I.—4a

48

89. You said that I informed you and others that I was to be a director of the company, and would nominate the other directors ? —Yes, that is so. 90. You swear that in the face of this prospectus, which states, " The subscribers to the memorandum of association will act as directors until the statutory meeting of shareholders, which will be called immediately after the registration of the company " : you read that ?—Yes. 91. You knew that I remained in Auckland until after the formation of these companies?— No. 92. You know that your applications were sent down to Dunedin from Auckland ? I can prove that they were sent from Auckland ?—You took them with you to Dunedin. 93. You knew that I could not possibly be the subscriber to the memorandum of association, did you not ?—No, certainly not. 94. Seven were required, and how could I be more than one?— You could be one, of course. 95. But you know that the Act provides that seven members must sign the articles of association?— Yes. 96. And you knew that I could not be seven? —Of course. 97. And you knew that no people in Auckland could be subscribers to the articles of association —they must have been Dunedin people?— Yes; but the holder of one share could sign the articles of association. 98. Was not this the fact: when these companies were formed the Grey Biver dredge was expected to work the following month ?—Yes. 99. We talked this over, and, seeing the prosperity of dredging, thought that if the Grey Biver dredge was a success we would be going in for good things ?—Yes. 100. And that on the Grey Biver giving good returns there would be a rise in the market, and that we should be able to operate on our shares at a profit ?—That is what was expected—what you told me. 101. In the event of the Grey Biver giving good returns you would have made a profit on the shares ?—That is so. 102. Was it not stated that practically the whole of the expenditure in a dredging company was in the building of a dredge ? —That is so. 103. And that if the Grey Biver dredge proved the Grey Biver to be non-auriferous it would not be advisable for us to build a dredge ?—Yes. 104. And that we should have the benefit of other people's experience before building ?—Yes; and therefore the application-money would cover all the expenses that were likely to be incurred if a dredge were not built. 105. Was any mention at all made of application-money ? Was not the understanding to this effect: that unless a dredge was built there would be no reason to make calls? —Yes; the companies would go out of existence if no dredge were built. 106. No calls had been made on the shares in the companies whose claims were on the Grey Biver ?—Not as far as I am aware. 107. You stated that you gave me transfers at my request ?—That is so. 108. Did you not send down some blank transfers with a letter asking me to take them, and if an opportunity offered to sell them, and get rid of your liability?—We had a chat about it in Wellington, and I sent them after you. 109. Why did you have to give them to me?— Because they were in my name. 110. Why did I take them ?—Because you said you could get some one to take the liability, and I gave you the transfers to enable you to do that. 111. When was that, do you say?—ln August, I think. 112. Did you not wire me saying that you and some others would not sell shares in the Tucker Flat Company under ss. premium?— Never. 113. You swear that ?—I do. 114. Did you write me in January last asking me to sell these shares —the shares in the four companies under review—and that you would take a premium of Is. ? —Probably I may have done so. I think, if I remember rightly, that I wrote you something to that effect in reply to a letter from you saying that you thought you could deal with them at Is. premium, and I said, " Very well." The shares in the Tucker Flat Company could have been sold at 4s. premium, but you declined to sell them. I have a letter from you to that effect. 115. When was that?--1 could not say what the date of the letter is; I was looking up some documents the other day and came across it. It was written shortly after the company was formed. 116. You said that the companies were not to be floated unless the shares could be sold at a profit ? —That is so; they were not to be gone on with unless the shares could be sold at a profit. 117. You said " floated " just now?—l meant that there was to be nothing further in the way of expenditure unless the dredging operations on the Grey Biver by the Grey Biver dredge proved successful. 118. You said that others had given evidence on the same lines as those on which you are now giving evidence —in regard to misrepresentation ?—That is so. 119. You mean Messrs. Choyce and Abbott ?—Yes. 120. Messrs. Choyce and Abbott are friends of yours ?—Yes, 121. You stated that you objected to pay calls when yoii were threatened with legal proceedings : did you object to the secretary before being threatened with legal proceedings ?—No. 122. Did you have any notice of allotment call from the secretary ?—I did. 123. But you never objected until you were threatened with legal proceedings ?—No; because you told me to take no notice of the notices.