I.—7a

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17. Then, where will the money come from to construct the line? —We propose to form a company with a capital of £2,000,000, which will provide for the construction. 18. Upon getting a concession of £618,000? —Yes, that is it. 19. Dr. Newman.] What is the latest estimate of the cost of completing the line ? —£973,000 — a million in round numbers. 20. Without rolling-stock ?-—£973,000. 21. Hon. the Chairman.] I observe that the proposal made to the Government by the company is to accept debentures? —Yes. 22. But why 3-J-per-cent. debentures? Do you consider them fair value for 20s. in the pound in the company's estimate? And why should the interest be 3-J per cent., when the colony's 3-per-cent. stocks are now over par?—l do not know that there was any particular object in making it 3|- per cent; it was a reduction of -J per cent, on the percentage asked for in 1894. 23. To be sure of being on the right side, I presume ?—Yes. 24. You have referred to certain statements which you call misrepresentations. Ido not know whether I was clear in understanding you to blame the colony as to the land-values ?—No, I referred to persistent rumours in London. Ido not say whether these rumours came from Government officials or from other sources; as a matter of fact, I think they were to some extent owing to Government officials. 25. Were not the representatives of the company chiefly responsible for the representations made with reference to land-values in the company's prospectus calling for capital ? —Undoubtedly they were through the representations made to them by the representatives of the syndicate from the colony. But at the same time the interviews between the representatives of the company and the Agent-General were of such a nature that the company was led to believe that the statements made by those representatives were correct. 26. Is it not the fact that one of your principal representatives visited this colony before the company's original shareholders were asked to subscribe?— Yes; Mr. Hoare. 27. Not before the issue of the first share capital, I think ?—I cannot answer that question, but I think the company was formed before. 28. You-made reference to the present system upon which the Government was carrying on the extra work in the continuation of the construction of the railway—to wit, paying under the co-operative system. Is that system more expensive than the contract system previously adopted by the company in paying large percentages of commission on contracts as well as large salaries ?— Ido not know. That is outside the present position. The present position as between the Government and the company is one of trust. Therefore it is that the company has the right to see that certain things are done. 29. Was it not a position of trust as between the company's directors and its shareholders?— Yes, that may be, though not of the same nature as the colony's trust; but Ido not admit that enormous commissions have been paid. 30. Are you aware that somewhere about £70,000 were paid to Mr. Wilson by commissions and salary, apart from what he received in London ?—I believe that something like £57,000 was paid to him. 31. There was a sum of £12,000 given away for some other purposes ?—That was paid to McKeone and Bobinson. 32. Mr. Button.] With reference to the co-operative system : I presume you mean that, if the Government had called for tenders instead of doing the work upon the co-operative system, the beneficiaries would have a guarantee, or some guarantee, that the cheapest way of doing it had been adopted ?—A position of trust now exists ; not the position of contracting parties. In the case of contracting parties there is no right to compel accounts ; but as between the cestui que trust and his trustee there is such a right. The company has now the right to know whatever is done by the Government, and to see that it is done in terms of the contract. 33. Are you aware that £43,748 was paid as commission to Mr. Wilson?— Yes. 34. That another sum of £14,048 was paid, making nearly £58,000? That besides these sums he received commissions in London in connection with the company? —No. I have consulted Mr. Dalston, as Mr. Wilson's attorney, with regard to all these payments, and with his consent I am prepared to state, if necessary, the sums which Mr. Wilson had to pay so as to get tlris £58,000. 35. You spoke of the line north and south. I presume you alluded to the extension to Nelson ? —Yes. 36. Dr. Newman.] You have been talking of the position being now a trust. Does that imply that unless something is done the company will go into liquidation ?—Not if the company finds the money to pay its balance. 37. At the end of the year the Government was in the position to give three months' notice to the company to pay up the balance. They have given that notice ?—The company propose to pay that. 38. When ?—Before it is due. 39. How much is it ?—£4,500. 40. Will that keep their question alive?— Yes. 41. How long? —That is a question of law upon which I have not formed any conclusive opinion. Ido not think you can expect me to give my opinion. Mr. Dalston sworn and examined. 42. Hon. the Chairman.] You are now the general manager for the company in New Zealand? —Yes. 43. Are you an engineer?— No. 44. You are the attorney for the company, and in that capacity you signed this petition to the House ?—Yes.