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Native Land Court, New Plymouth, 3rd June, 1930. The Under-Secretary, Native Department, Wellington. Tongariro Timber Co. and Claims lodged under Subsection (6) of Section 29, of Act of 1929. In reply to yours of the 26th ultimo, as I had some doubt as to whether many of the claims lodged came under the provisions of the section, I discussed the matter with the Board's solicitor and requested him to give an opinion, a copy of which I attach. He advises— (1) That the claim must arise out of the agreement between the Board and the company : (2) That the company or its assignees may make a claim, but not its mortgagee : (3) That any-person may make a claim contemplated by the section, provided it is a claim (a) arising out of the subject matter of the agreement; (b) in regard to some matter in which the owners or any of them are interested as distinct from the Board. He further states that he does not think the Board can consider any claims by creditors as distinct from a claim by the company itself —that the Board should consider any claim by the company, but that claims against the company should not be considered unless put in as part of the company's claim. He specifies the following as claims against the company, and therefore not to be considered by the Board :— £ s. d. (1) Morison, Spratt, and Morison .. .. .. .. 100 9 8 (2) Sir J. P. Houfton's estate .. .. .. .. .. 14.000 0 0 (3) Cammell, Laird, and Co. .. .. .. .. .. 20,720 0 0 (4) Bertram Philipps .. .. .. .. .. 14,700 0 0 (5) C. W. Nielsen .. .. .. .. .. . . 569 9 6 (6) W. H.Grace .. .. '.. .. .. .. 4,500 0 0 (7) Te Heuheu Grace party .. .. .. .. .. 62,326 0 0 (8) K. D. Duncan .. .. .. .. .. .. 13,800 0 0 A further claim on behalf of Armstrong, Whitworth, and Co. for £15,000 was lodged on the 28th May, not with the Board, as required by the section, but with the Board's solicitors. This claim is secured by mortgage over certain of the company's concessions, and particularly the land taken for the route of the railway. At the same time there was lodged a claim on behalf of the Anglo-French and Belgian Corporation for £1,787 17s. 6d. Neither of these claims appears to come within the section, but the Board's solicitor suggests it might be advantageous to consider the Armstrong, Whitworth claim apart from the others, on the condition that any payment made would be in exchange for a transfer of the land back to the Natives. There only remains, therefore, the claim by the company itself for £300,000. In the absence of details it is impossible to say how this sum is made up, but it is reasonable to suppose that it includes a part, at any rate, of the claims made by the individual creditors and also other of the company's debts. Obviously, the position the company takes up is that it was entitled as of right to concessions, and that because it was decided to grant none beyond those already allowed, and to call upon it to carry out the terms of the agreement, which, it was recognized, it was unable to do without further concessions, it should be refunded all its expenditure, whether reasonable or unreasonable, and whether or not of any benefit to the Native owners. It is clear that the company has no legal right to a refund of any part of the amount claimed, and the Board is not prepared to admit that it has any equitable right. During the existence of the agreement the Board and the Native owners were always prepared to carry out their part of it, and therefore the result of the failure on the part of the company should be borne by the company alone. Time was of the essence of the contract so far as the Native owners were'concerned, for the greater the delay in the commencement of operations the greater their interests were prejudiced. Yet, for the purpose solely of assisting the company, delays were granted, the agreement was varied, and concessions were allowed from time to time, in many instances without the consent of the owners being obtained or their wishes ascertained. The result was that a large majority of them actually knew nothing of the position. All they were aware of was that the company had not commenced operations, and that the royalty had not been paid. The bulk of their property was so tied up by the agreement that they could make no profitable use of it, and they suffered as a consequence considerable hardship. Many of them were on the verge of starvation every winter, and were actually compelled to sell any land they possessed not affected by the agreement, and even some of the land subject to it, in order to provide food for themselves. In addition to this, the company knowingly permitted unauthorized persons to go on the land the subject of the agreement, and cut, remove, and sell the timber to such an extent that some of the blocks are absolutely denuded of totara. The Forestry Department has been requested to estimate the damage. So far a complete report has not been received, but I think it will be somewhere in the vicinity of £10,000. It certainly looks now as if the company had acquired the rights to the timber merely as a speculation and without having any reasonable means of carrying out the agreement. It, clearly, had not the necessary capital at its command, and, judging from the claims made, it was compelled to hawk the rights around at a considerable expense endeavouring to induce persons with capital either to invest in the company or take over its rights. Every failure resulted in an increase in the expenses incurred : in order to pay what royalty it did pay and make some show of complying with the terms of the contract, it had to raise money at exorbitant rates of interest. In the end these expenses probably amounted to something in the vicinity of the sum claimed, but the Board, as stated before,