that Act vested in the Commissioners, and, therefore, it appears clear that the powers conferred by section 20 can be exercised in respect of such railways only, and, accordingly, that the only person having authority to amend the regulations affecting the Mokihinui Eailway, which is not so vested in the Commissioners, remains as before in the Governor. We are, &c, Fell and Atkinson.

No. 38. The Acting Undee-Seceetaey, Public Works, to the Seceetaey, New Cardiff Coal Company. Sib,— 17th June, 1891. Ee Bates fixed for the Haulage of Goal over the Mokihinui Goal Company's Bailway. I am directed by the Minister for Public Works to acknowledge the receipt of your letter of 16th ultimo, forwarding a legal opinion by Messrs Fell and Atkinson, of Nelson, in reference to the powers of the Eailway Commissioners in the matter of fixing rates for the haulage of coal, &c, over the Mokijiinui Coal Company's Eailway, also requesting that the gazetted maximum rates for carriage on the railway referred to might be materially reduced. In reply, I am to state that the opinion forwarded with your letter has evidently been written under an entire misapprehension of the facts of the case, as instead of the Commissioners having acted in the matter " under the powers conferred or assumed to have been conferred under the Government Eailways Act of 1887," as stated in the opinion, the Commissioners really acted under the provisions of section 2 of "The Westport-Ngakawau Eailway Extension Act, 1890." It is probably needless to observe, therefore, that, as the opinion has been given under an entire misapprehension of the facts of the case, it is, of course, of no real value. As regards reducing the rates for carriage on the Mokihinui Coal Company's Eailway, I am to state that it appears to the Minister that there is no real justification for such a step at present, nor will there be probably until " a line of railway from Westport joins the Company's line " (as mentioned in the proviso to the regulations at present in force), as, until that event happens, no alteration in the position of matters will have taken place that would seem to warrant any interference in the matter by His Excellency the Governor. When the proper time to take action arrives, your representations on the subject will receive full consideration. The original opinion of Messrs. Fell and Atkinson is returned herewith as requested. I have, &c, H. J. H. Blow, Acting Under-Secretary for Public Works. A. D. Bayfeild, Esq., Secretary, New Cardiff Coal Company, Westport.

No. 39. The Undeb-Seceetaey, Public Works, to the Chaieman, Mokihinui Coal Company. Sib,— Ist November, 1892. Preferring to the agreement entered into by your Company with the Eailway Commissioners, dated sth December, 1890 (and particularly to clause 2 thereof), relative to the working of your Company's railway-line and the extension of the Westport-Ngakawau Bailway, I am directed by the Minister for Public Works to ask if you will kindly state for his information what steps have been taken to give effect to the agreement, or when steps are proposed to be taken in the matter. I have, &c, H. J. H. Blow, Under-Secretary for Public Works. The Chairman, Mokihinui Coal Company, Wellington.

No. 40. A. D. Bayfeild, Esq., to the Hon. the Minister for Public Woeks. (Telegram.) 10th December, 1892. Me. O'Conor has -written a letter to the Mokihinui people-, saying : Haulage rate over Mokihinui Company's line is fixed at fourpence. Is this correct. Kindly reply. Bayfeild, The Hon. E. J. Seddon. Westport. q T q

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No. 41. A. D. Bayfeild, Esq., to the Hon. the Ministee for Public Woeks. (Telegram.) 12th December, 1892. Find laws on statements incorrect. O'Conor's letter says rate fixed, but does not mention amount. Bayfeild, The Hon. E. J. Seddon, Wellington. Westport.

No. 42. The Seceetaey, Mokihinui Coal Company, to the Undee-Secbetaey, Public Works. The Mokihinui Coal Company (Limited), Wellington, Sie,— 13th December, 1892. I have the honour to acknowledge receipt of your favours of the Ist ultimo and the Ist instant: the former referring to the agreement entered into by the Company and the Eailway Commissioners, and the latter in respect to the claim re the dredge " Hapuka." My Board, as you are probably aware, have of late been very much engaged in consequence of a Committee of Inquiry having been set up by the shareholders to go into the present and past management of the Company. This inquiry has been of such an engrossing character, that the Board have been unable, at present, to give the subject-matter of your letters the serious attention that such important subjects require. I have, &c, Mokihinui Coal Company (Limited), Chas. A. Deacon, Secretary. The Under-Secretary for Public Works, Wellington.

No. 43. The Undee-Seceetaey, Public Works, to the Chaieman, Mokihinui Coal Company. Sie, — Public Works Department, Wellington, 14th December, 1892. I am directed by the Minister for Public Works to call your attention to my letter of the Ist ultimo, inquiring what steps had been taken to give effect to the agreement entered into by your Company with the Eailway Commissioners, relative to the working of your Company's railway, and to request the favour of an early reply. I have, &c, H. J. H. Blow, Under-Secretary for Public Works. The Chairman, Mokihinui Coal Company, Wellington.

No. 44. The Hon. the Minister for Public Wobks to A. D. Bayfeild, Esq. (Telegram.) 14th December, 1892. Govebnment knows nothing of rate you mention having been fixed for Mokihinui Eailway. Possibly Company have fixed it themselves. A. D. Bayfeild, Esq., Westport. E. J. Seddon.

No. 45. The Secbetaey, New Cardiff Coal Company, to the Hon. the Ministee for Public Wobks. (Telegram.) 14th December, 1892. Thanks in considering question. Kindly refer mine of May 16, 1891. Will be Wellington Saturday morning. Will esteem it a favour if can then be heard on question. o'Conor making most irrational statements. Bayfeild, Hon. E. J. Seddon, Wellington. Westport.

No. 46. The Secbetaby, New Cardiff Coal Company, to the Hon. the Minister for Public Wobks. (Telegram.) 15th December, 1892. Will bring papers supporting rates mentioned by me. Bayfeild, Hon. E. J. Seddon, Wellington. Westport.

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No. 47. The Hon. the Minister for Public Woeks to A. D. Baypeild, Esq. (Telegram.) 15th December, 1892. Your telegram to hand. On inquiry I find that the Warden has not returned lease for approval. Under these circumstances the New Cardiff Company cannot be considered interested persons, as contemplated by section 4of the Westland and Nelson Coalfields Act of last session. The Company must first be lessees before any matter in dispute can be dealt with. ' A. D. Bayfeild, Esq., Westport. E. J. Seddon.

No. 48. The Under-Secretary for Public Works to the Chairman, Mokihinui Coal Company. 25th January, 1893. Sir, — Ee Mokihinui Goal Company's Hallway. Eeferring to my letter of the Ist November last, inquiring what steps had been taken to give effect to the agreement entered into between your Company and the Eailway Commissioners relative to the working of your Company's railway, and to your reply thereto of the 13th ultimo, stating that you had been unable up to that time to give the matter the serious attention that such an important subject required, I have now the honour to request that you will be so good as to favour me with a definite reply at your very early convenience, for the information of the Hon. Mr. Seddon, who will be returning to town to-morrow. I have, &c, The Chairman, Mokihinui Coal Company, Wellington. H. J. H. Blow. Note by Under-Secretary for Public Works. Mr. Deacon, the Secretary of the Company, called 17/2/93, and stated that the Company had now obtained the further capital required, and had engaged Mr. J. D. Gillies to supervise the work required,.and .would commence operations immediately.—H. J. H. B.—lB/2/93.

No. 49. The Chairman, Westport-Cardiff Coal Company, to the Eailway Commissioners, The Westport-Cardiff Coal Company (Limited), Christchurch, Gentlemen, — 13th July, 1893. In prospect of the opening of the Ngakawau extension of railway to Mokihinui, and the rates that may be fixed for haulage on that portion of the Mokihinui Eailway Company's line to be used by this company: should the Governor authorise you to fix such rates, I should esteem it a favour if you would kindly permit this company to be heard upon the question before the rates are decided upon. In the meantime, I beg to draw your attention to Order in Council as published in the New Zealand Gazette of 12th April, 1888, at p. 441, with special reference to the proviso therein. I have, &c, W. H. Hargreaves, Chairman. The Commissioners, New Zealand Eailways, Wellington.

No. 50. The Eailway Commissioners to the Chairman, Westport-Cardiff Coal Company. New Zealand Government Eailways, Wellington, Sir,— 18th July, 1893. I have the honour, by direction of the New Zealand Eailway Commissioners, to acknowledge receipt of your letter dated 13th instant, respecting the fixing of rates for carriage of your company's coal over the Mokihinui Company's Eailway, and am instructed to inform you that the subject thereof will receive consideration. I have, &c, E. G. Pilcher, Secretary. The Chairman, Westport-Cardiff Coal Company, Christchurch.

No. 51. The Secretary, Mokihinui Coal Company, to the Eailway Commissioners. The Mokihinui Coal Company (Limited), Sib,— Wellington, 12th August, 1893. I have the honour to request that you will kindly arrange for an early inspection of the Mokihinui Coal Company's railway line. The company have about completed the works required to run their coal and goods traffic, and are naturally anxious to start operations without any unnecessary delay. I shall be glad to know that our railway has been approved by your engineer, so that there may be no difficulty in arranging for through traffic, the Company using the Commissioners' rollingstock. I would mention that it is not the Company's present intention to undertake any passenger traffic. I have, &c, Chas. A. Deacon, Secretary. The Chief Commissioner, New Zealand Eailways, Government Buildings, Wellington.

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No. 52. The Bailway Commissioners to the Secretary, Mokihinui Coal Company. Sir,— 16th August, 1893. With reference to your letter of the 12th instant, receipt of which I had the honour to acknowledge on the 15th, in regard to the inspection of your Company's line, I am directed to request that you will notify the Bailway Commissioners the name of the Company's agent at Mokihinui who is authorised to deal with the Commissioners' officer at Westport, in respect to the fulfilment of the terms of the agreement entered into between the Commissioners and your Company on sth December, 1890, for the interchange of traffic and rolling-stock between the Government Bailway and the Company's line. The District Bailway Manager at Westport has been directed to examine your Company's line, and as soon as he certifies that it is fit, and the Commissioners know who is to act for the Company at Mokihinui or Westport, the agreement can be made operative. I have, &c, The Secretary, Mokihinui Coal Company, E. G. Pilcher, Secretary. Featherston Street, Wellington.

No. 53. The Secretary, Mokihinui Coal Company (Limited), Wellington, to the Bailway Commissioners. Gentlemen, — Wellington, 19th August, 1893. I have the honour to acknowledge receipt of your favour of the 16th instant, and, in reply, have pleasure in informing you that Mr. Michael Straw, of Mokihinui, is the authorised Agent of the Company at Mokihinui to deal with your officer at Westport. I have, &c, Chas. A. Deacon, Secretary. •The Bailway Commissioners, Government Buildings, Wellington.

No. 54. The Bailway Commissioners to the Under-Secretary, Public Works Department. 27th August, 1893. Ngakawaiir-Mokihinui Extension, Station Accommodation. With reference to my memorandum of the 7th instant. As the above extension has now been vested in the Bailway Commissioners, will you be good enough to issue to them authority for station and other accommodation, as below, required to complete the line: — Mokihinui Station — £ Stationmaster's house ... ... ... ... ... ... 200 Station building ... .., , ... ... ... ... ... 150 Latrines ... ... ... ... ... ... ... ... 25 Semaphore signal ... ... ... ... ... ... ... 50 20-ton Pooley's weighbridge ... ... ... ... ... 200 Total ... ... ... ... ... £625 E. G. Pilcher, Secretary. The Under-Secretary, Public Works Department.

No. 55. The Secretary, Mokihinui Coal Company (Limited), to the Bailway Commissioners. The Mokihinui Coal Company (Limited), Sir,— Wellington, 2nd September, 1893. I shall be much obliged if you will favour me with a line in answer to my letter of the 12th ultimo, with respect to the inspection of the Mokihinui Coal Company's Bailway. The Company is now ready to start its output of coal, and I am desirous of knowing that our railway line has met with the approval of the Inspector. I have, &c, Chas. A. Deacon, Secretary. The Chief Commissioner, New Zealand Bailways, Wellington.

No. 56. The Bailway Commissioners to the Secretary, Mokihinui Coal Company (Limited). Sir,— 4th September, 1893. With reference to your letter of the 2nd instant, in "regard to the inspection of your company's line, I am directed by the Bailway Commissioners to inform you that the Inspecting Officer reports that the line is fit and in good order for Government rolling-stock to run upon it, and that a certificate to this effect has been issued to your Company's authorised agent at Mokihinui. The agreement referred to in my letter of the 16th ultimo will operate from the 2nd instant. I have, &c, E. G. Pilcher, Secretary. The Secretary, Mokihinui Coal Company (Limited), Featherston Street, Wellington.

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No. 57. The Under-Secretary, Public Works, to the Eailway Commissioners. Public Works Department, Wellington, 30th January, 1894. Ee Westport-Ngakawau Bailway Extension, Station Accommodation. With reference to your memoranda of the 27th August last and the 21st ultimo, on the above subject, I am directed by the Minister for Public Works to state that, as he understands the Mokihinui Coal Company has now placed its railway in an efficient state of repair, so as to render it fit for the Government rolling-stock to run upon, it is probable that you will now desire to work the line yourselves, in accordance with the evident intention of the Legislature when " The West-port-Ngakawau Eailway Extension Act, 1890" was passed (vide section 2); if so, it would probably be best to have whatever terminal station accommodation is required erected at what would then be the real terminus of the line—namely, the Mokihinui Company's mines. The Minister will be glad if the Commissioners will kindly give this aspect of the matter their onsideration, and let him know the conclusion they arrive at. H. J. H. Blow, The Eailway Commissioners, Wellington. Under-Secretary for Public Works.

No. 58. The Eailway Commissioners to the Under-Seceetaey, Public Works. 16th April, 1894. Ee Westport—Ngakaivau liaihvay Extension, Station-accommodation. Eepereing to your memorandum, 93-2568, of the 30th January last, wherein you refer to the probability of the Eailway Commissioners desiring to work the Mokihinui Company's private line, I am directed by the Commissioners to state that they have no special desire to do so; and, were there only ene- coal- company to use the line, it would be quite satisfactory that the Mokihinui. Company continue in the future to deliver the coal-trucks on the sidings at Mokihinui as heretofore, but, as the Cardiff Company are almost ready to deliver coal, it becomes necessary under section 3 of "The Westland and Nelson Coalfields Administration Amendment Act, 1881," to determine what payment shall be made by the Cardiff Company to the Mokihinui Company for the use of its railway. The Commissioners have to point out that in dealing with this the whole question of rates, of the present condition and future working and maintenance of the line will come under consideration. From the opinions of the Solicitor-General, given on the 4th and sth March, 1891, it appears that section 2 of "The Westport-Ngakawau Eailway Act, 1890," does not give the Commissioners the necessary powers to deal fully with these questions ; before they can do so the Governor will have, in terms of section 4 of "The Westland and Nelson Coalfields Administration Act 1877 Amendment Act, 1892," to confer on the Commissioners the powers of the 3rd section of " The Westland and Nelson Coalfields Administration Amendment Act, 1881." Should the Minister not see his way to confer these powers on the Commissioners, they will still be willing to advise him on the questions arising ; at the same time, they think it would simplify matters were they enabled to deal directly with the companies interested. E. G. Pilcher, Secretary. The Under-Secretary for Public Works, Wellington.

No. 59. The Under-Secretary, Public Works, to the Eailway Commissioners. Public Works Department, Wellington, 26th April, 1894. Mokihinui Baihvay: Working-powers proposed to be vested in Bailway Commissioners. At the request of Mr. Bayfeild, I have the honour to intimate to the Commissioners that the Minister for Public Works proposes to advise His Excellency the Governor to vest in the Commissioners the powers which, under the 3rd section of "The Westland and Nelson Coalfields Administration Amendment Act, 1881," and the further Amendment Act of 1892, the Governor was empowered to confer upon the Commissioners, as regards running traffic over the Mokihinui Coal Company's railway. H. J. H. Blow, The Eailway Commissioners, Wellington. Under-Secretary for Public Works.

No. 60. The Eailway Commissionees to the Chairman, Mokihinui Coal Company. Sir — 27th April, 1894. Adverting to correspondence between the Eailway Commissioners and your company, in 1891, with respect to certain rates which had been authorised by the Commissioners under a misapprehension of .their powers, I am now directed to inform you that, subsequent legislation having supplied the requisite authority, and the Commissioners having been informed that His Excellency the Governor will be advised to confer upon them the powers of the 3rd section of

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"The Westland and Nelson Coalfields Administration Amendment Act, 1881," they will now be glad to have from you an expression of your company's views as to the proper rates to be charged upon the company's line for general traffic, and for the conveyance of coal belonging to other companies, over your railway. I have, &c, E. G. Pilcher, Secretary. The Chairman, Mokihinui Bailway and Coal Company, Wellington.

No. 61. The Acting-Seceetaey, Mokihinui Coal Company, to the Eailway Commissionees. The Mokihinui Coal Company (Limited), Wellington, Deae Sik,— 10th May, 1894. In reply to your letter of the 27th ult., wherein you notify my company that it is proposed to confer upon the Commissioners the powers of the 3rd section of " The Westland and Nelson Coalfields Administration Amendment Act, 1881," and also request an expression of my company's views as to proper rates to be charged upon the company's line, I am directed to inform you that my company disapprove of the proposal therein expressed. With respect to rates and charges, we submit we are entitled to the same rates and charges (Is. 9d. per ton, &c.) as are in existence on the New Zealand Government railways, with an addition of 20 per cent., as provided by Order in Council issued in Neiv Zealand Gazette of the 12th April, 1888, page 441; and, further, we forward herewith the data respecting the cost of construction of our line, &c, as requested by the Commissioners.* We are prepared to enter into negotiations to sell the line, subject to the approval of shareholders, payment for which we are prepared to take in debentures with a reasonable currency, bearing interest at a rate per centum per annum to be agreed upon. I have, &c, W. A. Tiddy, Acting-Secretary. The Secretary, the New Zealand Eailway Commissioners, Government Buildings. * Statement enclosed showing total cost of construction as £29,477 13s. 7d.

No. 62. A. D. Bayfeild, Esq., to the Eailway Commissionees. Sies,— Wellington, 15th May, 1894. On behalf of the Westport-Cardiff Coal Company I have pleasure in informing you that, subject to settlement of haulage-rates, the Company will be in position to send in coal in the first week in June next. I have also pleasure in confirming my verbal statement to your Secretary, Mr. Pilcher, that our output for the first year should be fully 30,000 tons. Being informed by the Under-Secretary of the Public Works Department, Mr. Blow, that the Order in Council conferring powers on the Commissioners to run over the line of the Mokihinui Company is signed by His Excellency the Governor, I have now most earnestly and respectfully to ask that the question of rates be settled as speedily as possible. I have this morning seen Mr. Blair, the Chairman of the Mokihinui Company, and understand from that gentleman that the required statement by the Commissioners has been sent in, and that from the Company's side the matter is now left with the Commissioners : this being so, it only now remains for me to respectfully ask for an interview upon the one subject-matter of rates. I have, &c, The Eailway Commissioners, Wellington. A. D. Bayfeild.

No. 63. The Undeb-Secbetaby, Public Works, to the Bailway Commissionebs. Public Works Department, Wellington, New Zealand, 16th May, 1894. Mokihinui Coal Company's Bailway. In pursuance of former correspondence on the subject of running-powers over the Mokihinui Coal Company's railway being conferred upon the Commissioners, I now forward copy of a warrant under the hand of His Excellency the Governor, dated 7th instant, conferring these powers accordingly. The warrant was published in the New Zealand Gazette of 10th instant. H. J. H. Blow, The Eailway Commissioners, Wellington. Under-Secretary for Public Works,

Enclosure in No. 63. Glasgow, Governor. Whereas by the fourth section of " The Westland and Nelson Coalfields Administration Act 1877 Amendment Act, 1892," it is, among other things, declared that the powers which, under the third section of " The Westland and Nelson Coalfields Administration Amendment Act, 1881,"

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the Governor may confer on the Minister, may be conferred by the Governor upon the New Zealand Bailway Commissioners, and that the said Commissioners may thereupon, from time to time, do all the things which, under the said section, the Minister would have been empowered or authorised to do : Now, therefore, in pursuance and exercise of the hereinbefore-recited power and authority, I, David, Earl of Glasgow, the Governor of the Colony of New Zealand, do hereby confer upon the New Zealand Bailway Commissioners the powers which, under the third section of " The Westland and Nelson Coalfields Administration Amendment Act, 1881," the Governor might have conferred upon the Minister for Public Works in respect of a certain railway from the wharf at Mokihinui to the Mokihinui Coal Company's mines in the Provincial District of Nelson, and which said railway has been constructed or deemed to have been constructed, under the provisions of " The Westland and Nelson Coalfields Administration Act, 1877," by the Mokihinui Coal Company (Limited). As witness the hand of His Excellency the Governor, this seventh day of May, one thousand eight hundred and ninety-four. B. J. Seddon. Minister for Public Works.

No. 64. The Acting-Seoeetaey, Mokihinui Coal Company, to the Bailway Commissioners. The Mokihinui Coal Company (Limited), Wellington, Sir,— 23rd May, 1894. In accordance with a request made by the Bailway Commissioners at an interview with the Directors of my Company yesterday, I now have the honour to inform you that the Mokihinui Coal Company's line from Mokihinui to Seddonville Crossing, at County Boad, has cost the company £16,513 ss. 9d. I have, &c, W. A. Tiddy, Acting-Secretary. The Secretary to the Bailway Commissioners, Government Buildings. Note.—Certain work is still required to be done at the Bluffs, at wharf; probable cost, £500.

No. 65. The Bailway Commissioners to the Secretary, Mokihinui Coal Company. Sot,— 25th May, 1894. Beferring to the recent interview of your directors with the Bailway Commissioners, and to your letter of the 23rd instant, stating the cost of that part of the company's line between the Government line and Seddonville, the Commissioners have to submit for the consideration of your directors the following alternatives as to the working of the line : — (1.) On the assumption that your company work the line, the Commissioners would fix the charge for coal from the Cardiff Company at Is. 3d. per ton, delivered by you at the sidings on the Mokihinui Station, Government line, this charge to be leviable on all coal taken over the line from the Cardiff Company's siding; the minimum for the twelve months to be 10,000 tons, or, say, an average of 830 tons per month. This to be paid for each month, any deficiency in any month's output to be credited from the overplus of the average in any succeeding month's output. All receipts from passengers or merchandise to be received by your company at the following rates :— s. a. Each passenger ... ... ... ... ... • • • ... 1 0 Sheep, per head ... ... ... ... ... • • • ... 0 2 Cattle, per head ... ... ... ... ... ... ... 2 6 All goods, per ton ... ... ... ■■• •■• ... 2 6 For use of Government rolling-stock, your company to pay Commissioners Id. per mile per truck, and 3d. per mile per passenger-carriage. Mileage to be counted one way only. (2.) On the assumption that the Commissioners work the line, your company will be charged sd. per ton from your mine to the sidings at Mokihinui Station, Government line. Passengers and goods to be charged as above, 50 per cent, of the gross takings to be retained by the Commissioners. On all coal carried over your company's line from the Cardiff Company's mine, Is. to be paid your company, and to be paid each month, on a minimum of 830 tons. Any deficiency to be credited from the overplus of the average in any succeeding month's output. The line to be put in good working-order to the satisfaction of the Commissioners, and thereafter the ordinary maintenance to be undertaken by the Commissioners, your company providing all material required for renewals and repairs. All slips to be removed by the Commissioners at the expense of your company. The agreement, in either case, to be for twelve months only, I have, &c, E. G. Pilchbr, Secretary. The Secretary, Mokihinui Coal Company (Limited), Wellington.

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No. 66. A. D. Bayfeild, Esq., to the Eailway Commissionees. Sir,— Wellington, 30th May, 1894. Ee the Westport-Cardiff Goal Company and the Haulage question. The loss to the Company through inability to make its business arrangements for sale of coal, owing to the non-settlement of the one question of haulage, has now become so serious, involving, as it probably does, the curtailment of mining operations, that I must now respectfully beg to ask if you will be good enough to place me in possession of the actual position of matters, in so far as to your intention as to what rates you think of charging the Company, inclusive of charge over the Mokihinui Company's line, and when it may be reasonably expected that haulage will begin. It is absolutely necessary that I place my Directors in possession of the desired information, and I will esteem it a great favour if you will enable me to do so by outgoing mail to-day. In view of the Dublic statement that the Commissioners will in the course of a few days all be absent from Wellington, may I ask whether, subject to proposed rates being satisfactory, it would be possible for you to come to an understanding with the Company, even of a temporary character, so as to enable work to proceed. Knowing that the Commissioners are desirous of having things settled, I reluctantly send this communication, but the great importance of the matter to the Company I represent leaves me no alternative. I have, &c, A. D. Bayfeild.

No. 67. The Acting-Seceetaky, Mokihinui Coal Company, to the Eailway Commissioners. The Mokihinui Coal Company (Limited), Sie,— Wellington, May 31st, 1894. Your letter of the 25th instant, containing proposed rates, &c, for the working of the Mokihinui Coal Company's Eailway, has been considered by the Board of Directors, and before giving their decision as to whether they would prefer to work the line or not, they would respectfully ask the Commissioners to reconsider the proposed charges the Directors raise objections to, and also to favour them with an explanation to the various queries raised. Taking the clauses of your letter seriatim, the first one is the charge of Is. 3d. for coal from the Cardiff Company. Will the Commissioners define what the duties are to be for this Is. 3d. ? Does the Mokihinui Company have to do shunting? The minimum of 10,000 tons is thought to be too small considering what the line has cost the company, and the Directors suggest that 25,000 tons be the minimum quantity to be paid upon. The Directors also think that the charge of Is. 3d. for the carriage of the coal a very small one in comparison with the Government charges on short lines and similar ones. They would also ask that payment be made weekly, the same as to the Government, and not monthly, as suggested. Is the money to be collected from the Government or the Cardiff Company ? Eespecting the rate, " All goods per ton, 2s. 6d." Does this include loading and unloading? We would also respectfully ask why 2s. 6d. is the suggested charge per ton on general merchandise, whereas the Government rate is ss. 4d. ? Eeferring to the second portion of your letter, the Directors ask if the half of sd. is to be returned to the Company, as being half the gross takings, or, are the gross takings mentioned intended to be exclusive of the charge of sd. per ton for carriage of our coal; also, is the Is. per ton for Cardiff coal to be considered as part of the gross takings, and so one-half to be retained by the Commissioners? As to the last clause of your letter, the directors would suggest that the Commissioners' engineer define to the Mokihinui Company the works required to be done to place the company's line in good working order, to the satisfaction of the Commissioners. In conclusion, the Directors respectfully ask why the tariff given is below that of Government and other lines of similar character ? Seeing the large expenditure of capital in opening up the Mokihinui District to settlement, and the financial benefit conferred upon the Cardiff Company and district generally, the Directors hope these reasons will be sufficient to claim further consideration in the interests of the Mokihinui Company. I have, &c, W. A. Tiddy, Acting Secretary. The Secretary, New Zealand Eailway Commissioners, Government Buildings. Note. —As at present advised, Directors think the charges suggested too low generally; but they are making inquiries into the matter.

No. 68. The Bail way Commissionees to the Seceetaey of the Mokihinui Coal Company (Limited). Sie,— Wellington, 31st May, 1894. With reference to your letter of this date, in regard to the proposal for working your Company's line, I have the honour, by direction of the Railway Commissioners, to inform you that the charge of Is. 3d. per ton is to cover cost of hauling empty wagons from the sidings at Mokihinui Station and delivering same on the Cardiff Company's siding, and vice versa, receiving loaded coal-wagons on Cardiff Company's siding, hauling same to Mokihinui Station, and the necessary shunting at that station to place the loaded wagons on the sidings as may be required.

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The minimum of 10,000 tons is fixed in conformity with the minimum output prescribed in the Cardiff Company's lease for the first year. The Commissioners do not think they should exceed this limit as a minimum. The Commissioners consider the charge of Is. 3d. a ton a fair one. They would prefer that four-weekly settlements be made, as all their traffic returns are made up so. The Commissioners think 2s. 6d. per ton on all goods a fair charge. This to include all services. A similar service from Waimangaroa to Conn's Creek is done for Is. 3d. per ton. If the Commissioners work the line, the sd. per ton for coal will go entirely to the Commissioners. The Is. per ton on Cardiff Company's coal to go entirely to your company. An officer of the Commissioners will examine the line, and report what is necesssary to put it in proper condition for permanent working ; but, as the line in its present condition can be worked temporarily, no delay need be incurred waiting for the officer's report. The Commissioners consider the tariff proposed for your Company's line reasonable. The charges are not below those for other lines similarly situated. I have, &c, E. G. Pilcher, Secretary. The Secretary, Mokihinui Coal Company (Limited), Wellington.

No. 69. ,The Eailway Commissioners to the Chairman, Mokihinui Coal Company. Sir,— Ist June, 1894. Eeferring to the interview which you and the Directors of your Company had with the Chief Commissioner this afternoon, I have now the honour, by direction of the Eailway Commissioners, to confirm the amendments then agreed upon with respect to the arrangement for working your Company's line. (1.) The rate for all goods other than coal to be 3s. per ton instead of 2s. 6d. (2.) The rates for coal carried over your Company's line from the Cardiff Company's mine to be as follows, per ton :Up to 15,000 tons per annum, Is. 4d.; all over 15,000 tons per annum, Is. 3d. Of the Is. 4d. rate, your Company will receive Is. Id. per ton up to 15,000 tons, the payment to be made on a minimum of 10,000 tons per annum. On all quantities over 15,000 tons your Company will receive Is. per ton. The Commissioners will consider the question of taking security for the due payment of carriage by the Cardiff Company for a minimum output of 10,000 tons, and will take advice as to whether they can enforce this. The charge for rental of wagons does not apply in event of line being worked by Commissioners. I have, &c, B. G. Pilcher, Secretary. The Chairman, Mokihinui Coal Company, Wellington.

No. 70. The Acting-Secretary, Mokihinui Coal Company, to the Eailway Commissioners. The Mokihinui Coal Company (Limited), Wellington, Sir,— 2nd June, 1894. I have the honour, by direction of the Chairman, to acknowledge the receipt of your letter of the 31st ultimo, and to inform you that the terms embodied therein are accepted by the Board of Directors, subject to the amendments contained in your communication of the Ist instant. The Board also desire that the Commissioners should work the Company's line. A general meeting of the shareholders of the Company is called for Wednesday next to consider the financial position of the Company, and to devise means necessary to provide funds to carry on the business ; and, as this agreement with the Commissioners will form an important item, I am desired to request that you will be kind enough to embody the terms and conditions in a communication under the seal of the Commissioners, which can be presented to the meeting if required. I have, &c, W. A. Tiddy, Acting-Secretary. The Secretary, New Zealand Eailway Commissioners, Government Buildings.

No. 71. The Bailway Commissioners to the Sbcketaey, Mokihinui Coal Company. Sib,— 2nd June, 1894. I have the honour, by direction of the Eailway Commissioners, to acknowledge the receipt of your letter of this date, intimating the acceptance by your Company of the terms proposed by the Commissioners for working your Company's line, as amended at yesterday's interview. An agreement embodying these terms will be at once drawn up and submitted to your Company for signature, but the seal of the Commissioners cannot be attached until there are again two Commissioners in Wellington. I have, &c, E. G. Pilchee, Secretary. The Secretary, Mokihinui Coal Company (Limited), Wellington. 10—I. 9.

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No. 72. The Eailway Commissioners to A. D. Bayfeild, Esq. Sir,— 4th June, 1894. Eeplying to your letters of the 15th and 30th May, I have now the honour to inform you that the Eailway Commissioners have come to an agreement with the Mokihinui Eailway Company, under which the Company's line will be worked by the Commissioners, and the following rates will be charged for the carriage of coal from the Cardiff Company's mine to the Mokihinui Station, viz.: Up to 15,000 tons per annum, Is. 4d. per ton; all over 15,000 tons per annum, Is. 3d. per ton. The minimum charge to your company will be as for 10,000 tons per annum, whether such qnautity be carried or not, and any deficiency in the proportionate quantity hauled at the end of each four-weekly accounting period must be paid by your Company ; but if in any preceding period an overplus on the average proportion for the period (say, 770 tons) has been carried, credit will be given as against such deficiency for the overplus, or such portion as may be available. The ordinary settlement for freight due by your company to be made by weekly ledger account under the usual conditions, as set out on the attached form (G/47), and all consignments to be received and carried under the gazetted regulations. Will you be good enough to advise the Commissioners of your Directors' concurrence in these terms. I have, &c, E. G. Pilcher, Secretary. A. D. Bayfeild, Esq., Westport-Cardiff Coal Company, Wellington.

No. 73. A. D. Bayfeild, Esq., to the Eailway Commissioners. Sirs, — Wellington, 4th June, 1894. I beg to acknowledge receipt of yours of even date, and sorry I am to have to inform you that I am greatly disappointed in the rates you have quoted, rates that will, I fear, very much encumber the Cardiff Company in its operations, and are much beyond any conceivable rate based upon the value of that part of the Mokihinui Company's line that will be used by the Cardiff Company. Your advice will, however, be submitted to my Directors to-morrow; in the meantime I would respectfully ask that the matter be considered in abeyance, and be not gazetted till my Directors have decided as to what course they will take. I am, &c, The Eailway Commissioners, Wellington. A. D. Bayfeild.

No. 74. The Eailway Commissioners to the Secretary, Mokihinui Coal Company. Sib,— 6th June, 1894. With reference to your letter of the 2nd instant, I have the honour, by direction of the Eailway Commissioners, to forward for execution by your Company memorandum of agreement for working traffic over your Company's line of railway. When the memorandum is executed please return it to this office. I have, &c, E. G. Pilcher, Secretary. The Secretary, Mokihinui Coal Company, Featherston Street, Wellington.

Enclosure in No. 74. Ageeement with Mokihinui Coal Company for Working Extension of Kailway from Mokihinui. Memorandum of Agreement made and entered into between the New Zealand Eaiiway Commissioners, incorporated under an Act of the General Assembly of New Zealand, intituled "The Government Eailways Act, 1887 " (who are hereinafter referred to as " the Commissioners "), and the Mokihinui Coal Company (Limited), a company duly incorporated under " The Companies Act, 1880," (which said company, with its successors and assigns, is hereinafter referred to as " the Company "), for the conveyance of passengers, parcels, and goods over the Company's line : in exercise and pursuance of the fourth section of " The Westland and Nelson Coal-fields Administration Act 1877 Amendment Act, 1892," and of all other powers enabling them in this behalf. 1. For the purposes of this agreement, the Company's line of railway shall be deemed to commence at the terminus of the Government railway at Mokihinui, and to terminate at the Company's coal bins on the same line of the Company's railway. 2. The Commissioners shall provide all motive-power, rolling-stock, and labour for working traffic over the Company's line. 3. The Commissioners shall keep the rails in good order, and to the correct level. 4. The Company shall bear the cost of removals of slips, new materials for renewal of permanent-way, and of maintenance of structures. 5. For coal from the Company's mine, hauled over the Company's line, the Commissioners to receive sd. per ton. 6. For coal from the Westport-Cardiff Coal Company's Mine, hauled over the Company's line, the Company to receive Is. Id. for every ton up to 15,000 tons per annum, and Is. per ton for every ton over 15,000 tons per annum.

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7. For passengers and goods not otherwise specified, hauled over the Company's line, the charges to be :— s. a. Passengers, each... ... ... ... ... ... ... 1 0 Goods (not otherwise specified herein), per ton ... ... ... 3 0 Minimum charge ... ... ... ... ... ... ... 0 6 Sheep, per head (with a minimum of 20) ... ... ... ... 0 2 Cattle, per head ... ... ... ... ... ... ... 2 6 These charges to be divided equally between the Commissioners and the Company. 8. The Commissioners will collect all charges as per this agreement for haulage of traffic over the Company's line. 9. Passengers and goods will be conveyed over the Company's line subject to the gazetted regulations on the New Zealand Government Railways. 10. The Company shall be responsible for payment for all damages or losses to persons or property occurring on the Company's railway, unless such damage or loss is clearly traceable to the negligence or error of any of the Commissioners' servants, or to the defect of any of the Commissioners' stock or appliances. 11. The Commissioners shall cause the accounts for traffic over the Company's line to be compiled for each fonr weeks or thereabouts, in accordance with the practice on the New Zealand Government Railways, and shall make cash payment of charges due to the Company within four weeks after the close of each accounting period. 12. Demurrage for all wagons detained on the Company's line will be charged as per scale of charges in force on the New Zealand Government Railways, except for wagons for the WestportCardiff Coal Company, demurrage for which will be collected from the Westport-Cardiff Coal Company. 13. The company shall be responsible for all damage (ordinary wear and tear excepted) to the Commissioners' rolling-stock while on the Company's line, except for such rolling-stock as may be damaged while in the Westport-Cardiff Coal Company's siding, for which the Westport-Cardiff Coal Company will be held responsible. 14. This agreement shall come into force on the 11th June, 1894, and shall remain in force twelve months from that date. Signed on behalf of the Mokihinui Coal Company | J. R. Blair. , . (Limited). J Thomas Roskrdge. ( l- s>; The common seal of the New Zealand Railway ~\ James McKeebow. Commissioners was hereunto affixed this I T. Ronayne. (1.5.) twenty-sixth day of June, in the presence of ) John L. Scott.

No. 75. The Seceetaey, Westport-Cardiff Company, to the Railway Commissionebs. (Telegram.) 6th June, 1894. My Directors consider proposed rates on Mokihinui Company's line prohibitive, and have consequently decided to close mine. Will approach you with view to reconsideration. Haegeeaves, Secretary, Westport-Cardiff Coal Company, Christchurch. Chief Commissioner of Railways, Wellington.

No. 76. The Secretary, Westport-Cardiff Coal Company, to the Railway Commissioners. The Westport-Cardiff Coal Company (Limited), Christclrurch, Sib,— 7th June, 1894. I have the honour to inform you that your letter of the 4th instant to Mr. A. D. Bayfeild, the representative of this company in Wellington, and copy of his reply thereto, have been carefully considered by my Directors, and, in accordance with their instructions, I telegraphed to you as follows, namely : " My Directors consider proposed rates on Mokihinui Company's line prohibitive, and have consequently decided to close mine. Will approach you with view to reconsideration," which I now beg to confirm. My Directors note that you have come to an agreement with the Mokihinui Eailway Company, under which the Company's line will be worked by the Commissioners, and that the following rates will be charged for carriage of coal from my Company's mine to Mokihinui Station—namely, up to 15,000 tons per annum, Is. 4d. per ton ; all over 15,000 tons per annum, Is. Id. per ton; the minimum charge being as for 10,000 tons per annum, whether such quantity be carried or not, any deficiency in the proportionate quantity hauled at the end of each four-weekly accounting period to be paid by my Company, any overplus on the average for any preceding period being credited against such deficiency. In arriving at the above rates my Directors understand that a valuation of that portion of the Mokihinui Company's line to be used by my Company has been taken as a basis, the amount being £16,500, on which you propose to allow 7 per cent, interest. My Directors respectfully submit that it is wrong in principle to take either valuation or output as a basis for haulage charges, and object both to the principle as well as to the value, as this line is not worth anything approaching what it cost. They further submit that the imposition of con-

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ditions as to output is quite at variance with the existing system of traffic charges in force on the New Zealand Eailways, and should not be introduced as part of the question. My Directors contend that, in authorising the extension of the line from Ngakawau to Mokihinui, the Legislature intended that the Mokihinui Company's line should be worked in conjunction with the Government line, and that the traffic should be a through traffic, charged at through rates, in conformity with the rates prevailing on similar New Zealand Government Eailways. This view is further emphasized by an Order in Council issued on the 11th April, 1888, with special reference to the charges to be made on the Mokihinui Company's line on completion'of the Ngakawau Extension. The Order in Council referred to authorises the Mokihinui Company to charge Is. per ton for coal for a similar distance to that proposed to be used by my Company, together with terminal charges for loading and unloading. The proviso attached to the order, however, stipulates that, when the Ngakawau Extension is completed, " then these charges shall be reduced as regards all through traffic to rates not exceeding 20 per cent, over the ordinary rates, fares, and charges for haulage of all classes of goods and passengers, &c, prevailing on the New Zealand Government Eailways of similar character. When neither loading nor unloading is done by the Company, then no terminal charge to be made by the Company." Now, whatever may be the true interpretation of this proviso, it is quite clear that a reduction of the rates then authorised shall be made, whereas under the proposed tariff an increase of about 4d. per ton, or 33|- per cent, advance, is made on those rates for haulage of coal. As an example of the charges referred to, and made on railways of similar character, I would draw your attention to the rates for coal haulage on the Waimangaroa branch line. Between the Junction and Conn's Creek Id. per ton is charged, the distance being 1 mile 25 chains; between the Junction and Wellington Mine, 2d. per ton, the distance being 1 mile 3 chains, Id., I understand, being refunded to the Westport Coal Company, the Government finding labour and rollingstock, and the Company finding material for repairs. This line is better constructed in every respect, and more costly, than the Mokihinui Company's line. Then, again, in regard to passengertraffic,, a through charge is made on this line, the increase over ordinary fares being only 2d. for single and 3d. for return fares. My Directors submit that a through rate should be fixed from my Company's bins to Westport, including reasonable charges, based on those in force on the Waimangaroa line, and not on any valuation or supposed output. I am therefore directed to respectfully request that you will be good enough to reconsider the question of rates on the lines indicated herein, in order that my Company may be placed on an equitable footing and enabled to compete with other coal companies, especially in view of the certainty of a reduction in the price of coal produced by this and other Westport mines. Should you be unable to comply with this request, my Directors have no alternative save an appeal to the Governor, under clause 4 of " The Westland and Nelson Coalfields Administration Act, 1892." This Company's coal-bins are now full of coal ready for shipment, and my Directors anticipated placing it on the market at once, in order to take advantage of the winter season; but in the meantime, as the acceptance of the proposed rates would place my Company at a serious disadvantage by the payment of about double the amount of haulage paid by the Westport Coal Company, and would involve a probable loss on the production of our coal, my Directors have been reluctantly compelled to close down the mine, discharge the men, and discontinue all expenditure. As you have advised Mr. Bayfeild that it will be about a fortnight before you could deal with the question of reconsideration, and the delay is becoming serious, my Directors have thought the matter of sufficient importance to forward a copy of this letter to the Hon. the Premier. I have, &c, H. E. Haegbeaves, Secretary. The Chief Commissioner, New Zealand Eailways, Wellington.

No. 77. The Eailway Commissionebs to A. D. Bayfeild, Esq. Sib,— 12th June, 1894. Eeferring to your interview with the Chief Commissioner on the 9th instant, I have the honour to inform you that the Directors of the Mokihinui Company have intimated to the Commissioners that they have no objection to allow the settlement of accounts between the Commissioners and themselves to remain in abeyance pending your Company's appeal to the Government with respect to the rate recently fixed for haulage of coal from the Cardiff Company's Mine, provided that your Company is willing meanwhile to pay the rates so fixed under the agreement referred to. All arrangements have been made for working any traffic which may offer. I have, &c, E. G. Pilches, Secretary. A. D. Bayfeild, Esq., Westport-Cardiff Coal Company, Wellington.

No. 78. The Acting Seceetaey, Mokihinui Coal Company, to the Bail way Commissionees. Sie, — The Mokihinui Coal Company (Limited), Wellington, 12th June, 1894. Mr. Bayfeild, of the Cardiff Company, has requested my Directors to allow the question of haulage-rate to remain in abeyance pending the appeal they are making to the Governor.

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Whilst my directors do not in any way wish to interfere with the agreement entered into between the Commissioners and the Mokihinui Company, providing the Cardiff Company pay to the Commissioners the haulage-rate as per the agreement made between the Commissioners and my Directors, they have no objection to allow the settlement of accounts between the Commissioners and the Mokihinui Company to remain in abeyance for a reasonable time pending the result of the appeal. I have, &c, W. A. Tiddy, The Secretary, New Zealand Eailway Commissioners, Acting Secretary. Government Buildings.

No. 79. The Seceetaby, Westport-Cardiff Coal Company, to the Bailway Commissioners. The Westport-Cardiff Coal Company (Limited), Sik, — . Christchurch, 13th June, 1894. In continuation of my letter to you of the 7th inst., my Directors desire me to place before vou the following additional points against fixing Is. 4d. and Is. 3d. per ton respectively as the rates to be charged to my Company for haulage of coal over portion of the Mokihinui Company's line :— 1. That the extension of the line from Ngakawau to Mokihinui was constructed by the Westport Harbour Board out of its own moneys at a cost of close on £36,000, and is so far as much a private railway as the Mokihinui Company's railway. 2. The rate at present fixed for carrying coal on the Ngakawau section—about eight miles—is fd. per ton per mile, equal to 6d. per ton for eight miles ; whereas my Company is asked to pay Bd. per ton per mile for running the same coal less than two miles over the Mokihinui Company's line, or Is. 4d. per ton. 3v If it is considered fair and reasonable to charge fd. per mile, or 6d. per ton, for carrying coal eight miles over a line costing £36,000, it is manifestly inconsistent to impose a charge of Is. 4d. per ton for carrying the same coal less than two miles over a section of line worth less than one-fourth of the above-named sum. 4. If the haulage of my Company's coal over less than two miles of the Mokihinui Company's line is fixed as proposed—at Is. 4d. and Is. 3d. per ton, Is. Id. and Is. respectively to be paid to that company —the result will be that, on my Company's compulsory output of 50,000 tons for the fifth year and from that time forward, the Mokihinui Company will receive a minimum sum of over £2,500 per annum. In addition to this, they will receive at least a like sum for carriage of their own coal, besides a share of the earnings in respect of ordinary goods and passenger traffic up and down their line, not to mention the profit on coal which may hereafter be produced by other companies in that district. 5. The effect of this must be to immediately quadruple the present capital value of the Mokihinui Company's railway, and in any negotiations which the Government may hereafter open for the purchase of that line they will have to face this fact, as it is evident that a large net profit must result on the imposition of the rates and charges in question. 6. While this would be a very good thing for the Mokihinui Company, it would be a very evil one for the public purse and the coal trade, and this my Directors venture to think was not intended by the Legislature, and possibly has not been considered by either the Commissioners or the Government.. In this connection it must be noted that the Mokihinui Company have no rights as against my Company or its coal, except as they may arise from the use of their section or rolling-stock; neither can it be said that they were induced to construct their section of the line by any promise or expectation of traffic from my Company. 7. On the contrary, they constructed their line for their own purpose—viz., to enable them to ship their own coal at the Port of Mokihinui, a purpose which has entirely failed, and, but for the construction of the link-line from Ngakawau, the Mokihinui Company's section would have been practically valueless, whereas the traffic which the construction of the link-line will now bring to the Mokihinui Company will be all found money. 8. The capital of my Company was subscribed, and the Company took up its lease, and has completed its works, and undertaken obligations involving liabilities amounting to upwards of £22,000 in confident reliance on the promise of the Government that it would be placed on equitable terms with any other coal company, and that the ownership of a private line, such as the Mokihinui Company's, should not place it at a disadvantage as regards haulage, and that the rate for haulage should be a through rate from my Company's bins to Westport, according to the present system prevailing on the Westport Section, with a possible increase of 20 per cent, on the proportion of the through rate in respect of the section of the Mokihinui Company's line to be used by my Company. 9. Moreover, with the Government Gazette of the 12th April, 1888, before them, the promoters and directors considered, and were entitled so to do, that it was impossible that my Company could be placed on worse conditions with regard to haulage over that portion of the Mokihinui Company's line to be used by my Company, than it would be if such line belonged to the Government. 10. It is now sought to put my Company under a tariff which is Is. 2-Jd. per ton worse than that so promised, and indicated in the said Gazette. 11. That my Directors would never have taken up their lease, nor incurred the obligations before mentioned, could they have thought that an attempt would be made to impose such a prohibitive haulage-rate on their coal as that now proposed, or anything approximating thereto.

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12. My Directors respectfully submit that wherever private capital is invested in opening up the natural products of the colony, and thereby making provision for the constant employment of labour, they have a right to expect that the Government will do all fairly in their power to foster and encourage such enterprise, and remove such difficulties as those now under consideration. I beg to inform you that I am sending a copy of this letter to the Hon. the Premier. I have, &c, H. E. Hargreaves, The Chief Commissioner, New Zealand Railways, Wellington. Secretary.

No. 80. The Secretary, Westport-Cardiff Coal Company, to the Railway Commissioners. The Westport-Cardiff Coal Company (Limited), Sir,— Christchuch, 13th June, 1894. Your letter of 12th instant, addressed to Mr. A. D. Bayfeild, has been forwarded to me, and in reply I beg to state that no coal will be forwarded over the Mokihinui Company's line until either the proposed rates are revised or determined on appeal to the Governor. I enclose copy of a letter sent in reply to the Mokihinui Coal Company on this matter. I have, &c, The Secretary, New Zealand Government Railways, H, E. Hargreaves, Wellington. Secretary.

Enclosure in No. 80. The Secretary, Westport-Cardiff Coal Company, to the Secretary, Mokihinui Coal Company. The Westport-Cardiff Coal Company (Limited), Dear Sir, — Christchurch, 13th June, 1894. Mr. A. D. Bayfeild has forwarded to me your letter of the 12th instant addressed to him, by which he appears to have asked " for a reconsideration of my Directors' decision relative to the haulage-rate of your Company's coal pending an appeal to the Governor " ; and to " allow the settlemeat of accounts between the Commissioners and the Mokihinui Company to remain in abeyance for a reasonable time, pending the result of your appeal." I am directed to state, in reply, that Mr. Bayfeild has quite misunderstood his position, as the whole question is now being dealt with from this office. Whilst thanking your Directors for their offer, I beg to inform you that my Directors do not intend to send any coal over your line until the haulage-rates have been revised by the Commissioners or determined on appeal to the Governor. Yours, &c, The Secretary, Mokihinui Coal Company (Limited), H. E. Hargreaves, Wellington. Secretary.

No. 81. The Secretary, Westport-Cardiff Coal Company, to the Railway Commissioners. (Telegram.) Wellington, 16th June, 1894. As there is prospect of delay in reconsideration, have Commissioners any objection to our appealing to Governor at once ? Hargreaves, Secretary, Westport-Cardiff Coal Company, Secretary, New Zealand Railways, Wellington. Christchurch.

No. 82. The Railway Commissioners to the Secretary, Westport-Cardiff Coal Company. (Telegram.) 19th June, 1894. Matter of appeal is outside the jurisdiction of the Commissioners. They have no remarks to offer as to the course you may desire to adopt. Their agreement with the Mokihinui Company is now in force. E. G. Pilcher, Secretary. Mr. Hargreaves, Secretary, Westport-Cardiff Coal Company, Christchurch.

No. 83. The Hon. the Minister for Public Works to the Bailway Commissioners. Public Works Department, Wellington, 20th June, 1894. Re Bates for Haulage of Goal over Mokihimd Coal Company's Hallway. I have the honour to forward to you herewith copies of two letters recently received from the Westport-Cardiff Coal Company (Limited) on the subject of the rate fixed by the Commissioners for haulage of coal over the portion of the Mokihinui Coal Company's railway which coal from the Cardiff Company's mines would require to traverse.

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If the Cardiff Company is correct in stating that a rate of Is. 4d. per ton has been fixed for haulage over less than two miles of the Mokihinui Company's railway, and that they are bound to an output of not less than 10,000 tons per annum, I certainly think that the Company has good ground for complaint. In determining to invest the Commissioners with running-powers over this railway, the Government hoped that a through rate from the mines of the Cardiff and Mokihinui Companies respectively to Westport would have been gazetted, based on the ordinary rates for the carriage of coal applicable to other railways in the colony. If this had been done, the extra rate to be charged to the Cardiff Company for haulage from their mine would have exceeded the rate from Mokihinui by only 2d. or 3d., probably, whereas the Company now finds it is handicapped by having to pay a rate of Is. 4d. This latter rate the Government understands is entirely prohibitive, and has resulted in the closing of the mine, and the throwing out of work of all the miners. The question being a very serious one for the coal industry of the Mokihinui district, I have to request that the Commissioners will kindly give the matter their immediate reconsideration, and advise me of the decision arrived at, with their reasons for arriving at the same. E. J. Seddon, Minister for Public Works.

Enclosure 1 in No. 83. The Secretary, Westport-Cardiff Coal Company, to the Hon. the Premier. The Westport-Cardiff Coal Company (Limited), Christchurch, Sir,— 7th June, 1894. I have the honour to hand you herewith copy of a letter addressed to the Chief Commissioner of Eailways (letter from the Secretary, Westport-Cardiff Coal Company, to the Eailway Commissioners, dated 7th June, 1894), in reference to the rates proposed to be levied for haulage of coal over portion of the Mokihinui Company's line to be used by my Company. My Directors desire me to state, if these or any other rates approaching them are determined upon, it will seriously affect their operations, and probably result in their inability to wouk the mine to a profit. At present they have found it necessary to close the mine, discharge the men, and discontinue further expenditure; whereas they expected to send coal into the market at once, the bins being full, and work for extending the output of the mine in course of execution. The mine and works are now thoroughly equipped, and upwards of £12,000 have been expended thereon up to the present time. My Directors are of opinion that the only solution of the question of rates will be for the Government or the Westport Harbour Board to acquire and work the Mokihinui Company's line. They venture to hope that this view of the matter will receive your earnest consideration and support, in order that it may be dealt with during the coming session of Parliament. I have, &c, H. E. Hargreaves, The Hon. the Premier, Wellington. Secretary.

Enclosure 2 in No. 83. The Secretary, Westport-Cardiff Coal Company, to the Hon. the Premier. The Westport-Cardiff Coal Company (Limited), Christchurch, Ee Haulage-rates over Mokihinui Company's Baihvay. Sir,— 13th June, 1894. Eeferring to my letter of the 7th instant on this subject, I have the honour to hand you copy of a further letter addressed to the Chief Commissioner of Bailways (letter from the Secretary, Westport-Cardiff Coal Company, to the Eailway Commissioners, dated 13th June, 1894), adducing other important reasons against the imposition of the proposed rates for haulage of my Company's coal. My Directors beg that you will give the several points your usual careful consideration, in the hope that their suggestions may meet with your approval and support. In the meantime the mine is still closed, the men unemployed, and my Directors are unable to put coal in the market, although quite ready to do so. I have, &c, > H. E. Hargreaves, The Hon. the Premier, Wellington. Secretary.

No. 84. The Under-Seceetary, Public Works, to the Bailway Commissioners. Public Works Department, Wellington, 21st June, 1894. Ee Bates for Haulage of Coal over Mokihinui Goal Company's Baihvay. In continuation of the memorandum sent to you yesterday on the above subject, I have now the honour, by direction of the Minister for Public Works, to forward you the accompanying copy of a telegram received from the Chairman of the Westport Harbour Board in reference to the matter. li. J. H. Blow, The Eailway Commissioners, Wellington. Under-Secretary for Public Works.

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Enclosure in No. 84. Hon. Premier, Wellington. Westport, 20th June, 1894. The following resolution was passed at Board meeting yesterday : " That, considering the very large sum of the Board's funds invested in the railway extension, Ngakawau to Mokihinui, such work being in furtherance of the development of the Buller coalfields, this Board views with anxiety the apparent deadlock now existing owing to the excessive rate of haulage proposed to be charged by the Bailway Commissioners. That, understanding the Government have power to deal with the matter, telegraphic communication be sent urging the Government to speedy settlement, as its delay is seriously affecting the Board's interest and the general welfare of the district." Jas. Suisted, Chairman, Harbour Board.

No. 85. The Bailway Commissionees to the Hon. the Ministee for Public Wobks. 28th June, 1894. The Bailway Commissioners beg to acknowledge the receipt of your letter of the 20th instant on the subject of rates for haulage of coal over the Mokihinui Coal Company's railway, in which it is stated that " the Government hoped that a through rate from the mines of the Cardiff and Mokihinui Companies respectively to Westport would have been gazetted, based on the ordinary rates for the carriage of coal applicable to other railways in the colony, and that, if this had been done, the extra rate to be charged to the Cardiff Company for haulage from their mine would have exceeded the rate from Mokihinui by 2d. or 3d., probably, whereas the Company now finds it is handicapped by having to pay a rate of Is. 4d." In reply, the Commissioners have the honour to inform you that they have fixed 3d. a ton on the coal hauled from the Cardiff Company's sidings to Mokihinui. This charge also covers the haulage of empties to and the placing of them on the Company's siding. In addition to the charge for those services, the Commissioners had to determine what payment should be made, to the Mokihinui Coal Company for the use of its railway. The cost of construction of the two miles of railway to be used by the Cardiff Company, according to the Mokihinui Company's statement, is £16,500, with a probable addition of £500 for work requiring to be done at the Bluff at wharf. Probably the construction would now cost less, but at the time of construction the difficulties of access to the district no doubt increased the cost of dealing with a rugged country. Taking the cost at, say, £15,000, the annual interest at 7 per cent, (the rate the Company is paying on debentures) is £1,050. It seems but reasonable that the Cardiff Company should be held responsible for at least the half of this, or £525 per annum, while using the railway. On 10,000 tons, which is the minimum output prescribed in the lease for the first year of working, this would be a little over Is. a ton. The Mokihinui Coal Company's lease of their mine is for forty-two years from sth June, 1885. Their property in the railway is concurrent with the lease of the mine, so that it will be seen that an annual contribution to a sinking fund is necessary if the Company is to be recouped for its outlay on the line. Further, the Company has to provide all materials for the upkeep and repair of the line. Under these circumstances, it does not appear unreasonable that the Cardiff Company should pay Is. Id. per ton for the use of the line on the first 15,000 tons, and Is. per ton for all over that quantity, which they may send over the line during the twelve months of this agreement. As the output increases, in the succeeding years, in terms of the lease, the contribution per ton should be less; but that will be for consideration as each annual agreement is made. The principle of the companies specially interested in a railway contributing to any deficiency in the annual interest on cost of construction has been embodied by the Legislature in section 6 of "The Westport-Ngakawau Bailway Extension Act, 1890." Had the Cardiff Company been under the necessity of constructing the two miles of line at its own sole expense it would have been under a greater financial responsibility than under the conditions fixed by the Commissioners. In not having to sink capital in a branch railway, the Cardiff Company has not only the advantage of the Mokihinui Company, but of nearly every other coal company in the colony. The Westport Colliery Company, the Black Ball, the Nightcaps, the Hokonui Company, Kaitangata, Allendale, Shag Point, Fernhill, and others have each sunk thousands in branch railways to connect with the Government Bailways. James McKeeeow, The Hon. Minister for Public Works, Wellington. Chief Commissioner.

No. 86. The Seceetaey, Westport-Cardiff Coal Company, to the Hon. the Colonial Seceetaey. The Westport-Cardiff Coal Company (Limited), SiE,— Christchurch, 3rd July, 1894. In conformity with section 4 of " The Westland and Nelson Coalfields Administration Act Amendment Act, 1892," I have the honour to hand you an appeal, addressed to His Excellency the Governor, against the haulage and other rates proposed to be fixed by the New Zealand Bailway Commissioners on the Mokihinui Company's railway-line, and have the honour to request that you will be good enough to present the appeal to His Excellency for consideration as early as possible.

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I have further to express the hope that you will be able to support the views of my Company as set out in the appeal, and that you may see your way to advise His Excellency to fix a reasonable through-mileage rate for haulage of my Company's coal from its mine to Westport, similar to the rates now in force on the Westport Section and its branches; or, that steps be taken by the Government to purchase the Mokihinui Company's line, as the most effective mode of settling the question, and removing all present and future difficulties in the way of developing the Mokihinui coalfields. My Company has more than fulfilled its obligations in regard to expenditure, and, as you are aware, in doing so has relied upon the repeated assurances of the Government that a fair and reasonable charge would be fixed for its coal, based upon existing rates. Should you desire further information, or to discuss the question, before submitting the appeal to His Excellency, the Chairman, or other representative, of the Company will be glad to wait upon you. I have, &c, H. E. Hahgreaves, The Hon. the Colonial Secretary, Wellington. Secretary.

Enclosure in No. 86. To His Excellency the Governor of New Zealand. May it please your Excellency,— Christclxurch, 3rd July, 189*. Pursuant to section 4 of "The Westland and Nelson Coalfields Administration Act Amendment Act, 1892," we, the Westport-Cardiff Coal Company (Limited), appeal against the manner in which the Commissioners of the New Zealand Bailways have exercised their powers, and fixed the charges to be paid for the carriage of coal, goods, and passengers on and over that portion of the Mokihinui Coal Company's Railway which lies between the Government railway-line at Mokihinui and the railway-line constructed by us, and connected therewith, a distance of 1 mile and 22 chains; also over and along the raid railway-line so constructed by us from our coal-bins to the said Mokihinui Coal Company's line. The sketch-plan hereunto annexed shows the lengths and sections of the railway from Westport to Mokihinui with its branches, also the rates of haulage for coal now charged thereon respectively, and those proposed to be charged by the Commissioners on the Mokihinui Section. In a letter written to our then representative in Wellington, and dated 4th June, 1894, the Commissioners say " that the Railway Commissioners have come to an agreement with the Mokihinui Eailway Company, under which the Company's line will be worked by the Commissioners, and the following rates will be charged for the carriage of coal from the Cardiff Company's Mine to the Mokihinui Station, namely :Up to 15,000 tons per annum, Is. 4d. per ton; all over 15,000 tons per annum, Is. 3d. per ton. The minimum charge to your Company will bo as for 10,000 tons per annum, whether such quantity be carried or not, and any deficiency in. the proportionate quantity hauled at the end of each four-weekly accounting period must be paid by your Company. The ordinary settlement for freight due by your Company to be made by weekly ledger account under the usual conditions as set out on the attached form." Before proceeding to set forth the facts and arguments on which we rely in this appeal, we feel it a duty to ourselves and others who may be in like case to point out and complain that, although we are most deeply interested in the questions which have been decided by the Commissioners, no information has been given to us of the claims put forward by the Mokihinui Company, or the facts or arguments, if any, laid before the Commissioners in support thereof ; neither has any opportunity been accorded, us of considering or answering the case made for the said company, nor of discussing with the company or the Commissioners the principles which should guide the latter in coming to a determination, which, seeing that the functions of the Commissioners with regard to these matters are to a large extent of a judicial character, we conceive that we were and are entitled to. Even now we are so destitute of information as to the grounds on which the Commissioners have proceeded, that it is quite possible we may fail to reach and deal with them, and, unless the reasons and objections hereinafter set forth by us anticipate and reply to the grounds and conclusions arrived at by them, we venture to hope that your Excellency will direct that full particulars of all such matters be furnished to us at once, and an opportunity afforded to us of replying thereto. The absence of any reliable information on those points must constitute our apology for the length of this statement. "We desire to add also that the capital of the Westport-Cardiff Coal Company was subscribed, its lease taken up, its works completed, and obligations undertaken to the extent of over £22,000, in confident reliance on what we submit is the true interpretation of the Order in Council hereinafter mentioned, the reasonableness of the rates which are in force on the Government railway and the private railways connected with the Westport Section, and the principles which have been followed in settling those rates ; further, that, previously to incurring any responsibility in the way of expenditure, we endeavoured to get our haulage-rates definitely fixed beforehand, or ascertain whether we incurred any risk in connection therewith. We were assured by your Excellency's Government, and believed, that our haulage-rate would be an uniform mileage-rate from our mine to Westport, fixed according to the practice which has hitherto prevailed on the Westport Section, and that we need have no fear that either the Mokihinui or any other company would be allowed to block our coal, or place us at a disadvantage as regards haulage. If the least reason or warning had been given to us that any different treatment would be experienced by us as regards haulage than that which has hitherto been accorded to other coalowners on the Westport Section and its branches, or that anything approaching the prohibitive tariff now proposed by the Commissioners might be imposed on our coal, we should not have embarked in our undertaking, or asked any shareholder to invest his money therein. 11—I. 9.

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We understand that the Commissioners have agreed to haul the Mokihinui Company's coal over the entire length of their railway, a distance of four miles, at sd. per ton, or ljd. per ton per mile, the Commissioners finding rolling-stock, power, and labour, and keeping the line in repair, the Mokihinui Company finding materials for repairs only ; whilst they have fixed the rate to be paid by our Company for " way-leave " and haulage of our coal from the bins along our line, and thence over a short section of the Mokihinui Company's line to the Government railway at Mokihinui, a total distance of 1 mile and 40 chains, at Is. 4d. per ton (or Bd. per ton per mile); 3d. only of this sum is to be retained by the Commissioners in respect of haulage, whilst Is. Id. thereof is to go to the Mokihinui Company as toll for "way-leave" across the short length of 1 mile and 22 chains of their line over which our coal passes. We protest and appeal against the manner in which the Commissioners have exercised their said powers and fixed the said charges, on the following grounds, namely : — (a.) In fixing a haulage-rate on any of the coal lines of the colony, we submit that it is the duty of the Commissioners to foster and encourage the opening of mines and the development of the coal trade, and that they should use every legitimate means in their power to place all coal-owners as near as possible on an equal footing as regards facilities for putting their coal in the market. (b.) We also desire to point out that coal and coal-dross are now carried from Conn's Creek, the furthest point up the Waimangaroa Valley, to the ship's side at Westport, at 2s. 4d. per ton, whilst the through-rate on the Government line fr om theMokihinui Station to the ship's side is 3s. per ton. (c.) From this it will be seen that all Mokihinui coal is already heavily handicapped as against the Waimangaroa coal in the matter of railway freight, and that any extra charge which may be levied on our coal for haulage from our bins to the Government station at Mokihinui, will increase the already great difficulties which stand in the way of our obtaining a share of or extending the trade. From what we can learn, the reason which has induced the Commissioners to make such an enormous difference in favour of the Mokihinui Company as against ourselves, as regards the haulage of our respective coals over the Mokihinui Company's Bailway, is that the Mokihinui Company claim, and the Commissioners have conceded their right, to an initial haulage-rate in respect of " way-leave "to be given to our coal over their line corresponding in principle, although not in amount, to the initial haulage-rate of Is. lOd. per ton charged by the Commissioners for haulage of coal on the Westport Section of the Government railway for any distance of eight miles and under. If that is so, then we submit that the Commissioners have proceeded on an entirely wrong basis, and that the Mokihinui Company cannot be entitled to anything in the nature of an initial or special rate for "way-leave" over their line, neither should anything in the way of an initial rate be charged in respect of haulage over their line. But it ought to be fixed on a through mileagerate, on the same basis as it would be if the Mokihinui Section had been constructed by the Government as an extension of the Westport Section, and for the following reasons : — (a.) The object of imposing an initial rate for haulage on any railway is to cover the cost of receiving and delivering, loading and unloading, the maintenance of stations, sidings, and working staff, providing and keeping up rolling-stock, and the starting and stopping of trains, in respect to which a mileage-rate, if applied to short distances, would be out of all proportion to the work done. (b.) The Mokihinui Company will not be called upon to receive or deliver, load or unload our coal, neither will they be required to provide or maintain any station, siding, or working staff, or rolling-stock, nor will our freight trains start or stop on their line for any purpose whatever connected with our traffic, (c.) On the contrary, all the loading, shunting, and starting in connection with the haulage of our coal will be done by the Commissioners on our own railway ; the freight trains will then run right through from our bins or " lie-by," and, passing off our line, will continue their journey over a short length—l mile and 22 chains— of the Mokihinui Company's Bailway, and so on to the Government line at the Mokihinui Station. If the trains stop anywhere on the Mokihinui Company's line, it will be for purposes unconnected with our traffic.. (_.) It cannot be contended or allowed that, if other mines are opened to the south or west of our branch railway, that the owners must be compelled to pay one initial rate to our company for " way-leave " over our railway, a second initial rate to the Mokihinui Company' for " way-leave " over the short length of their line, and a third initial rate to the Government in respect of haulage over the public railway to Westport. The absurdity of such a contention is self-evident. (e.) An initial or special rate is incident to haulage, and no such rate can or ought to be allowed for " way-leave." Therefore, we submit, there can be only one initial or special rate levied for each through journey, no matter how many lines a train may pass over. That such rate belongs to the haulage authority, and that all "way-leave" must be calculated on a through mileage basis, and be provided out of the rate fixed for haulage, particularly where, as in this case, the whole of the lines are being worked by the same haulage authority—namely, the Commissioners. If, notwithstanding the arguments we have urged and may urge, your Excellency should still be of opinion that the Mokihinui Company is entitled to anything in the nature of an initial or special rate for " wayleave " on our coal over a portion of their line, then we submit that it ought to be provided out of the initial rate charged by the Commissioners in respect of the Government line. So far as we can learn this is the first occasion on which anything in the nature of an initial or special rate has been allowed to the owners of any private railway junctioned on to the West-

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port Section, and the first occasion in the history of railway management in New Zealand in which other than a proportion of a mileage-rate has been allowed or claimed for " way-leave," or a differential rate has been levied on one affreighter as against another. When, in 1878 or 1879, the Westport Coal Company completed their private line at a cost of about £8,000, and junccioned on to the Koranui Company's line at the Wellington Mine, Waimangaroa, the rate levied on their coal for haulage over the Koranui Company's line, a distance of 1 mile and 3 chains, was fixed at 3d. per ton, of which 2d. went to the Government for haulage, and Id. to the Koranui Company for " way-leave." The Westport Company subsequently purchased the Koranui Company's line for £14,000, and the through-rate from Conn's Creek to the Government railway-line at Waimangaroa, a distance of 1 mile 56 chains, is now reduced to Id. per ton for the entire distance, the Government contenting themselves with -J-d. for haulage, the other Jd. going to the Westport Coal Company for " wayleave," and it is open to any person or Company to send coal along that line at that rate. If 3d. per ton was considered a sufficient charge fifteen years ago for both haulage and " wayleave " over the Koranui Company's line, 1 mile 3 chains in length, and costing £14,000, and Id. per ton is considered a sufficient charge at the present time for both haulage and "way-leave " over the entire length of the Waimangaroa branch lines, a distance of 1 mile 56 chains, and costing £18,000, it is obvious that Id. per ton should be deemed sufficient to charge for both haulage and " wayleave " from our bins and over 1 mile 22 chains of the Mokihinui Company's line, even although their own value of £16,500 for the said section should be adopted. It may be objected, that the Westport Coal Company are putting out more coal than we are likely to do for some time; but in 1879, when their rate was fixed at 3d. per ton over the Koranui branch-line, their chen output was less than 200 tons per day. However, be that as it may, quantity cannot affect the question to be decided, which is not one of haulage only, but of " way-leave " also, and in the latter case the smaller our output the less will be the wear and tear on the Mokihinui Company's line. That the haulage-rate now sought to be levied on our coal is excessive and unreasonable is further, emphasized by an Order in Council published in the New Zealand Government Gazette, dated the 12th April, 1888, fixing the charges to be made by the Mokihinui Company for carriage of goods, minerals, and passengers over their line while it was a quite independent line and unconnected with the Government or any other railway. The said Order in Council authorises the Mokihinui Company to charge Is. per ton for the haulage of coal for a similar distance to that now proposed to be used by us, together with terminal charges for loading and unloading. But there is a proviso attached to the order which stipulates that when the Ngakaw.au extension is completed to Mokihinui (which has been done) " then these charges shall be reduced as regards all through-traffic to rates not exceeding 20 per cent, over the ordinary rates, fares, and charges for haulage of all classes of goods and passengers, &c, prevailing on New Zealand Government railways of similar character. When neither loading nor unloading is done by the Company then no terminal charge to be made by the Company." Under this Order the Mokihinui Company were entitled to charge Is. per ton for haulage of coal over about the same distance of line to be used by us, that Company providing rolling-stock, labour, maintenance, &c.; whereas the Commissioners propose to pay the Company Is. Id. per ton for "way-leave " only, charging 3d. per ton additional for haulage, the Commissioners finding all rolling-stock, &c, as before stated. Now, we submit that this proviso makes it quite clear that your Government intended that a considerable reduction of the haulage rates then authorised should be made on "through traffic" when the through line was completed, and that such reduction was to be based upon the ordinary rates, &c, prevailing on New Zealand Government Bail ways, and not the rates prevailing on any private line ; whereas under the proposed tariff, instead of a reduction, an increase of about 4d. per ton, or 33-J- per centum advance, is made on those rates for haulage of coal. It is also quite clear that the haulage rates authorised under the Order, and the proposed reductions under the proviso, were intended to cover the provision of rolling-stock and the working of the line by the Mokihinui Company, and not by the Commissioners. If, therefore, the Mokihinui Company were working their own line, and finding rolling-stock under the said Order, it is clear that they would have to submit to a reduction on their previous haulage rate of Is. per ton, and, further, that such reduction must bring the rates down to those prevailing on the New Zealand Government Eailways in respect of through traffic —namely, ton per mile, with 20 per cent, added. ■ As, however, the Mokihinui Company are not working the line, or finding rolling-stock, it becomes a question between the Commissioners, that Company, and ourselves, not of haulage, but of "way-leave" only, for which the Commissioners demand payment from us of Is. Id. per ton. If the aforesaid condition and proviso for reduction had been given effect to by the Commissioners in fixing the charges now appealed against, the rate for haulage and " way-leave " on coal from our bins along and over the Mokihinui Company's line to the Government railway at Mokihinui would have been reduced to 2d. per ton for the entire distance, whereas the Commissioners have increased it from Is. to Is. 4d. per ton. To put it in another form, the tariff now sought to be imposed on us by the Commissioners is Is. 2d. per ton worse for us than that provided for by the said Order in Council. If it is contended that, inasmuch as our traffic originates on our own line, that, therefore, the Order in Council does not provide for or apply to the case, and the tariff must be fixed without reference thereto, then we say, How can the Commissioners charge us Is. 4d. per ton for haulage and "way-leave" on the Mokihinui Company's line (allocating Is. Id. per ton to that company in

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respect of " way-leave ") when they charge only fd. per ton per mile in respect of both haulage and " way-leave " over the Government line from Mokihinui to Westporfc'? or, seeing that fifteen years ago they charged the Westport Coal Company only 3d. per ton for haulage and " way-leave " over the Koranui Company's line, and refunded Id. per ton to that company in respect of " way-leave " ? If, as has been suggested, the Commissioners based their decision on an estimated value of that section of the Mokihinui Company's railway over which it is proposed to run our coal, and the necessity of providing a profit to that company thereon, then we submit it was unfair to this company to accept the Mokihinui Company's valuation of the section, as it is said they did, at £16,500, without affording us an opportunity of proving, as we believe we could, that it could be built for less than £10,000. Still more unreasonable was it to proceed, as we are informed they did, on the assumption that, no matter how small our output, we must be compelled to pay such a sum per annum as would yield that company a profit on the alleged cost. We submit that this also was wrong in principle, and that it is too late now to take either valuation or output as a basis for fixing haulage charges on any part of the Westport Section or its branches, seeing that it has already been determined by long practice that all haulage rates on that section and its feeders shall bo one initial rate of Is. lOd. per ton for 8 miles and under to the Government—as haulage authority—and the remaining mileage charged at fd. per ton per mile. It may be urged that the Mokihinui Company can reasonably claim such a rate as will insure them interest on their outlay. We maintain that such an argument is not entitled to any weight in determining this question, for the following reasons : — (1.) The Mokihinui Company's line was originally constructed without any legal authority, and to enable them to ship their coal at their own wharf on the Mokihinui Eivor— a purpose which has entirely failed of its object—and but for the construction of the link-line from Ngakawau tq Mokihinui this line would have remained as it was, utterly valueless. (2.) The construction of the said link-line at the public cost, the validation of their railway, the opening of this company's coal-mine, and the prospect of further developments in the same direction, have given the Mokihinui Company's line whatever value it now possesses. (3.) Moreover, it must be noted that the Mokihinui Company has no rights as against us or our coal, except as they may arise from the use of their section, neither can it be said that they were induced to construct their said line by any promise or expectation of traffic from us. (4.) The Mokihinui Company's railway w ras constructed along and over, and occupies to the exclusion of all others, the narrow and only available track round the Bluff. As your Excellency's Government are aware, it was constructed along a public road, and is the key to the Mokihinui Valley. There can be no doubt that if the construction of the Ngakawau-Mokihinui Section had been authorised or in contemplation, and proper legal authority had been sought for the construction of this line before it was put in hand, that company would have been put under very stringent conditions as to the charges to be levied on the coal of other companies coming over the said line. (5.) The Mokihinui Company will derive a considerable revenue from the carriage of goods and passengers, which revenue has already been, and will further be, largely augmented by the influx of population owing to the enterprise of our company. (6.) These facts we submit are weighty reasons why the Mokihinui Company should be compelled to submit to and content themselves with a " way-leave " contribution out of a through haulage rate of fd. per ton per mile, which is the tariff now in force on the Westport Section and its branches, and one which will afford some encouragement to the coal-mining industry in the Mokihinui Valley. Even in the case of the New Zealand Midland Railway Company, whose line was authorised by Parliament, and constructed under exceptional conditions, the charge made to the "Black Ball Coal Company" is only 1-ld. per mile for haulage of their coal a distance of eight miles, the company supplying the haulage-power and the whole work of maintenance. The extension of the line from Ngakaw,au to Mokihinui was constructed by the Westport Harbour Board out of its own moneys at a cost of close upon £36,000, and that section is, so far, as much a private railway, and as much entitled to an initial or special rate in respect of " wayleave," as the Mokihinui Company's railway. The rate at present fixed for carrying coal over the said Ngakawau-Mokihinui Section, about eight miles, is fd. per ton per mile, equal to 6d. per ton for eight miles ; whereas the Commissioners propose to charge us Is. Id. per ton for " way-leave " only over 1 mile 22 chains of the Mokihinui Company's line. If it is fair and reasonable to charge fd. per ton per mile, or 6d. per ton for haulage and " wayleave," of the same coal eight miles over a public line costing £36,000, how can it be either reasonable or fair to impose a charge of Is. 4d. per ton for hauling and " way-leave " of the same coal less than two miles over a private line of the same description worth less than one-third that amount, particularly when, as in this case, the whole value of the private line has been created by the expenditure of the above-named £36,000 on the connecting line ? If the haulage of our coal over less than two miles of line at Mokihinui is fixed, as proposed, at Is. 4d. per ton, then, supposing we are able to carry on business and comply with the conditions of our lease, the result will be that on our compulsory output of 50,000 tons for the fifth year, and from that time forward, the Mokihinui Company will receive a minimum sum of over £2,560 per annum from us for " way-leave " alone, or equal to about 15-J per cent, on £16,500, the alleged capital value of less than one-third of that company's line. In addition to this, if they comply with their own output clauses the Mokihinui Company will receive a similar benefit from the carriage of their own coal, besides the larger share of the earnings

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in respect of ordinary goods- and passenger-traffic up and down the entire length of their line, and also large profit on the carriage of coal which may hereafter be produced by other companies in that district. The effect of this must be to increase enormously and most unjustifiably the capital value of this line at the cost of our company and of the public. If, as we believe, the public interest requires that these private lines should sooner or later be acquired for the colony, your Excellency's Government will do well to bear this in mind in settling the rates of haulage over such lines while they continue private property. If the Mokihinui Company is allowed a special rate for " way-leave " on cc.al which wo may send along its line the same treatment will have to be accorded to us in respect of other companies linking on to our railway, in which case it would be impossible to take up and work the seams to the south and west of our lease. Now, we do not ask for anything of the kind ;on the contrary, we are quite willing that our line and any extensions of it should be worked as one with the Government line, on a through rate, settled on the same basis and at the same rate per ton per mile as it would be if our lines were mere extensions of the Government railway. We also object to the imposition by the Commissioners of conditions as to our output (see letter, 4th June, 1894), as entirely at variance with the traffic conditions now in force on the New Zealand Eailways. The Commissioners have no right to say, as they do in effect, that we must either use a right of " way-leave " over the Mokihinui Company's line to the extent of 10,000 tons per annum or else pay that company a forfeit of Is. Id. per ton (£525) on that quantity. Why should we? What right of the Mokihinui Company do we invade by failing to use their line? Neither have the Commissioners any right to put us under a penalty as to quantity in respect of haulage, seeing that any person can send a single truck of coal down at the rate fixed. With regard to the rates fixed by the Commissioners to be charged over the said Mokihinui Company's line for ordinary goods and passengers, this is to us a matter of minor importance as compared with coal-haulage. But we submit that these also have been fixed on a wrong basis, are excessive in amount, and calculated to discourage any increase of traffic in that direction. These charges should be fixed at a through mileage rate, with one initial charge in favour of the Government as the haulage authority. The Mokihinui Company have hitherto enjoyed a monopoly of the coal output from Mokihinui Valley, and we assume that they have been able to do their own haulage at a cost approximate to the rate which the Commissioners have now agreed to do it for them—namely, sd. per ton (ljd. per ton per mile). How is it, then, that they have discharged their men and shut down the mine ? If, as would appear, they were unable to make a profit on their coal with such a low rate for haulage, can we be expected to survive the imposition of such a rate as Is. id. per ton, or Bd. per mile, for less than half the distance ? Our Company's mine is now in thorough working order, and equal to a large output; the bins are full, and we are only waiting to have a fair and reasonable haulage-rate fixed in order to send coal to market. In the face of the prohibitive rate fixed by the Commissioners for haulage and wayleave over the Mokihinui Company's section, we have had no alternative but to discharge our men, and discontinue operations, as such a rate leaves us no margin or chance of profit under existing conditions of the coal trade. Q?he present delay and stoppage will result in our losing the winter market, and limit our operations for some time to come. In the meantime we are under penal output clauses, a rental of £450 per annum, and heavy permanent charges. In conclusion, we submit that if no other reasonable solution of this difficulty can be found, the interests not only of our company, but also of the coal trade and of the colony, imperatively require that the Mokihinui Company's railway-line, or so much as lies between the Mokihinui Bailway Station and our branch line, should be acquired by the country and become part of the public railway system; and we respectfully urge your Excellency's Government to take such steps as may be necessary to bring this about immediately, during the present session of Parliament. By doing so your Excellency's Government will remove a serious obstacle to the development of the coal industry, increase the number of coal tenants of the Crown at Mokihinui, and enable present tenants to fulfil the onerous conditions of their leases. For the reasons stated, the appellants pray your Excellency to alter and amend the agreement entered into between the said Commissioners and the Mokihinui Company with regard to haulagerates to be charged to and from our coal-bins and the Government railway line, and to alter and amend the said agreement in respect of the rates to be charged for carriage of ordinary goods and passengers, and to fix the charges to be paid for such haulage of coal at a through-rate per ton per mile, calculated both as to our railway and the said Mokihinui Company's railway at the same rate as that now charged per ton per mile over the Government line from the Mokihinui Eailway-station to the ship's side at Westport, which we submit should be 2d. per ton, and to fix the through-rate to be charged for coal from our bins to Westport at 3s. 2d. per ton, and to fix the charges for the carriage of goods and passengers on the same basis. We have, &c, For the Westport-Cardiff Coal Company (Limited), W. H. Habgbeaves, Chairman. H. E. Haegbeaves, Secretary. P.S.—We find on reference to Westport, and since the foregoing was written, that the following coal was sent over the Westport Coal Company's line from the Wellington Mine, namely:— 1890 ... ... ... ... ... ... ... 4,187 tons. 1891 9,000 „ 1892 3,376 „ 16,563 tons.

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The charge for haulage from the mine to Westport made against the Wellington Company was 2s. 4|d. per ton, and that, out of this sum, l^d. per ton only was paid by the Commissioners to the Westport Coal Company for " way-leave " over 83 chains of their line.—W.H.H.— H.E.H.

No. 87. The Hon. the Minister for Public Woeks to the Eailway Commissioners. Public Works Department, Wellington, 14th July, 1894. Ee Bates for Carriage of Goal over Mokihinui Coal' Company's Bailway. I have the honour to acknowledge the receipt of the Commissioners' memorandum of the 28th ultimo on the above subject, and in reply to state that I am quite unable to agree with the contentions contained therein. The rate to be retained by the Commissioners for actual haulage (3d. per ton), though undoubtedly high for a distance of only a mile and a quarter, is not so much objected to, but the toll of Is. Id. per ton proposed to be collected on behalf of, and handed over to, the Mokihinui Coal Company for the use of the line seems to me to be excessive. The Commissioners state that the Company has informed them that the cost of the section of the railway between Mokihinui Wharf and the junction with the Cardiff Company's branch line was £16,500. There must, I think, be some mistake in these figures, as the Company's estimate of the cost of the entire railway (3 miles 65 chains in length), exclusive of rolling-stock—duly certified to by a competent engineer, and deposited with the Government immediately before the railway was constructed in terms of the Westland and Nelson Coalfields Administration Act — was only £16,547. It is probable therefore that the figures furnished to the Commissioners relate to the whole line, and not merely to the one mile and a quarter which the Cardiff Company requires to use. If this is not the case, then it is evident that the cost of the section was unduly high, and the Cardiff Company should certainly not be made to suffer for the maladministration of the Mokihinui Company. I also notice that the Commissioners consider it to be but reasonable that the Cardiff Company should be held responsible for at least half the interest on the cost of constructing this section of the line; but, considering that the Mokihinui Company's output, according to the terms of the several leases held by them, should amount this year Co 30,000 tons, while the output required by the Cardiff Company's lease for this year is only 10,000 tons, it seems to me that, if this basis of computing the charges is correct at all—which, to say the least of it, is open to question—the respective proportions in which the interest should be allocated against the two companies should be three-fourths against the Mokihinui Company and one-fourth against the Cardiff Company. But, as I have already stated, the principle of allowing the Mokihinui Company a return of 7 per cent, on the capital invested by them in the construction of their railway is one that is decidedly open to question, as it should be borne in mind that the present value of that railway is almost wholly due to the construction of the connecting-line between it and Westport. Without that connecting-line the Mokihinui Company's railway would have been almost valueless. I have also to remind the Commissioners that when the Mokihinui Coal Company undertook the construction of their railway they were fully aware of the obligations imposed upon them by statute to work it, and w Tere also aware that the maximum rates which could be charged thereon were those mentioned in the schedule to the Order in Council of 11th April, 1888; and they also knew that these rates were subject to reduction in the event of a line of railway from Westport being constructed to join their railway. That event has since happened, but, notwithstanding this, the Commissioners have agreed to pay the Company a rate in excess of the maximum rate which the Company was authorised to charge for traffic to and from Page's Creek (and the Cardiff Company's branch line, I understand, joins the Mokihinui Company's line within 15 chains of this point) when the line was worked independently, and through traffic with Westport was impossible. Not only so, but the Commissioners have undertaken to pay them this rate simply as a toll for the use of their railway, whereas the Company when working the line independently had to provide haulage, rolling-stock, and terminal facilities for the rate which they were authorised to charge. The rate proposed to be charged the Cardiff Company being so clearly excessive, and the terms proposed to be allowed the Mokihinui Company being more advantageous than they have any right under their concession to demand, I must again request the Commissioners to kindly reconsider the matter, and advise me of the decision which they may come to on the subject. E. J. Seddon, The Eailway Commissioners, Wellington. Minister for Public Works.

No. 88. The Bailway Commissionebs to the Secretary, Mokihinui Coal Company. Sir, — 19th July, 1894. With reference to your letter of the 23rd May, informing the Eailway Commissioners the cost (£16,513 ss. 9d.) of your Company's line from Mokihinui to Seddonville Crossing, I am directed by the Commissioners to ask whether the cost of your Company's wharf at Mokihinui is included in the amount mentioned ; and, if so, what is the amount so included. I have, &c, E. G. Pilchee, Secretary. The Secretary, Mokihinui Coal Company (Limited), Wellington.

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No. 89. The Acting-Seceetaey, Mokihinui Coal Company, to the Eailway Commissionees. Sie, — The Mohikinui Coal Company (Limited), Wellington, 19th July, 1894. In reply to your letter of to-day's date, I have to inform you that a due proportionate cost of the wharf from Mokihinui to Seddonville is included in the amount of £16,513 ss. 9d., for the reason that the wharf was absolutely necessary in order to land railway material, and without it or similar facilities to get the railway material at Mokihinui the railway could not have been constructed. The total amount expended on the wharf is £574 Bs. 3d., and the proportion charged to the railway is £276 18s. 3d. I have, &c, W. A. Tiddy, Acting-Se retary. The Secretary, New Zealand Eailway Commissioners, Government Buildings.

No. 90. Memobandum of Modifications proposed to Mr. Haegeeaves at Interview, 20th July, 1894, re Eailway Charges, Cardiff Company. Up to 10,000 tons, Is. 3d. a ton ; after that 9d., up to 15,000 tons; after that 6d., and nothing less. Charges only to be levied on actual output. In all cases 3d. a ton for haulage, and the balance to Mokihinui Company. J. McKeeeow. T. Eonayne. 20th July, 1894. John L. Scott.

No. 91. The Chaieman, Westport-Cardiff Coal Company, to the Eailway Commissionees. Gentlemen, —, 21st July, 1894. Beferring to the proposed modified rates for haulage over the Mokihinui Company's line, as submitted to me yesterday, I have carefully considered them, and regret to say that I am unable to accept them on behalf of my Company. I understand that the principle you have adopted in arriving at the original as well as the modified proposals is that, having valued the section of line to be used by us at £15,000, and agreed to allow the Mokihinui Company 7 per cent, interest on that sum—say, £1,050 —you have taken as a basis for raising the necessary revenue to meet that interest the compulsory-output clause of our lease for the present year of 10,000 tons, and propose to charge us at the rate of Is. per ton for " way-leave " only on that quantity, equal to £500 per annum, or about half the amount of interest. You appear, however, to have omitted to apply this principle to the Mokihinui Company, as coal-owners requiring the use of this section of line for traction of their own coal, by charging them with their proportion on 30,000 tons compulsory output for the present year, to say nothing of bringing into account the proportion of earnings from ordinary goods- and passenger-traffic. Then, again, I object entirely to your valuation, at £15,000, of that portion of the Mokihinui Company's line proposed to be used by us, as most excessive—£lo,ooo being, in the judgment of experts, a most liberal value, which, at 7 per cent., amounts to £700 per annum ; and I submit that, before apportioning even this latter sum, the earnings from goods and passengers must be brought into account, and the principle applied, as already stated, on the output of the respective Companies. With regard to haulage only to be paid to you, I again submit that this should in no case exceed the through mileage rate of fd. per ton per mile, as now in force on the Westport-Ngakawau Section. You will at once perceive the impossibility of the acceptance of even your modified proposals by my Company, as the initial charge of Is. 3d. per ton on the first 10,000 tons fixes us with a contribution of, at least, £500 per annum (in addition to haulage at 3d. per ton for less than two miles), or five-sevenths of the total amount of interest on our valuation of £10,000. I am most anxious that this question should be settled, if possible, without an appeal to either Government or Parliament: but I fear that the wide difference between us may preclude such settlement. I shall be glad to know whether you have any further proposals or modifications to submit before taking the necessary steps to bring the matter to an issue, as above stated; meantime, I shall be glad to wait upon you again should you think it necessary. I have, &c, W. H. Haegbeaves, Chairman, Westport-Cardiff Coal Company (Limited). The Eailway Commissioners, Wellington.

No. 92. The Eailway Commissionees to the Chairman, Westport-Cardiff Coal Company. Sib,— 23rd July, 1894. With reference to your letter of the 21st instant, in regard to the rates for haulage of your Company's coal over the Mokihinui Company's line, I have the honour, by direction of the Eailway Commissioners, to inform you that they regret your Company does not see its way to accept the modified terms proposed for the use by it of the Mokihinui Coal Company's private railway. I am instructed to add that the Commissioners have no further modification to propose. I have, &c, E. G. Pilchek, The Chairman, Westport-Cardiff Coal Company (Limited), Secretary. Wellington.

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No. 93. The Chaieman, Westport-Cardiff Coal Company, to the Eailway Commissioners. Gentlemen, — Westport-Cardiff Coal Company (Limited), 24th July, 1894. I am in receipt of your letter of yesterday's date, and note that you have no further proposals to make respecting the question of rates over the Mokihinui Company's line. In order, if possible, to arrive at something definite, I now beg to submit the following proposals for your consideration, viz.: — 1. As to charge for " way-leave " : I propose to value the section of line to be used by my Company at £10,000, we to pay half the amount of interest on that sum at the rate of 7-per cent. per annum, without bringing into account the proportion of earnings from goods and passenger traffic. For this sum or payment "way-leave" to be given to us by the Mokihinui Company for passage of our coal to the extent of 50,000 tons for the year, and for all over that quantity to pay the Mokihinui Company a halfpenny per ton. 2. With regard to " haulage " : The Commissioners to charge a through rate from our bins to Westport on the present tariff in force on the Westport Section —viz., Is. lOd. per ton for the first eight miles, and fd. per ton per mile for the remaining mileage. 3. The agreement to remain in force for twelve months, and thereafter to be subject to revision. I shall be glad to have your reply, if convenient, to-day, as I am anxious to leave Wellington as early as possible after settlement of this matter. I think it very unlikely that we shall turn out the quantity of coal I have named—probably not half—in which case our rate per ton would be doubled, as the amount of interest by way of rental would be fixed. I have, &c, W. H. Haegebaves, Chairman. P.S. —In the event of a strike, the payment of interest for " way-leave " to cease.—W. H. H. The Commissioners, New Zealand Eailways, Wellington.

■ ■ • No. 94. The Eailway Commissioners to the Chaieman, Westport-Cardiff Coal Company. SlE,— Wellington, 25th July, 1894. With reference to your letter of the 24th instant, in regard to the rates for haulage of your Company's coal over the Mokihinui Company's line, I have the honour, by direction of the Eailway Commissioners, to inform you that they have given careful consideration to the proposals as detailed in your letter above referred to, and regret that they do not see their way to entertain them. I have, &c, B. G. Pilchee, The Chairman, Westport-Cardiff Coal Company (Limited), Secretary. Wellington.

No. 95. The Chairman, Westport-Cardiff Coal Company, to the Eailway Commissioners. Westport-Cardiff Coal Company (Limited), Gentlemen,— Wellington, 27th July, 1894. I am in receipt of your letter of the 25th instant, and note that you do not see your way to entertain the proposals made to you in my letter of the 24th instant. I shall probably leave Wellington to-morrow, as I am hopeless of arriving at any arrangement with you which will enable my Company to compete favourably with other coal-owners in the face of the excessive rates you seek to impose upon our coal for "way-leave" and haulage. I therefore propose to leave matters until you have arrived at a better appreciation of what I conceive to be due to us, or the Government or the House can deal with the question on a fair and just principle. In the meantime* no traffic, I regret to say, can be initiated by us over either the Mokihinui Company's or the Government lines until we are placed under a fair and reasonable tariff. I have, &c, W. H. Habgeeaves, The Commissioners, New Zealand Eailways, Wellington. Chairman.

No. 96. The TJndeb-Seceetaey for Public Wobks to the Seceetaey, Westport-Cardiff Coal Company, Sie,— 6th August, 1894. In reply to your letter of 3rd ultimo, covering an appeal to His Excellency the Governor against"the amount of the rates proposed to be charged by the New Zealand Eailway Commissioners for the haulage of your Company's coal over a portion of the Mokihinui Coal Company's railway, I am directed by the Minister for Public Works to state that the matter has been very carefully considered in all its bearings, but the Government is advised that the Governor has no power now to fix such rates, as the effect of recent legislation has been to vest such power absolutely in the Eailway Commissioners. I have also to add that the Government has no power at present to purchase the Mokihinui Coal Company's railway. I have, &c, H. J. H. Blow The Secretary, Westport-Cardiff Coal Company Under-Secretary for Public Works. (Limited), Christohurch. Approximate Cost of Paper.—Preparation, not given ; printing (1,400 copies), £58 3s.

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