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MINUTES OF EVIDENCE. Thursday, 21st September, 1911. F. G. Dalzibll examined. (No. 1.) 1. The Chairman.] Will you make your statement? —Yes. In the first place, I would like to say Mr. Blow was perfectly right when lie stated that legislation is not necessary for the purpose of obtaining an Order in Council for the completion of the line, nor is it necessary to obtain an Order in Council for the purchase of Native lands. Bui we recognize that it is very probable that we cannot obtajn whal we are seeking unless the fullest publicity is given to the proposal aiid every opportunity afforded to the people who object to it of publicly stating their views, so that the proposal can have the fullest consideration possible. With that end in view I have suggested to Mr. McDonald, and I understand that the Committee has agreed, that the Press might be represented and be at liberty to publish (h< , evidence as the proceedings go on. Now, in order that the Committee may understand the position, 1 think it is necessary to inform it. shortly of the history and financial position of the Taupo Totara Timber Company. It was formed in the year 1900 for the purpose <>i cutting .>ur the totara timber in forests in the Taupo district. The capital consists of £100,000 issued in debentures bearing 6 per cent, interest. The shares called "A" shares rank next after the debentures, amounting to £91,760; the preference shares, of .£7."),000. rank next to the "A" shares; and then the ordinary shares amounting to £75,000; or a total capital of £341.780. In addition to (he above capitul there is to-day an accumulation of preferential dividends —that is on the ''A " and preference shares — amounting to £50,000. The company has always paid the interest on its debenture loan, lint has not during the eleven years thai (he company has been formed paid any dividends at all to its shareholders, either preference or ordinary. Its sawmilling operations began in 1903, when the tramway was completed for a distance of fifty miles from Putaruru. During the first two years a substantial loss was made, but the operations are nun being carried on at a profit. When the company was formed, the best estimates we could get, or the people who put the capital in—at that time the preference shareholders—could get, was that there existed somewhere between ■100 million and 500 million feet of totara and nuitai timber. Our experience, however, shows that it is practically impossible to obtain a safe estimate of the totara timber contained in any totara bush, and our working shows thai when we began we had probably not more .than 120 million feel instead of 400 or 500 million feet of timber in the company's bushes. These figures satisfy us to-day that there is scarcely any prospect at all of any part of the ordinary capital being returned to the shareholders. There is considerable doubi even if there will be anything returned to the preference shareholders. On the other hand, it is probable, we think, that the debenture capital ami the " A " share capital, with interest, will be returned to the people who hold this capital. Of course, it all depends on the quantity of timber in the bushes. You can only get a certain profit on timber, and if your supply is limited you ma\ not have enough to get a return of your capital, although you may be making substantial profits. During the last nine years the company has employed on an average not fewer than 250 men, and during the past si years has paid in freights on the Government railways an average of nearly £11,000 per annum, in addition to about £600 per annum for rates and taxes. My purpose in stating the financial position of the company is not d> suggest that the company is entitled to any assistance at all from the State, but I do suggest that the promoters of an enterprise of this magnitude- -which unquestionably has been of service to the district and the State —are entitled to a full and fair consideration of the proposition outlined in the petition of the company which is now before you. For tin , purpose of conducting this business the company has constructed a railway from Putaruru, about thirty-two miles from Rotorua, to Mokai, and one point of its line is situate within twenty miles of Taupo. The actual survey shows the distance to be about twenty miles from the company's line to -Lake Taupo in the Taupo County. Now, some questions have been raised as to the character of the line, which has been constructed by the company. I produce for the information of the Committee a report submitted to us by Mr. John Coom, who was recently and for many years Chief Engineer of the Government Railways. An\ one who knows Mr. Coom will be satisfied that any report from him may be treated as reliable, because he is both a competent and 1 believe a reliable man. Ido not propose to bother you by reading the whole of the report just now. but I will read to you the conclusion he came to. He says, "In a general way I might remark that I was surprised to find the line and works so efficiently maintained. There is nothing !n the condition of the track to-day, with the exception of the narrowness of some of the banks, to which any objection can be raised. As I have pointed out, these can be widened at a small cost, and 1 should have no hesitation in giving a certificate that the line is fit for passenger traffic ;>! moderate speeds—say twenty to twenty-five miles an hour on the straight lines—as soon as this has been done. Estimated cost of alterations and additions: Widening cutting. Lichfield-Kopokoraki, £25; widening banks. Liohfield-Mokai, £400; accommodation at stopping-places, £200; providing stop-blocks and point-locks at siding (say), £50: total £675." So that in Mr. Coom's opinion this line could be used for passenger traffic with an expenditure of only £675. This tramway, as Mr. Blow informs you, was built under an Order in Council made under the Tramways Act of 1804, which fixes the maximum rates for goods and passengers. He also informs yon that we are entitled to carry passengers when a certificate has been issued, which has not yet been applied for. When the line wns first constructed it was not thought that there would be sufficient traffic in the Taupo district

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