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made, it being understood, however, that such royalties shall not be less than £5,000 per annum during the first seven years, £7,500 per annum during the second seven years, and £10,000 per annum during the remaining seven years, and that these royalties may be commuted for a fixed payment to be agreed on. The acquisition on these terms of a process for utilising New Zealand sand in the making of steel shall include the patent rights for New Zealand of our original process, by which, amongst other things, we have already proved : (1) According to the reports of Messrs. D. Kirkaldy and Sons and others, that tool-steel usually sold for about £50 per ton in bars can be made in a Siemens furnace from Swedish or ordinary haematite at the cost of ordinary open hearth furnace steel; and (2) that gun-steel equal to the British Government requirements can in the same way be produced by our process from ordinary haematite instead of Swedish iron, effecting a saving of about £4 per ton (see Woolwich Arsenal tests). I remain, <kc, Heebeet Mott, Secretary, Bsteve Steel Company (Limited). The Agent-General for New Zealand.

No. 3. Mbmoeandum for the Agent-Geneeal foe New Zealand, London. Premier's Office, Wellington, 19th December, 1899. I have to acknowledge the receipt of your memorandum, No. 2407, of the 17th October last, transmitting copies of further correspondence with the Esteve Steel Company with respect to experiments which the company propose to make with New Zealand ironsand, and the terms of the agreement by which, in case the experiments were successful, the Government would acquire the process in New Zealand. In reply, I have to state that the Government is unable to accept the terms of the company as stated in the correspondence, and I shall be obliged by your communicating this decision to the company. E. J. Seddon, The Agent-General for New Zealand, London. Premier.

Approximate Cost of Paper.—Preparation, not given; printing (1,200 copies), £117». 6a.

By Authority: John Mackay, Government Printer, Wellington.—l9oo.

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