D.—s

14

property of the company, the directors' powers having ceased on the order being made for windingup the company. The circumstances of this company are, however, exceptional, there being very few shareholders and virtually only one creditor—the contractor for the line—who cannot be considered as in any degree hostile. You are, of course, aware that the Public Trustee holds debentures of the company, and a mortgage of all its property to secure them. I have seen Mr. Brodrick, and also his solicitors (Messrs Sievewright, Stout, and Co.), in reference to the negotiations for the purchase of the company's railway and property. Mr. Brodrick does not wish to interfere with the negotiations which the Government are carrying on, and, in fact, would prefer that they should be continued until an understanding as to a price and terms of payment has been arrived at; but he stipulates that no agreement shall be entered into except with himself. He has promised to write to me on the subject, and on receipt of his letter I will forward it to you. I have, &c, C. Y. O'Connor, Esq., B. C. Haggitt. Under-Secretary, Public Works Department, Wellington.

12. The Ceown Solicitoe, Dunedin, to the Undeb-Seceetaey, Public Works Department. Ec Duntroon and Hakateramea Railway Company (Limited). Sic,— Dunedin, 24th February, 1885. Since writing you yesterday I have received from Messrs. Sievewright, Stout, and Co. a letter, of which I send you copy on the other side. It is not very well expressed, but the intention is that the negotiations should be carried on with the directors of the company, and a satisfactory conclusion as to price, &c, arrived at with them, which Mr. Brodrick will indorse if he is satisfied with it, which he will be if at all reasonable. I have, &c, C. Y. O'Connor, Esq., B. C. Haggitt. Under-Secretary, Public Works Department, Wellington.

Enclosure 1 in 12 of No. 7. Duntroon and Hakateramea Railway Company. Dear Sirs,— Dunedin, 24th February, 1885. Referring to the conversation of your Mr. B. C. Haggitt with the writer on Saturday last, we have seen the Liquidator of the above company, and are instructed to state that ho consents to Mr. McGregor treating with the Government for the sale of the railway on the distinct understanding that the price and terms are to be left entirely in his (the Liquidator's) discretion. This consent is given merely to facilitate a settlement of matters, and is not to be looked upon as in any way constituting Mr. McGregor the Liquidator's agent for the purpose of disposing of tho railway. Yours truly, Messrs. Haggitt Bros, and Bront, Solicitors. Sievwbioht, Stout, and Co.

13. The Undee-Seceetaey, Public Works Department, to the Crown Solicitoe, Dunedin. Ec Mr. Brodrick's position as Liquidator of Duntroon-Hakateramea Railway Company (Limited). Sic,— Public Works Department, 28th February, 1885. With reference to your letter of the 23rd February on the above subject, I am directed by the Minister for Public Works to thank you for the very lucid statement of the matter which you have sent, and also to forward to you enclosed herewith copies of Mr. Brodrick's letters of the Bth and 21st ultimo, showing that, although Mr. Brodrick is apparently now willing to allow us to negotiate directly with the company, he was of a different opinion at the date of his last letter above referred to. I have, &c, C. Y. O'Connoe, B. C. Haggitt, Esq., Crown Solicitor, Dunedin. Under-Secretary for Public Works. 14. Telegbam from the Hon. the Ministee for Public Woeks to the Official Liquidatoe of the Duntroon and Hakateramea Eailway Company. Ec Purchase of Duntroon and Hakateramea Railway. Wellington, 3rd March, 1885. Goveenment offered directors of company £58,000, in addition to one-half the total amount of rates which might be authorized to be raised up to the 31st March instant, and also so much (if any) of the Government contribution towards guaranteed interest up to same date as may then remain unpaid; but the company to have no further claim on account of rates or guaranteed interest of any description for any period subsequent to the 31st March aforesaid. But this offer has been declined. Will you accept the offer before the Government takes steps to sell the line under mortgage ? See letter "of the 2nd January, sent to Mr. McGregor. Edwabd Eichaedson, G. S. Brodrick, Esq., Liquidator, Minister for Public Works. Duntroon and Hakateramea Eailway Company (Limited), Dunedin.

15. John McGeegob, Esq., to the Hon. the Ministee for Public Wobks. Duntroon-Hakateramea Railway. — [Without prejudice.] Sib,— Wellington, 14th March, 1885. In pursuance of our interview this morning, I have the honour to inform you that the Duntroon-Hakateramea Eailway Company are prepared to sell the line for the sum of £68,847, with 5 per cent, added, from the 31st July, 1881—the date of opening the railway—to the 31st March, 1885, provided that the same rate of interest—namely, 5 per cent.—is charged on the £20,000 advanced to the company by the Public Trustee.