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6L But it is put into that in England ?—Yes; also it is provided for in case of the Government purchasing the line, for, in terms of the Midland Railway contract, a sum not exceeding £400,000 shall be added to cost of works on account of interest during construction. 65. So that if they had purchased the line under the contract they would have had to pay that interest ?—Yes. 66. Supposing the company had been constructing a line in England, it would be added as a matter of course ?—Yes, because it has to be paid out of capital until the railway earns money. 67. So that you think that the interest of the money expended on it should be added to the cost of construction ?—Yes; it is part of the cost to the company. 68. Mr. Blow was asked this question, I believe by Mr. Montgomery : " How much do you think it would fetch put up to auction as a going concern " [Vide answer 19, 27th July.] That appears to put the railway at £100,000. Is it a fair way of putting it ?—lt puts prospective value out of view altogether. If there were no prospective value possible it would be one possible mode of valuation. 69. In case of a railway not completed, is not the whole value prospective ?—lt depends upon its more or less remote chance of completion. 70. May we say that this mode of estimating value w r ould be entirely illusory ? —Yes ; although for rating purposes you would arrive at the value that way—prospective value being barred. 71. We are dealing with the value the country gets by taking it over?— Then the method of valuation by capitalised net revenue would only hold good if it were absolutely certain that there would never be any extension of the line or expansion of the traffic. 72. Is that a fair assumption ?—I do not think so. 73. If that could be assumed, the Midland Railway Company would not undertake it ?—Certainly not; if the profit was to be limited to £4,000 for all time, or an amount of net revenue bearing that proportion to the whole cost. 74. Mr. T. Mackenzie.] You are of opinion that there was value for the expenditure by the company?—l think that, on the whole, there was. Of course, if you went critically into details and particulars, you might have to make deductions from certain items now included; or, perhaps, on the other hand, allow certain additions. 75. But the basis of your estimate for the work was, as I understood you, upon reliable data. These were not the data the Government estimated on, but on the flying-survey ? —The Nelson survey was a very flimsy flying-survey. The Government estimate based on it could only have been made on a general estimate of so much per average mile. The East and West Coast line estimates were honestly and skilfully gone into by the Government Engineers of the day, but even then it was only a preliminary survey with five-chain pegging, and was not a complete detail survey. Any under estimates or omissions were due to the necessarily hurried class of survey used, and not to any want of care. 76. The Chairman.] Is it your opinion that a five-chain pegging is not enough for broken country ?—lt does not give sufficiently close detail; it was enough for the purposes of the time, but not for construction purposes or for absolute estimates. Our present surveys are pegged every chain, and fully detailed. 77.-Mr. T. Mackenzie.] Have you had any experience of the works?— Yes; I was formerly engineer—a contractor's engineer—for other railways; and, during the nine years and a half that I was chief assistant engineer for the company, was in charge of, and closely engaged in, its works and operations —was, in fact, the executive engineer. 78. You can, therefore, give an opinion of the cost and comparative prices?—l have made a comparative statement, but have not the information with me. 79. Mr. Millar.] Can you inform me how much was the sum-total of the contracts taken in London in connection with this line ?—Speaking from recollection, about £180,000. 80. Mr. Chapman.] That was the amount of the London contracts ? —Yes, I think so. 81. Does the £761,000 include the cost of everything? —Yes; it is taken from the accountant's ledger, in which everything is comprised. 82. Can you give me the actual prices at which the contracts were let ?—I could make a return if required. I did draw up a paper on the subject, but I have not got it with me. 83. The Chairman.] How long were you connected with the Midland Railway Company ?— From November, 1886, until the end of March of this year, when the thing ceased. 84. Ten years ?—Yes, ten years. 85. Were you paid by salary, or by commission?—By salary. 86. I think I heard you say that the work done had been done at a fair cost ?—Yes. 87. Are you taking into consideration the percentage, by way of commissions, paid to the engineer—Mr. Wilson? —That does not come within my knowledge. It was an arrangement between Mr. Wilson and the directors, I presume. 88. I will put it this way : Would you consider the work already done had cost a fair price if you had been informed that as much as 10 per cent, commission had been paid to the engineer ? —That would be a good commission. 89. Would not any commission added to ordinary emoluments add also to the cost ? —I can say that Mr. Wilson paid all the engineers' salaries and charges. He had no salary as engineer, and his commission covered his own remuneration and the expenses of his staff. 90. If that were so, it was a distinction without a difference, was it not ? By profession he was an engineer, and he was paid a high salary in his capacity as manager, besides a commission ? —Yes, that is so. 91. Has it been usual, according to your knowledge, to pay gentlemen of the engineering profession a commission besides salary ?—No, not within my knowlege ; but there might be such cases, of which I know nothing. He was not paid a salary as engineer.