15

G.—7

The guarantors — A sound and attractive investment carrying 10 per cent, and more, plus certain other benefits. On the other hand, they were virtually obliged to set aside, or at any rate make provision for, the amounts covered by their respective guarantees, to be paid when called upon. The New Zealand Underwriting and Development Corporation — Its underwriting fee, which would have amounted to a substantial figure. Applying now the principle adopted above, I think that the least that Mr. Grace and I could reasonably be asked to accept is 20 per cent, in cash or its equivalent of which we would have received had our project been carried out. He and I worked hard for over two years on the project, and the remuneration which we would have received from the new company, or the percentage just mentioned, is no more than is commensurate with the nature and quality of our services or the magnitude of our undertaking. The position was almost, though not quite, the same with Mr. R. W. Smith, and, as the allocation of his shares was conditional, I think that he is entitled to a percentage of 10 per cent. As for the guarantors, the position with them was that each of them guaranteed one or more blocks of £6,000, and I think that an allocation of, say, £200 for each block would be little enough in the circumstances set out above. As for the New Zealand Underwriting and Development Corporation, its compensation could well be fixed at, say, £2,000. Finally, and in addition to the foregoing claims, there is one for out-of-pocket expenses. These were all paid by me, and amounted to over £1,000, and I think I should be recouped this amount. This brings me to the stage where I can set out in detail the particulars of our claims. They are as follows, and are, of course, for cash, or its equivalent : — £ (1) Myself .. .. .. ... .'. .. .. .. 5,000 (2) Mr. W. H. Grace. .. .. .. .. .. .. 2,000 (3) Mr. R. W. Smith .. .. .. .. .. .. 1,000 (4) Among the guarantors on account of fourteen blocks of £6,000 each taken up by them (£2OO per block) .. .. .. ..2,800 (5) The New Zealand Underwriting and Development Corporation .. 2,000 (6) My out-of-pocket expenses .. .. .. .. .. 1,000 £13,800 This completes the presentation of our claims, and I now commend, them to you for your most favourable consideration. I have only to add that, in presenting them, I have tried to put the position fairly and squarely before you and that, in fixing the amounts of our claims, we have reduced them to the minimum. If you require any further particulars, I shall be glad to supply them. I shall also be glad if you would, as each occasion, arises, advise me of any further steps which you will require me or my syndicate to take. Yours, &c, K. D. Duncan. Office of the Minister of Native Affairs, Parliament Buildings, Wellington, N.Z., 14th February, 1928. K. D. Duncan, Esq., 3 Halswcll Street, Wellington. Deae Sib, — Tongariro Timber Co., Ltd. I have the honour to inform you that Cabinet has considered the request made to me by you recently—namely, that, assuming you can float a company with a working capital of £300,000 to take over the rights of the Tongariro Timber Co., Ltd., under the agreements between the Aotea District Maori Land Board (as agent for the Native owners) and the Tongariro Timber Co., Ltd., whether the Government will — (1) Extend the times for building the railway-line by, say, three years and ten years : (2) Extend the time for paying arrears of royalty now due Ist April, 1928, to, say, Ist September, 1928 : (3) Agree to a modified standard of line, provided the consent of the owners is obtained : (4) Grant the above concessions to you alone. It has been decided that the Government cannot see its way at the present to grant any extension of the time within which the company is bound to complete the construction of the railway-line, but if on or before the 12th September, 1928 (being the date on which the company was required by the Order in Council of the 12th September, 1921, to complete the construction of the railway-line) you float the proposed company, arrange for the necessary finance for building the railway, pay all arrears of royalty, together with interest thereon at 6 per cent, while unpaid, pay outstanding rates and taxes, Board commission, and any other charges or sums due by the Tongariro Timber Co., Ltd., under its agreements with the Aotea District Maori Land Board, the Government will undertake— (1) To give sympathetic consideration to your requests as mentioned above ; and (2) Protect the company's rights in the meantime by refusing consent to any application under subsection (1) of section 19 of the Native Land Amendment and Native Land Claims Adjustment x\ct, 1915, as amended by section 19 of the Native Land Amendment and Native Land Claims Adjustment Act, 1921, and section 28 of the Native Land Amendment and Native Land Claims Adjustment Act, 1923.