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The Hon. the Minister for Public Works to the Secretary, Waimea Plains Railway Company. Sib, — Christchurch, 3rd February, 1885. In reference to the correspondence which has recently taken place between your company and the Government, and the recent interview I had with your directors and yourself, I have now the honour to state that, after consultation with the General Manager, New Zealand Railways, on tho subject of a through communication over your line to the Lakes, I am prepared to arrange a service which I trust will meet the wishes of your company. The General Manager is now here, and proceeds to Dunodin to-morrow, and I purpose instructing him to call upon you and endeavour to arrange all details of the service ; and on that being done, it will bo immediately advertised. I understand that (1) the company desires a daily service from Elbow to Kingston, (2) that the payment formerly made for the engine-service run is considered insufficient, (3) that the company prefers to fix its own charges for traffic, (4) that the Government charges for stock and for the use of stations are objected to. -With reference to these points tho Government is willing (1) that there shall bo a daily service between Elbow and Kingston ; (2) that the Government will run this service with its own engine, provided that convenient times can be fixed for fitting in the services from Invercargill with the company's trains on the Waimea Plains Railway; (3) that the Government has never had any objection to the company fixing its own charges of every description, provided only that the classification of charges is so made as to introduce no difficulties in the interchange of goods traffic ; (4) by resuming the arrangement for interchange of goods traffic and through booking of goods the main objection to the charges for the uso of stations will disappear; but for locally-booked goods tho Government will bo unable to waive the very light charges which are made to cover the use of Government stations, staff, and stationery ; nor will it be able to take a different view to that of the previous Government in holding that the company should pay a proper remuneration for tho use of capital invested in stock, and for depreciation and maintenance, in the form of rental. Tho carriages and brake-vans which, under this arrangement, will run from Kingston in the morning will pass over the company's line to Gore, returning to Kingston in tho evening, and will serve the company's local business. For this stock no charge will bo made by the Government; but tho usual charges will bo made for locallyemployed carriages and vans used only on tho company's lino. So far as the wagon-stock is concerned, tho Government is unable to see its way at present to waive the charges arranged by its predecessors in office. I now wish to state that, in consenting to endeavour to arrange with you for a daily service as mentioned above, I have had to keep in view other interests beyond those of the population to tho northward of Gore, and to see that tho District of Invercargill is fairly served by tho railways. Tho time-table that the General Manager has submitted to me is drawn up with this object, and I have only now to add that tho Government consider a return to the service which existed up to 31st December, 1883—namely, three times a week from Goro to Kingston, and three times a week from Invorcargill to Kingston is amply sufficient for all present requirements of the travelling public ; but, sooner than continue tho inconvenience to the large section of tho population to tho north of Gore, tho Government, while protecting the interests of those in the District of Invercargill, will give way to what tho Government consider your unreasonable demands, provided you agree generally to tho above conditions. I have, &c, Edward Richardson, The Secretary, Waimoa Plains Railway Company, Dunedin. Minister for Public Works.

The Genebal Manages, New Zealand Railways, to the Secbetauy, Waimea Plains Railway Company. Sin,— Dunedin, 6th February, 1885. In pursuance of the letter of the Minister for Public Works of the 3rd inst., and as arranged at our personal interview yesterday, I now forward to you a rough draft of an amended arrangement for the interchange of traffic between the Waimea Railway Company's lino and the New Zealand Railways for consideration and discussion. The terms of arrangement will, after consideration.be subject to the final approval of the Minister for Public Works before final acceptance by the Government. In order to meet your wishes to have the main features of the arrangement ready for your board's perusal, I have been obliged to get the draft out somewhat hurriedly, and it will need careful perusal and consideration on several points. The provision regarding refunds of your charges being made, irrespective of your other debts to the Government, is one which must at present bo especially regarded as open to rejection by the Government, as I havo not had time to obtain a reply from Wellington as to the views of tho Treasury and Audit on this point. I shall be glad to discuss this arrangement with you at an early date. I have, <to. ( J. P. Maxwell, Tho Secretary, Waimoa Plains Railway Company, Dunedin. General Manager, New Zealand Railways. Enclosure.

Enclosure. Memobandum of Arrangements for Interchange of Traffic between tho Waimea Plains Railway and the New Zealand Eailways. 1. The company will work tho traffic on its own line, and will be entirely responsible for the safety of Government rolling-stock, passengers, and goods passing over the same ; the gazetted rates for the New Zealand Railways being oharged for passengers, returned empties, drays, carts, wagons, and for small lots of cattle, sheep, goats, and pigs. 2. Tho Government to supply rolling-stock of every kind, engines excepted—namely, carriages, brake-vans, trucks, and horse-boxes, &c. —charging the company for the uso of the same at the following rates, at per day or part thereof, viz.: First-class carriage, 10s. per day; composite or second-class carriage, 7s. 6d. per day ; brake, ss. per day: but the Government will supply two carriages and a brake-van free of charge for the purpose of conveying through passengers and luggage from the Government lines over the company's lines. No charges will be made for carriages used for through excursion trips. Should the Government at any timo supply an engine, the charge for the uso of the same will bo at the rate of £3 10s. per day or part thereof. All wagon-stock and horse-boxes will be charged Id. per mile run, loaded or unloaded. The Government will charge Cd. per ton on goods, Classes A, B, C, D ; 3d. per ton on Class E ; Id. per 100 superficial feet, timber ; 6d. per truck on Classes P, L, M ; 2d. per ton, Classes N, P; Id. per balo on wool; Id. on each parcel; and Id. on each local passenger and on all local bookings from or to oither junction-station to stations on tho company's lino, for use of the Government stations. 3. Passengers will be booked, via the company's line, between Kingston and Lumsden and the following stations, namely: Dunedin, Mosgiel, Milton, Balclutha, Clinton, Gore, and Mataura. In all other cases passengers must reboot at the junctions. 4. Parcels will be booked from all stations on the Government lines to all stations on the company's line, and vice versa. 5. Goods will be booked from all stations on tho Government linos to all stations on the company's lino, and vice versa. 6. The company's line will bo counted as thirty-seven miles for purpose of through traffic. 7. Division of charges will be made between the New Zealand Railways and the company. For passengers and returned empties, carts, drays, and small lots of cattle, sheep, goats, and pigs, proportionately to mileage. For goods and parcels such charges will bo levied and handed to the company as the company may from time to time direct. The charges made in the schedule hereto will be made until further arrangement. 8. When goods are booked through over the company's line between Government stations, the mileage on the Government lines will bo counted as continuous for purposes of charging rates. 9. Small lots of goods will be booked to the junction and ra-booked on the company's line.

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