13

I.—7a

Mr. Bloiv : In stating that the Government engineering only cost 5 per cent., I am taking the gross salaries paid, and the gross cost of actual construction work done, and allowing nothing for works surveyed but not actually carried out. Mr. Young told the committee that whenever he, or any of the other engineers were engaged in survey work, they were paid by the company and not by Mr. Wilson ; so that such portion of these officers salaries so paid by the company was really so much relief to Mr. Wilson. Mr. Dalston : That £15,000 which the company expended in survey was spent for the survey of the line which we are now asking the Government for assistance to make. Mr. Blow : Then, again, before the company started, the Government had spent thousands of pounds for surveys of this railway. From Belgrove to Stillwater was a flying survey, but the survey from Springfield to Brunnerton was a detailed survey. Hon. the Chairman : You say that was a detailed survey. Mr. Bittton: Is that the line that was adopted with the exception of this tunnel line ? Mr. Blow : Yes. The Government surveyed the line in detail, and the company has adhered to that line substantially; but, to suit themselves, and to save £400,000, the company has applied to the Government to substitute an Abt incline for the Summit Tunnel at Arthur's Pass. That alteration involved the abandonment of several miles of the surveyed line, but that alteration was made by the company to suit themselves, and to save a considerable sum of money. The company's prospectus, dated April, 1886, shows the names of the following gentlemen as engineers of the company—namely, John Carruthers, Eobert Wilson, and Mr. Napier Bell, chief resident engineer. The information supplied by the company as to the cost of engineering begins only towards the end of 1889. These three engineers were in the employment of the company in 1886. As to Mr. Napier Bell, he was wholly employed by them, and the whole of his charges as against engineering is in addition to the amount paid to Mr. Wilson. Mr. Bittton : Is that before 1888 ?—Yes. Hon. the Chairman; We have only a return from 11th November, 1889, to June, 1895. Mr. Button : Do you refer to moneys received before 1889 ? Mr. Bloiu : Yes. The engineers referred to were in the service of the company from 1886, but whether they were all exclusively employed by the company I cannot say. We cannot get exact information as to the amounts paid. The company seems to have dealt very liberally with their engineers—if we may take the later payments to Mr. Wilson as a criterion—so I expect the payment made to Messrs. Wilson and Bell for the period between April, 1886, and November, 1889, was substantial. As to what was paid to Mr. Carruthers we have no information, but, as his name appears first on the list, I suppose he was regarded as chief engineer, and paid accordingly. If we could get a return showing not only the total payments to Mr. Wilson for salary and commission from 1889 to 1895, but also the payments from 1886 to 1889, also the payments to Mr. Napier Bell for the same period; and all the payments to Mr. Carruthers; and also the fees drawn by Mr. Wilson's firm in London since 1889; and if we were to add to this the £15,000 spent in surveys, over and above the amounts paid for engineering, it requires no prophet to tell us that it would come to very little short of the £100,000 which I stated, when dealing with the debentureholders' petition, I believed the company had paid for engineering expenses. Mr. Button : That increases the percentage and the engineering costs. Mr. Blow : If we may assume that the cost is anything like £100,000, it is more than 13 per cent, on the cost of the works executed. Hon. the Chairman : You will find that the commission paid to Mr. Wilson was equal to about 9-J- per cent., as nearly as possible. Mr. Blow: Yes; but that is the payment to Mr. Wilson only. You will find that the total cost of engineering amounted to nearer 13 per cent, on the whole amount expended, or on what the company claims to have spent on the railway. It would amount to a greater percentage on what the Government consider the work ought to have cost, and the same work costs the Government 5 per cent., including everything. Hon. the Chairman : Then, you say that it should not have cost the Midland Company more? Mr. Blow : Yes. Now, with regard to the new proposals. I do not propose to go into them in detail, for the reason that they are practically the same as made in 1894, which were rejected by Parliament. In one respect, however, they are less favourable. Hon. the Chairman: Four per cent, was the debenture interest last year. Mr. Harris : It was 4 per cent, in 1894. Mr. Blow : I think not, sir; I think it was 3J per cent. Hon. the Chairman : What the Government proposed afterwards, in reply to the company, I think, was 3£ per cent. The company's proposal was 4 per cent. Mr. Blow : No, sir, it was 3f per cent.; the rate is set out in clause 12 of the draft contract submitted to the Government in Mr. Wilson's letter of 4th October, 1893—D.-3, of 1894. As I have already stated, in one respect these new proposals are less favourable than the already rejected ones. In 1894 the company proposed to complete the section of the line between Belgrove and Motupeka at a cost of about £30,000, and to hand it over to the colony as a gift; or, practically, as a bonus to the colony, to accept the other terms offered. That forms no part of the present proposal, and the reason is that the Government are constructing that section themselves. There is another important matter which no doubt the Committee will give full weight to: it is that in 1894 we did not know our legal position as well as we know it now. It was asserted by the company, and there were many people in New Zealand who believed it to be true, that the Government had done this company serious injury. Of course, the Government never held this view. But it is possible that many honourable members held that view, and this Bill was brought in to settle all disputes and grievances, supposing that the company really had had any. It was deemed advisable