E. —-8.

the time to the proposal of dealing with all stock: as common property, and charging the cost of repairs to a joint account; and, moreover, it was evident from the Engineer's great anxiety to have a joint account, tlurt he was fully aware that it would cost a very large sum to bring his stock up to the standard of efficiency. I hereby challenge the Engineer to a thorough and impartial investigation of the condition of the Otago stock as compared with that in Canterbury, and I earnestly request that you will conduct this investigation personally, calling in, as reliable witnesses, tradesmen and. others connected with the line. " By this means I feel satisfied that you will be convinced that I have in no way exaggerated any of my statements. " I must leave the second paragraph of the Besident Locomotive Engineer's letter unanswered, as it had evidently been hastily written, without regard to official etiquette, and as I desire to deal solely with matters of fact. " Allison D. Smith, " Ist May, 1880. Locomotive Engineer." No reply being received to the above, nor any action taken in the matter as far as I could see, I permitted the matter to drop. Notwithstanding that, these wagons continued to turn up iu Christchurch from time to time, where we rebuilt the worst of them as they came in for repairs. About the 19th February last, when the Hon. the Minister for Public Works was inspecting the workshops at Christchurch, two of these wagons were pointed out to him in a siding, and the Commissioner informed him that the work had been done by contract. In my examination before the Civil Service Commissioners I was asked, " Were these wagons built in the workshops or by contract ?" and I replied, on the combined authorities of the letter of the Eesident and Locomotive Engineer, the indorsement of the Commissioner on that letter, and on the verbal statement made by the Commissioner to the Hon. the Minister, that they were built " By contract." I was then asked, "In all cases ?" and I replied, "To the best of mjr recollection. It may be that some of them came from the workshops." Having now stated all I know in connection with this matter, I beg, in conclusion, to remark that' although I had nothing to do with the construction of these wagons, I knew that as soon as they commenced to run I should be held responsible for their proper working, and for the cost of their repairs. For this reason, the knowledge that they were being badly built was duly represented to my superior officer, and afterwards, on inquiry, was mentioned in evidence to the gentlemen appointed by the Government to conduct an investigation into the working of the department. As the Engineer in Charge has denied any connection with this stock, I have the honor to point out that direct evidence can be taken from the men who actually built the wagons; and I here quote from a letter received by me the other day, which will indicate a direction in which inquiries might be made: — " Patrick Street, Eglinton, Dunedin, sth July, 1880. " Mr. A. D. Smith, Locomotive Engineer, Christchurch. " The other day I noticed in one of our local papers your statement re wagons built here had been impugned. If you require any further evidence to suport your statement, there is a man named Millar, a carpenter, who was at work at Hillside when some of the wagons were being built. He is a comparative stranger to me. . While I had charge of the erecting shop he came to me on several occasions, and complained of the way in which the wagons were being put together, saying the workmanship was very bad, the men not being allowed the time to do the work. Of course I informed him that I had nothing to do with that department. He left the works ; I cannot say for what reason. . . . " J. L. Simpson*." I have, &c, Allison D. Smith, District Locomotive Superintendent.

The Commissioner of Eailways, Middle Island, to the Hon. the Minister for Public Works. Office of the Commissioner of Eailways (Middle Island), Sib,— Dunedin, 24th July, 1880. I have the honor, with reference to, and confirming, my telegram* of the 20th instant, to submit Mr. Armstrong's statement relative to wagons 1515, 1595, and 1670. I can justify and confirm Mr. Armstrong's repudiation in reference to the two wagons first named, by stating a circumstance which he has omitted to refer to, but which is easy of proof. It is, that he built no wagons of a lower number that 1639, which was his commencing number. Injustice to. Mr. Armstrong, it is incumbent upon me to state that his assertion as to the pressure under which he constructed the thirty wagons, of which 1670 was one, is strictly true. The material put into those wagons was avowedly inferior, but I have no reason to suppose that the workmanship was not all that it ought to have been. The matter of workmanship, however, is one that lam bound to leave in the hands of the officers who are placed in charge of the works. In this matter very bold assertions have been made and serious charges brought, and the object of them, it is to be feared, is not far to seek. A thorough investigation, I submit, is indispensable • and I beg leave to suggest that two practical men, thorough experts, be sent down from the JNorth Island to examine and report upon the work, not of Mr. Armstrong only, but of Mr. Smith also. I have, &c, Wm. Conyers, Commissioner of Eailways, Middle Island.

* The substance of this telegram is contained in the memorandum.

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