I.—B.

and the goods have to be dealt with in the same way at these three sheds as they had before at one shed, with this inconvenience : that'there are three sheds instead of one. That £3,000 spent by the Board did very little good, and the £1,500 spent by the Government did very little good. The goods are dealt with in identically the same way as they were when there was only one shed. It was proposed to Government that the shed should be made over to the Board, and I believe the department really contemplated at the time making the shed over to the Board, but it was not done. Since that date the Board has claimed that these sheds belong to them, because they spent money in altering them. We have invited the opinion of the Crown Law Officer on the subject. He holds that the department had no right to dispose of the property under the Act, and the fact of allowing the Board to cut up this shed did not alienate the property of the Crown. Then, sir, about this idea that the shed is built on a piece of ground which belongs to the Crown : that is, I think, an erroneous idea. If the Harbour Board Land Act is looked up it will be seen this Gladstone Shed is vested in the Crown. The pier is vested in the Board, but the right is reserved to the Crown, to lay down railway-lines, and do anything on this pier and on this wharf in connection with the effectual working of the lines; and the whole of these piers are occupied and were occupied by railway-lines. That is the theory of vesting the pier in the Board. It does not apply very well in practice. The Government might remove the sheds at any. time to any part of this pier. Well, the Board, as I say, claimed, on account of having spent this money, that it was entitled to call the sheds its own; but the opinion of the Crown Law Officers was that that could not be done. Then, I believe, the Board spent money on painting or repairing the sheds. I, as General Manager of Railways, objected to their doing that, but they seemed determined to do it, and the Minister seemed willing, and they did it; but the money they spent in repairing the sheds was not legally spent, and the money they spent in insuring the sheds was not legally spent on the part of the Board. I think they made a mistake, in insuring the sheds. Then, later on, as is shown by the correspondence, this Gladstone Shed expenditure by -the Board was made the subject of a proposal in connection with other sheds, and the Government said they would pay the Board the £3,300 spent on the Gladstone Sheds if the Board agreed to reduce the rent of the other shed to £500 a year. This is the first time, as far as I know, that any proposal was made that the Board should be refunded the £3,000 spent on the Gladstone Sheds. I never heard of any proposal to that effect before. Had I heard of it I should not have advised that the amount should be paid, because the results were not worth the outlay. It was quite a mistake ; the money should never have been spent in the way it was. The Railway Department objected to the payment of the rent, and so the matter stands. That is all I have to say about the Gladstone Shed. The Gladstone Shed has always been the property of the Crown : it has never been in the Board's hands, and has never been used by them at all; and they have been very fully informed about it, because in 1886 they wired in this way : " The Lyttelton Harbour Board propose to temporarily use one of their sheds on the Gladstone Pier for the storage of grain. The three sheds on that pier are almost empty, and I trust that no obstacle will be placed in the Board's way in doing this. Kindly reply at once." They assumed, as they have always done, that these Gladstone Sheds belonged to them. To that the Hon. Mr. Richardson replied, " Replying your telegram leasing, it appears you are under a misapprehension as to the proprietorship of the three sheds. I refer you to the Act of 1877 ; also to the correspondence subsequent, and to the Bill which your Chairman in 1881 endeavoured to pass, which provided for change of vesting. This Bill was opposed and dropped, and since then no further steps have been taken in the matter. If the Board requires more shed-room for storage Railway Department will be prepared immediately to give up possession of the large shed which it rents from the Board." 198. Mr. Williams, through the Chairman.] Will you read the reply to that telegram, Mr. Maxwell, by the Chairman of the Harbour Board?- —On the Ist May the Chairman of the Harbour Board replied as follows : "I have the honour to acknowledge receipt of your telegram of yesterday's date, and, in reply, to state that you are entirely misinformed in regard to the Gladstone Sheds. The original shed, of 500ft. long, was built by the General Government on the site referred to in clause 11 of 'The Lyttelton Harbour Board Land Act, 1877,' on the Officers' Point Breakwater. Subsequently, the Government agreed with the Harbour Board to hand the shed over on condition that the Board erected it on their own ground on the Gladstone Pier. The Board did so by adding to it, and re-erecting it in three sheds of 210ft. long each, the increased length being 160ft. The correspondence clearly shows that the shed and flooring-material were absolutely handed over to the Harbour Board, and the three sheds were re-erected by them upon their own ground, the Board at the time consenting to allow the Railway and Customs Departments to work the sheds for certain purposes. So far as the Bill of 1881 was concerned, it could only have referred to vesting the original site of the shed in the Harbour Board. No shed now stands on the site referred to. The three sheds now stand upon ground vested in the Board, and there was no need to again vest it in the Board, and therefore there can be no question whatever that they absolutely belong to the Board. The trade of the port has considerably altered since the working of these sheds by the railway was assented to by the Board, and just now there is no necessity for keeping all three sheds for the cargo of English ships, and hence my telegram of yesterday intimating that the Board proposed to temporarily use one of these sheds for grain-storage purposes. This appears to me to be a reasonable proposal, and one which could not embarrass the Railway Department, and would meet the exigency of the case so far as the Harbour Board's present requirements are concerned. I may mention incidentally that the Harbour Board spent the sum of £3,302 in erecting these three sheds on their own property. I may also add that Mr. Conyels, the Commissioner of Railways, wrote as follows to the Board on the 14th November, 1878 :' In its present position the shed can only be used as a railway-store. All material must be put into it and removed from it by railway-wagons ; and, consequently, it is of no more service on the wharf than if it stood in Christchurch or any other place remote from the ships. What appears to be required is a shed into which railway-wagons could discharge and thence be delivered direct to the ships, or ships discharge and thence to the wagons. This would immensely

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