17

D.—s

23. The Acting Undee-Seceetaey, Public Works Department, to the Official Liquidatoe, Duntroon and Hakateramea Railway Company. Re Duntroon-Hakateramea Railway. Sic,— Wellington, 4th April, 1885. I have the honour, by direction of the Minister for Public Works, to acknowledge the receipt of your letter of the 27th ultimo, and, in reply, to inform you that the necessary agreement will be prepared to give effect tp_the arrangements which have been entered into by the Government for the purchase of the railway. With regard to the last paragraph of your letter, in which you say, "it is understood that the Government is to allow the company the difference between 4 per cent, and the current rate of interest until the debentures are handed over and the purchase completed, I am further directed to- inform you that the Government do not see their way to accede to this variation of the agreement, particularly as the Public Trust Fund is the real creditor of the company, and it is not in their power to consent to any arrangement which would result in the diminution of the interest which was stipulated to be paid by the company for the loan advanced from that fund. I have, &c, Thomas Mackay, G. S. Brodrick, Esq., Official Liquidator, Acting Under-Secretary for Public Works. Duntroon and Hakateramea Railway Company, Dunedin.

24. John McGeegob and Other Shareholders, Duntroon and Hakateramea Railway Company, to the Hon. the Ministee for Public Woke. Duntroon and Hakateramea Bailiuay. Sib,— Dunedin, 31st March, 1885. We, the undersigned shareholders in the Duntroon and Hakateramea Eailway Company (Limited), beg respectfully to address you relative to certain negotiations which we understand are now going on between the Government and Mr. G. S. Brodrick (Official Liquidator) for the purchase of the Duntroon-Hakateramea Eailway. We have ascertained from Mr. Brodrick that Government submitted an offer to purchase the line for £61,100, with power to collect rates, and 2 per cent, guaranteed interest, to the extent of about £5,873, making a total of £66,973, to be received on the 31st March, 1885. It has already been shown by the company's official letter to you, dated the 19th January, 1885, that the actual cost of construction at the date of opening, without interest, amounts to £62,100 ; interest on capital during the time of construction, £6,747, and 7 per cent, interest from date of opening, guaranteed by District Railways Act, £14,191 : making a total of £83,038 on the 31st March, 1885, as against £66,973, the amount that would be realized from, the Government offer to Mr. Brodrick. With a view of clearing up complications brought about entirely by defective legislation in the District Railways Act, the shareholders authorized Mr. McGregor, while in Wellington, to submit an amended proposal to Government, dated the 14th instant, by which the company agreed to sell for net cost of line at date of opening, with 5 per cent, per annum added to the 31st March, 1885, waiving all rights to collect rates and Government guaranteed interest, and thereby sustaining a loss of 2 per cent, per annum for three years and eight months on £66,947, or equal to £5,052. We cannot believe that the Government of New Zealand, after taking into consideration the defective Acts of Parliament under which the company had to work, would knowingly be a party to a transaction that will, if carried out as at present proposed with Official Liquidator, force the shareholders to make a loss of over £16,000. We therefore respectfully submit that if Government, for reasons of their own, decline to purchase the Duntroon-Hakateramea Railway at the price and on the terms contained in Mr. McGregor's letter of the 14th instant, that Government will also refuse to purchase at the price offered and said to be accepted by Mr. Brodrick. The only other alternative that we can suggest to supplement the Government's offer as it now stands is that the back rates, amounting to £5,175, and 2 per cent, guarantee, £2,070, for the years 1882 and 1883 (twenty months), with 5 per cent, on cost of construction to date of opening, £4,819, should be made good to the company; because we contend that the shareholders should not be made to suffer such a heavy loss through flaws in District Railway Acts, which debarred the company from levying rates for twenty months after date of opening railway, and from capitalizing even a low rate of interest during the course of construction. We sincerely regret being forced into the position of hereby giving you formal notice that we protest against the purchase by the Government of the Duntroon-Hakateramea Railway from the Official Liquidator for the sum of £61,100, and, further, we give you notice that we intend to resist by every lawful means the completion of such sale if attempted to be carried out on the terms indicated by Mr. Brodrick. We have, &c, John McGeegob. John Meek. W. Fbasee. C. D. K. Waed. Thos. Meek. Waltee Gutheie. Hon. E. Richardson, Minister for Public Works, Wellington.

25. The Acting Undee-Secbetaby, -Public Works Department, to John McGbegob, Esq., and Others, Dunedin. Gentlemen, — Wellington, 30th April, 1885. I have the honour, by direction of the Minister for Public Works, to acknowledge the receipt of your letter of the 31st ultimo, which bears the Dunedin postmark of the 27th instant, 3-D. 5.