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estimates and schedules with Mr. Bell and myself, thought it would be more advantageous to the company to let the works to local contractors within the colony. 119 a. Are you aware that a large sum of money was paid to the contractors to abandon their contract ?—Yes ; it is stated here, £12,500 ; but I believe this includes plant and material taken over and worth, say, £2,500. 120. Mr. Blow.] Have you any idea what the saving to the company was by letting the contracts to contractors in the colony ?—Speaking approximately I should say there was 15 per cent, saved. 121. There would be some saving over the contract if it had in the first instance been let in the colony? —Certainly; but there were special circumstances. The company had to spend a certain sum at first in terms of contract, and I suppose one reason for the letting of contracts in London was to save time in getting the work in hand. They were obliged to make some prompt expenditure so as to be within the terms of the contract. No. 1 contract included a good deal of material— twenty-seven miles, rails and fastenings, &c. 122. In other words, the company, in order to gain expedition, did not study economy?— They were willing to make a sacrifice, and it was not done in view of this procedure. I think it rather showed that the company were willing to make a sacrifice so as to keep faith with the colony ; it showed the bona fides of their intention to get the work done in time. 123. The Committee is desirous of ascertaining whether the cost, as given by the company's accountant, is fair and reasonable—whether it could have been done for less money, hence my question as to whether the company studied expedition rather than economy ?—Considering the matter as to the direct cost only, the company would have saved money if they had let the work in the colony. 124. Did you ever look into the matter so as to form an opinion what the saving would have been had the contract been let in England instead of locally ? —There was a comparative statement made. I have not been able to find the document for present use, and consequently came here unprovided with it. 125. Did the contract comprise the supply of rails ?—Yes. 126: Do you know the prices ?—They were high ; speaking from recollection the price was £12 a ton, delivered on the works. 127. Do you know that Government has been purchasing them for £4 a ton ? —Yes ; but at the time the contract was let rails, steel rails were at the highest price, though it dropped shortly afterwards. 128. That is another evidence that the company did not study economy, for they sent them out a long time before they were wanted ?—They, no doubt, thought they might be wanted sooner, and expected that would permit a more rapid progress. 129. How long was it before the whole of them were used up?— Not until about 1891, I think, speaking from recollection. 130. So that they had been lying in the colony from the end of 1887, or towards the beginning of 1888 —three or four years?— Yes. 131. You referred to some plans of works having been approved by the Government? —Yes. 132- What you call approval was it not simply that the Engineer-in-Chief, looking at the matter from an engineering point of view, considered they were sufficiently substantial ?—I took it that he approved generally on behalf of the Government as a party concerned. I remember that Mr. Blackett, in his letter, added a number of recommendations as to details, which we took up and carried out according to his suggestions. 133. But these suggestions were not made for the purpose of saving money to the company?— I suppose that it was Mr. Blackett's.business to see that they came up to the provision in the clause in the contract respecting the work being equal to the Government standard at that time, and perhaps in view of the Government eventually acquiring the lines under certain stipulations. 134. But if the works were designed on a needlessly expensive basis he would not say anything as to that if they were adequate ?—I think he would ;if anything were superfluous he would have drawn attention to it. 135. Did he draw attention to anything of the kind ? —I do not think he did, or had reason to do so. 136. Yet you have told us that the character of the works was in advance of what was provided for in the original estimate ?—They were in advance of the requirement of the early estimate. 137. In advance of the standards which the Government were using at the time the estimates were made ?—Generally it was so. Since that time Government has also used more permanent structures of greater first cost than those contemplated in the early estimate. 138. The rolling-stock was superior?— Not specially so ; the ordinary stock is much the same. 139. Stations were put up in advance of the requirements. A third-class station might have sufficed where you put up a first-class structure, and where we would have been content to put up a third-class ? —We did not. 140. Do you mean to say that the company's stations on the Midland Railway are not much more expensive than the stations on Government lines carrying an equal traffic ?—No ; Stillwater Station is an ordinary Government standard fourth-class station, with additional accommodation added from time to time as actually required. 141. What about Reefton?—Reefton has only room for the people employed, for their furniture and other belongings ; it is a good station, but not beyond its requirements. It is, I think, smaller and cheaper than Government stations in similar positions. 142. You are not certain of your own knowledge that the contracts were let to the lowest tenderers ? —I saw the first tenders as they were received in Greymouth, but afterwards they went into Mr. Wilson at Christchurch, and I did not necessarily see them or compare the amounts. The