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doubtedly. I think that if Parliament is made aware officially that any Board is in difficulties, and that relief can be given by legislation, confined to its original privileges, it ought undoubtedly to be done. Ido not believe at all in increasing rates between the bondholder and the ratepayer. If the bondholder lends his money on a shilling rate, he has no right to demand a rate of more than a shilling. 318. It is merely a question of the State fathering the responsibility as it were? —I would not father the responsibility at all. I should carefully guard myself against that. I should only give relief within the original concession. I hope I have made myself quite clear to the Committee that I have guarded myself carefully against going beyond that. 319. Mr. Jones.] Do you mean that the bondholder in this case is getting more than he was entitled to ?—No, but there has been some talk, and there is some talk that, if a shilling rate will not pay, we ought to put on a two shilling rate. But I hold that where money has been borrowed on a specified rate, no one ought to levy a larger one. 320. But fd. is a larger one than was specified, is it not ?—lt is in some cases, and not in others, and it was fixed by Act of the Assembly. I think that the ratepayers would have some grounds to come to the Assembly and say, " This is making it more, and we ought to have relief to this extent." If ultimately fd. on the capital value is found to be much over the Is. in the pound on the annual value, I think it ought to be altered in Parliament. But if the price of cattle were to go up it would not make so much difference. As a matter of fact when the change was made the fd. capital value was less than the Is. annual value, and power was given to the Controller-General to raise the rate when it was found necessary, so as to make it equal to one of Is. capital value. The shilling rates were taken all over,.the colony, and an average was struck, and-it was found that in the country districts Is. in the pound was a little more than fd., but in the big boroughs it was less. 321. Mr. Tanner.] If the shilling rate is not sufficient to pay the bondholders their interest, how should it be provided for ? —That is a serious consideration. I am not prepared to make a statement, but no doubt we have no right to put it on the ratepayers, because the latter have the same claim on the colony as the bondholders. 322. Mr. Larnach.] Then the only alternative would be the colony ? —I should not like to say that. But the ratepayers are as much a party to the bargain of the shilling rate as are the bondholders. I cannot see how the bondholder can have any claim on the ratepayer over the shilling, because he was aware when he lent the money that there was a limit to the rate. Wherever the money has been borrowed on a general rate, Parliament would be bound to see that a sufficient rate was put on, because the security given is unlimited; but where a limit is specified I cannot see that the bondholder can go beyond the limit any more than the ratepayer. 323. Mr. Tanner.] Do you not think that the bondholder would be entitled to recover from the colony ? —No, no more than a private mortgagee would. 324. Mr. Samuel.] You look on it merely as a question of expediency, that it might be expedient to provide funds for the bondholder ? —That is quite another question. ■ 325. But your opinion is, as a question of expediency, that it affects the whole colony, and not a particular district ?—As a matter of public policy I should wait till the time came and then decide how to act. But I cannot see that, as a matter of expediency, we should put it on particular ratepayers who have fulfilled their share of the contract. I have heard it suggested that Parliament should increase the special rate; but I dissent entirely from that. 326. Mr. Larnach.] That would be like raising a man's interest from 7 per cent, to 9 per cent, without his consent ?—Yes, and we have no right to do that. 327. Mr. Tanner.] Do you not think that the bondholder has a claim on the colony ; that is, the Act was passed by the Government and the loan authorised by the Government, and that, on that account, he would have a right to expect protection from the Government ?—I cannot see upon what grounds he would have a claim, but I have no doubt he would make a claim at once. 328. But do you not think that there was anything in the Act, or in the consent of the colony, that would lead him to think that he had a claim ?—No, I cannot see that there is anything at all to induce him to think so. 329. Mr. Samuel.] I have been carefully through the matter in course of the litigation I have referred to, and I can assure the Committee that there was no understanding expressed or implied that the colony was bound to supply either principal or interest ?—That is the case, and the lender gets much larger interest in consequence. 330. We have spoken of the 25 per cent, of the land revenue as being to a certain extent an endowment for the construction of a harbour. Is it not a fact that it is almost the only endowment the district took out of the lands of the colony under the provincial system ?—Yes, practically it is. 331. Did not Canterbury, Otago, and other provinces take large endowments ?—Yes. 332. So that although it is exceptional in respect of its being an endowment for a harbour, it is not exceptional as an endowment taken from the land when the Land Fund was administered by provincial governments? —No ; Parliament recognised the moderation of the endowment by passing the Act.

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