1.—7

28

6. What do you say would be the true and proper estimate? How would that be arrived at in valuing the line ?—The Government estimate was in excess of a million. 7. We have had figures given to us for thirty-nine miles constructed ; the estimate for that was £355,000 ? —The cost to the company was about that. 8. The cost of the contract? —The cost to the company, taken from the company's ledger. 9. Mr Button.] From what point to what point ?—From Brunnerton to the present Reefton terminus. 10. The Chairman.] Brunnerton or Stillwater?—lt should be, I think, from Brunnerton to Reefton. 11. The thirty-nine miles from Brunnerton to Reefton, that cost about £355,000 ? —From Brunnerton to Reefton ? Yes. 12. Mr. Chapman.] Was that constructed by tender ? —Except one section, the " Nelson Creek " section. 13. That section was constructed by a London firm of contractors? —Yes; from Stillwater to Nelson Creek. 14. The remainder was constructed in the ordinary way by tender? — The contracts were advertised and tendered for. 15. And the plans submitted to the Government ?—The plans were submitted to the Government. I know the Nelson Creek and Ahaura sections were approved of by Mr. Blackett. 16. But you believe that the plans of all sections were approved?— Yes. 17. Were the contracts let according to the lowest tenders ?—So I believe. I did not actually see them all, but Mr. Wilson told me that the lowest tender was in all cases accepted. 18. Then there is another five miles and a-half. In what portion is it ? Is that at the other end of the line ? —Yes ; that is at the Nelson end of the line. 19. Under the contract of 1888, the Company had to spend £60,000 at that end ? —That is so. It appears in their books as £61,357, which is in excess somewhat, but £60,000 was agreed to by the Government as within actual cost and the land grant given for it. 20. A land grant was passed for it ?—Yes. ' 21. Now, as to the remainder of the Nelson line, the unconstructed portion —96 miles 48 chains—that was estimated by the Government Engineer-in-Chief (Mr. Hales), as given in Midland Railway Paper of 1894, 1.-8, page 16, at £995,000 in round numbers ? —Yes. 22. So that the total Government estimate from Reefton to Belgrove would be £995,000 estimated and £60,000 approved expenditure, making a total of £1,055,000. 23. The portion at Belgrove constructed by the company was let to the lowest tenderer ? — Yes. 24. The Springfield and Patterson Creek section—that is, at the other side of the ranges?— Yes, that is at the Christchurch end; £65,846 has been spent, of which £60,000 was obligatory under the Midland Railway Contract, and £5,846 was expended in excess of the obligation. 25. Has that been approved by Government ?—Yes ; to the extent of £60,000. 26. And land grants made in respect of it ?—Yes ; the balance is made up partly of company's expenses and partly of further work done at Patterson Creek end. 27. That £65,846 was in excess of the contract ?—There was some other work done in excess of the £60,000. 28. Then there is from Stillwater to Jackson's ?—That would be from Brunnerton to Jackson's, £278,411. 29. Some of that was done by London contractors?— Yes. 30. What section is that ?—Brunnerton to Stillwater, and Stillwater to Kaimata. 31. From Kaimata to Stony Creek ?—That was let by tender. 32. To the lowest tenderer ?—Yes. 33. And from Stony Creek to Jackson's?— They were all advertised and tendered for. 34. Were the plans approved by the Government to your knowledge?—l believe they were. The portion of the line extending to Stony Creek was constructed as originally surveyed and pegged by Government Engineer. 35. Before the Midland Railway contract was entered into ?—Yes; and a part of the line beyond Brunnerton was partly made by Government and handed over to the company, by whom it was completed. 36. That was on the line pegged out by the Government ? —Yes. 37. I want to ask you one question only about the London contractors ; The rate at which the London contractors did the work was higher than the colonial rate ?—Yes, it was rather higher. 38. The reason for that would be, possibly, the exigencies of tendering in London, or generally of employing contractors in London ?—I presume that was so. These contracts were let before the end of 1886 ; the first two being let before my connection with the company began. 39. I wish to call your attention to a statement made by Mr. Blow. I presume that this statement is a part of his case. It was this : That Mr. Napier Bell made an estimate of the cost of the line. Do you know anything about that estimate ?—To what estimate do you refer? 40. Perhaps lam wrong in calling it an " estimate." I will call it an " apportionment," that is the term taken from the document ? —That was an apportionment for land-grant purposes. 41. Have you that here ? I wish you to explain what that document is, and to what extent it can be called an "estimate" by Mr. Bell?—A land grant was given, based on what is called the "statutory estimate" of a million and a half for the East and West Coast line, and one million for the Nelson line. Presumably, the Government estimate for the Nelson line was £1,330,000, and for the East and West Coast line it was a million and a half. The company and the Government, through their engineers, Mr. Napier Bell and Mr. Blair, agreed to a certain allocation of the statutory estimate of cost to each particular section for land-grant purposes only. From the nature of the country, it could not be done by average mileage rate. To arrive at an