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line. Then, when you come to the company's line, they charge a short-distance rate. The shortdistance rate in this instance is Is. 9d. per ton, and the company add to this 20 per cent. If you look at classes P and Q you will see that Is. 9d., plus 20 per cent., comes to 2s. Id., and that is what the Mokihinui Company, if permitted, would charge the Cardiff Coal Company. Mr. Morrison: They could charge that for one mile. Mr. McKerrow : They could charge it for 1 ton for any part of a mile. Witness : We have proceeded with our works on the interpretation I have stated, and on the expectation and assurance of the Government that that was the intention. Notwithstanding what interpretation may be put on the proviso, the fact cannot be denied that a reduction was in contemplation, and not an increase. 152. Mr. Morrison.] I understand that the Commissioners have brought down that rate ?— My contention is that whatever interpretation is taken the question is one of reduction and not increase. Supposing an increase was intended, the increase would be on Is. 6d. The proviso distinctly says reduction, and not increase. " These charges shall be reduced as regards all through traffic to rates not exceeding 20 per cent.," &c. The increase cannot apply to all the line from Mokihinui to Westport; it can only apply to the through rate from any part of the Mokihinui Company's line. It has been said that we wished to take advantage of the Mokihinui Company. We want to do what is right and fair. But Ido say, in the presence of this Committee, that we as a company started with the full assurance that the rates as stated would be arranged by Government. 153. Mr. Guinness.] Will you state what is the amount you are prepared to pay for the wayleave for this service of line ?—I think it is due to the Committee and myself to state my reasons for not answering that question, and in maintaining the position I did yesterday. I did not come before this Committee in the belief that they expected me to make proposals with regard to dealing with this matter, because it is in the hands of the Committee to make what recommendations they think fit. With regard to the question put by Mr. Guinness ; in the first place, if the Committee wish it. the proposal that we think would be fair and right would be this : that an expert valuation be made of that portion of the Mokihinui Company's railway-line over which we require to pass our coal; that interest at the rate of 7 per cent, be allowed to the Mokihinui Company in such valuation-—as proposed by the Commissioners—my company to pay half the amount of such interest for way-leave or passage of our coal to the extent of 30,000 tons for one year, and for all over 30,000 tons a nominal charge, say, id. per ton, to be paid by my company. If this does not meet the rights of the Mokihinui Company to that point, then, we say, take into account the proportion of receipts from goods- and passenger-traffic, and let the Mokihinui Company take credit for that. It would be no inconsiderable sum, if the sinking fund is not included in the 7 per cent. The proportion of receipts from goods- and passenger-traffic ought to make a good return to reimburse the company for the cost of that portion of the line which we traverse. 154. Mr. Mackintosh.] What do you sum it up to be ?—I am suggesting coming to this by expert valuation. Supposing we valued it at £7,000 —and this would be well within its valuation— at 7 per cent., that would be £490. We would pay half of that; and in addition to that there would be the benefits derived from goods and passengers. For half that sum we would ask the Mokihinui Company to pass coal over for us to the extent of 30,000 tons; and after that, seeing that half their rights are met by this proposal, we say, "Do not continue this imposition for every further ton of coal we put out, but make a nominal charge of, say, -|d. per ton on all that we put out over 30,000 tons." This would be reasonable, and far better than the terms set out in the proviso to the Order in Council. 155. Mr. Earnshaiu.] Did I understand you to say that you were not prepared to meet the sinking fund?—lf the Mokihinui Company's rights are met by allowing 7 per cent.—which may include sinking fund—if they are also met by the proposal to pay half of such interest, that should satisfy them for the £7,000. They are then getting a better return than they could have got before. If it does not include the sinking fund, then they have the goods- and passenger-traffic, to say nothing of their own coal-traffic. They will find that in the course of time, as trade develops, they will get 10 per cent., or 15 per cent., or even more. Do not smother us with a heavy charge, for in any concern like this, if you hamper it at its commencement by heavy charges, you will kill the industry at its birth. By-and-by, if any injustice is done to the Mokihinui Company—which we are far from wishing—it can be remedied at the end of the agreement time, which cannot be longer than twelve months. 156. Mr. Guinness.] Is your company prepared to guarantee to pay at that rate on 30,000 tons per annum whether you carry it or not ?—Yes. 157. Mr. Morrison.] Why should you insist on getting the line revalued now; was it constructed in a very costly manner ? —Yes ; the rnoney was squandered. 158. I have heard it stated that the Cardiff Company were simply stripping or scratching the coal from the surface ? —There is no truth in it at all. We work our mines in the natural formation of the seams, and we would be very foolish to work in any other way. We have our seams opened out as far as possible, and have let daylight in through the tunnel at the other side of the Chasm Creek; and we are only waiting to make room for men. It is absolutely untrue to say that we are working our mine in the manner you indicate. Son. Mr. Hislop : There is a good deal as to the amount of money spent on the works. Ido not know whether that will have any effect with the Committee ; but, if it will, I would like Mr. Hargreaves to give more specific information. The Chairman : It is not probable that that will enter into the decision of the Committee, 159. Hon. Mr. Hislop.] The capital of the Cardiff Company is how much? —£30,000 nominal. 160. Does that include £10,000 for the land ?—No, £5,000.' 161. How many shares have been taken up ?—17,000. 162. What is the amount of capital that has been called up? —15s. per share.