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I —lα.

C. A. PIPER.

41. And this they did not disclose to you at the time of your visit in connection with the negotiations for purchase ?—That is so. I was led to believe that it was between £2,000 and £3,000. 42. With your knowledge of the working of the business since its acquirement by the Government, do you think that the company's assets acquired by the Government were worth more than the amount paid for them —£15,000? —No, I do not. I may say that after the thing was all settled the general opinion of Queenstown was that we had paid quite enough for them. The best boat of the three —the " Mountaineer " —is now about twenty-six years old, the " Ben Lomond " about thirty, and the " Antrim " is nearly forty —at any rate, thirty-five years old. 43. In the absence of the information which was not supplied to you would it have been possible for an accurate estimate as to the value of the company's assets to have been furnished at that time — I mean, through your not being allowed to see the company's books or balance-sheet, or to obtain any information as to the accumulated cash reserve out of profits, would it have been possible at that date for you to have furnished a satisfactory report as to the company's assets? —The only thing I could have done was to take the property, land, and stores at Frankton, and so on, and work up the assets in that way. The absence of the information which the compauy could have supplied left us very much in the dark as to what the position of the company was. 44. Is another steamer necessary, in your opinion, for the proper carrying-on of the service on the lake? —I think there is no doubt about that. Last year we had on several occasions big lots of five and six hundred passengers, and it was a great crush to get them up. lam not quite sure from memory what the license of the " Mountaineer " will allow her to carry, but I think about five hundred passengers is about the maximum carrying-capacity now. 45. To have properly carried on the service for the public would it not have been necessary, if the Wakatipu Steamship Company had continued the business, for them to have purchased another steamer? —I think there is no doubt about that. In fact, I think, and believe, it was their intention to do so. I saw the plans of a steamer that they proposed to get when they were speaking about it four years ago. 46. Then, if a statement has been made to the Committee by Captain Wing, and also by Dr. Douglas, that they would not have purchased another steamer with which to have carried on the service, it would have meant an inefficient and inadequate service for the lake? —That is so; but I do not understand Captain Wing making a statement of that kind, because I have had the plan before me of a steamer which it was intended to get. 47. Now, it was in September, 1902, that you went to the lakes? —Yes. 48. Will you look at that Cabinet minute dated the 20th January, 1901 —"Agent-General to be asked to obtain plans and specifications for steamer Lake Wakatipu ; speed to be not less than sixteen knots. Approved —J. H. Macalisteh, Acting-Secretary"? You notice that is on one of the railway record files? —Yes. That is eighteen months before the time of the negotiations with the Wakatipu Steamship Company for their business. 49. I will refer you to the following memorandum: "Westminster Chambers, 13, Victoria Street, London, S.W., 29th June, 1901. —Memorandum from the Agent-General to the Hon. the Premier. —Steamer for Lake Wakatipu. —With reference to my memo., No. 1624, of the Bth instant, I now beg to transmit copy of further correspondence with Messrs. D. J. Dunlop and Co., from which it will be seen that they now give fuller particulars to enable the Government to form an idea of the cost of freight of their proposed They also quote for two Babcock and Wilcox boilers for same, which raises their previous estimate from £23,000 to £24,700. Messrs. Dunlop estimate the cost of a steam-lighter suitable for carrying about 120 tons of freight at a speed of eight knots at £4,000. Copy of the Consulting Engineer's remarks hereon are attached, together with the drawings referred to in Messrs. Dunlop's letter. —W. P. Reeves." Now look to see whether in Cabinet, on the 7th April, 1902, the purchase of both a passenger-steamer and a cargo-steamer is approved or not? —It is approved, sir. 50. The minute is signed " A. J. Willis, Secretary to Cabinet "? —Yes. 51. Now, you are aware that considerable agitation and representation had been made in the lake district —and, indeed, in Invercargill —for years previously as to the inefficiency of the lake company's steamers for the carrying-on of the service? —Yes. 52. In the interval they acquired no new steamers, nor did they increase the service on Lake Wakatipu? —That is so. 53. The Government —from the correspondence in 1901 —decided to put on a steamer upon Lake Wakatipu, and in June of the same year they approved of closing with an offer for two steamers ? —Yes. 54. Is it not the case that the Government, in view of the inaction of the Wakatipu Steamship Company, definitely decided to put on steamers; but, in order not to destroy the value of the existing service by competition, finally acquired the steamers of the Wakatipu Steamship Company? —That is the position. 55. And you know, as a matter of fact, that another steamer, superior in every way to any of the existing steamers, is to be put on Lake Wakatipu to run in conjunction with that service?Yes; we must have a better boat —bigger and better than they had. 56. Whether it be the Wakatipu Steamship Company or the Government, the addition to the capital cost of building another steamer—even if a sum of £25,000 was entailed, as is named and approved —must be made; and it would mean an increased earning-power required to enable as high a dividend to be paid as was formerly paid to the shareholders? —Yes. . 57. With the additional cost of the steamer to efficiently carry on the service would it, in your opinion, be possible for the company, even with the high charges they formerly levied, to continue to pay as high dividends as they were formerly paying? —Their dividend would drop to 4 per cent. They could not help it. They paid 8 per cent, for the preceding three years, and if