45

I.—2b

Magniac, that the Bank were making a great effort to obtain half the Government account, is correct ? —He says " a portion of the account," I think: and I infer that the communication with Sir Julius Vogel may probably have led him to think so. There are other portions of his speech which will show that that is the clear inference. 833. I thought it related to instructions to you ? —No ; nothing has been done here. My action in this matter is entirely voluntary, without instructions or any communication from the Board.

Mr. Bridget.

18th Oct., 1875.

Tuesday, 19th Octobee, 1875. Mr. Macandeew, M.H.R., examined. 834. The Chairman] The Committee have been informed that you wish to make a statement in connection with the purchase of the Port Chalmers Railway ?—Observing in the printed evidence taken before the Committee, a statement by Mr. Bridges, to the effect that certain pressure had been brought to bear on the Colonial Government by the Bank of New Zealand, whereby the former were induced to acquire the Dunedin and Port Chalmers Railway, I desire, as one who was fully cognizant of the whole outs and ins of the transaction, to place on record my firm conviction that the statement of Mr. Bridges had not the slightest foundation in fact. The idea of purchasing the railway was first mooted by myself, and it was not until after much persuasion on my part, as Superintendent of Otago, that the Government was induced to treat for the purchase. After the Government had made up its mind on the matter, I was requested to undertake the negotiation, in conjunction with the Provincial Executive. This I declined to do, on the ground that I had some time before publicly committed myself to an opinion as to the prospective value of the railway, which probably I should not have done had I anticipated the possibility of so shortly after being employed in negotiating its purchase. The Hon. Mr. Bathgate was therefore deputed by his colleagues to treat with the Railway Company, and as they could not come to terms, the Government were disposed to allow the matter to drop. It was only after repeated and urgent representation from me, setting forth the absolute necessity in the public interest of acquiring the line, that the Government again took the matter up, through the Hon. E. Richardson, who visited Dunedin especially on the subject, and concluded the purchase on terms which, in my opinion, were by no means extravagant under the circumstances. It may be well to add that, under the agreement between the Railway Company and the General Government, it was optional with the former whether or not they should sell for five years; that is to say, they could not have been compelled to do so earlier, and it required almost as much persuasion on my part to induce them to sell as it did to induce the Colonial Gqvernment to purchase. I believe it has been to the Company a matter of regret ever since that they parted with the line at the price they did. In my opinion, the province is a gainer by the transaction of at least £150,000, a circumstance which amply justifies my action in the matter. Hon. Edwaed Richaedson, M.H.R., examined. 835. The Chairman] You have just heard the statement made by Mr. Macandrew. Have you any evidence to offer in respect to it ? —No doubt it is quite correct as far as it goes, but I have heard (I have not had time to study the other evidence given before the Committee) that it has been stated that pressure was brought to bear on Sir Julius Vogel, and on that ground, and for that reason, the Government paid more than they ought to have paid for the Port Chalmers Railway. Now, almost from the very day on which I joined the Government in 1872,1 was mixed up in that matter, and had a great deal more to do with it than Sir Julius Vogel had. 836. When was the purchase finally completed ?—ln the early part of April 1873. 837. Will you state what you know of your own knowledge of the matter ?—As soon as the session of 1872 was over, the Government had decided on purchasing the railway, in consequence of representations made to them by Mr. Macandrew. Mr. Bathgate, who was going down to Dunedin, was authorized by the Cabinet, in conjunction with the Provincial Executive, to endeavour to negotiate for the purchase of the line. A great deal of correspondence then took place, and eventually the negotiations fell through, in consequence of Mr. Bathgate having one idea as regards price, Mr. Macandrew another, and the Company another—totally different. The Company insisted on receiving £200,000 in the first instance. Soon afterwards, in making my usual journey round the colony, I went to Dunedin, and found that the first section of the Clutha line was approaching completiou. I saw that if this line was not immediately purchased, the Government would have to reclaim land for the second terminus, and put up double buildings, &c. I immediately urged the Cabinet to prosecute the negotiation, and to endeavour to complete the purchase. I gathered as much information as I could on the subject in Dunedin respecting the value of the line, taking all attendant circumstances (the concessions, &c.) into consideration. I had a tolerably good idea of what the line had cost the Company, and I put my own value on the concessions they had, and then I recommended to the Cabinet not to let the negotiation slip through if they could get the line for £175,000. A great deal of correspondence took place amongst the Ministers between December and March. I was in Auckland the beginning of March, and it was then suggested to me from Wellington that I should try and negotiate with Mr. Murdoch, who was very largely interested in this concern, on behalf of the Loan Agency Company. I could not remain to do this, and consequently I suggested that Sir Julius Vogel, who was shortly expected back from Australia, should remain there and take the matter in hand. Sir Julius Vogel did so, but he did not see his way clear to go as far as I considered it right to go as regarded the price. After negotiating for some time, he offered them £170,000, which they refused to take, and the negotiations were then broken off altogether. I immediately telegraphed to him that he was doing wrong, and that his action would put the Government to a very much larger expense, and that he ought to reopen the negotiation, so that the thing should not pass away. After some time he did reopen the negotiation, and he intimated to me that if I would consent to pay £1N(),000 he thought tho affair could be managed. I did not recommend that, but stood out for the £175,000. The Port Chalmers Wharf was not completed at the time, and the Company wanted to

Mr. Macandrew, M.H.B.

19th Oct., 1875.

Hon. _\

Bichardson.

19th Oct., 1875,