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mentioned, and in reply to inform you that the same has been referred to the Commissioner of Eailways for the Middle Island for report, prior to consideration by the Government. I have, &c, John Knowles, J. Davidson, Esq., Dunedin. ' Under Secretary for Public Works.

No. 3. Mr. Conyers to the Hon. the Minister for Public Works. Memorandum for the Hon. the Minister for Public Works. Wagon Companies have been established for many years in the United Kingdom, and with successful results. I see no objection to the introduction of the system here, provided tho wagons are built according to Government pattern and under supervision of officers appointed by the Government, and that all the wagons so erected be maintained by the Company in thorough working order and to the satisfaction of the Government Inspector, provision being made for taking them over at a valuation at the expiration of twelve months' notice, should the Government deem it desirable. This would save the Government considerable outlay in the purchase of wagons. The rebate proposed by Mr. Davidson of one farthing per ton per mile seems to me a favourable one. I have, &c, AY. Covers, 4th June, 1878. Commissioner of Eailways, Middle Island. ■^H______________M_-_-_----------M____________MM-_-------_B

No. 4. The Under Secretary for Public AVorks to J. Davidson, Esq. Sir,— Public Works Office, Wellington, 11th June, 1878. I am directed by the Hon. the Minister for Public Works to acknowledge the receipt of your letter of the 2nd ultimo relative to the formation of a company for building and letting railway wagons. In reply, I am to state that the Minister, having inquired into the advantages which would accrue alike to the public and the Government by the formation of such a company as you suggest, and having satisfied himself thereon, is disposed to view your suggestion favourably. I have, &c, John Knowles, J. Davidson, Esq. Under Secretary for Public Works.

No. 5. Mr. James Davidson to the Hon. J. Macandrew. Sir,— Dunedin, 17th July, 1878. In reference to former correspondence re the establishment of a Railway AVagon Company, I now beg to state the concessions asked for by said Company from the Government, which, simply stated, are these : — That the Government should allow the use on their railways of goods wagons built by the Company and leased by mineral companies or others. These wagons to be exactly similar in pattern to those belonging to the Government, and to be subject to the approval of the Government Engineers, also subject to inspection. That the Government should allow the rebate of one farthing per ton per mile on the rates charged for the different classes of goods carried in Government wagons. The Government at present allow a rebate on goods carried in the trucks belonging to the Kaitangata Eailway and Coal Company, and this arrangement, in an extended form, is what the proposed Wagon Company would desire. The general objects of this company are shown in the draft prospectus, which I have the honor to enclose. Tho rebate could be credited to the Wagon Company or to those leasing their Wagons, as the Government might decide. Trusting that a favourable reply may be given to me, I have, &c, The Hon. J. Macandrew, James Davidson. Minister for Public AVorks, AVellington.

Enclosure in No. 5. Draft Prospectus of the "New Zealand Eailway AVagon Company (Limited)." Capital : £100,000, in 10,000 shares of £10 each, of which it is proposed to call up £5, viz. :— 20s. on application, 20s. on allotment, 20s. in four months, 20*. in six months, and 20s. in twelve months after allotment.

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