I.—Ba.

330. Pay working-expenses and 5 per cent ?—More, if we can send down 50,000 ft. per day, as Mr. Barstow says we might. 331. For how many years would that thing last ?—About twenty years, taking Mr. Knorpp's estimate as correct. 332. The Chairman.'] I see this estimate of 260,000,000 ft. is not Mr. Knorpp's own estimate ?— It is only quoted by him as given to him by some other person. 333. Mr. Rhodes.} Upon what mileage of railway was the land given to the company ?—Sixteen and a half miles. They got land of a value of £900 per mile. 334. You do not hold that they are entitled to any more until they have finished the railway ? —No, I do not. 335. Is there much kauri-land in the hands of the Government still ?—Yes, all this 300,000 acres which has been mentioned. There is kauri in the valleys, but not very much on the height* 336. Do you think it advisable to work that out before the Government buy more ? —No ; the land given to the company is just around the end of the line, and the timber on this would first go to market. 337. Do you not think it advisable they should first work out their own kauri-land before speculating in other kauri-land?—l do not call it speculating when the Government are getting back their own. 338. You would have to take pver the land with all the liens and other equities affecting it. Do you think that a serious thing ?—lf Government are in £48,000 already, I think the wisest thing is to take over the whole concern. You see, Government get all this land back again. 339. Not without paying all the equities? —No, certainly not. The whole thing is simply this : Government has to face £90,000, speaking in round numbers; or, in other wrords, an additional £40,000 to the existing liability. 340. Why not the other—have you considered the proposal of simply taking over the railway? —Yes. 341. As to the three miles of railway, what is you opinion as to the completion of that?—lt is required, to make the railway of much account. That three miles takes you right into the kauribush. 342. What would be the effect of fire?— Very disastrous if it burnt the kauri. 343. It would make the whole thing worthless ?—lt would go very far towards doing so. 344. Practically, the whole concern would be worthless, land and everything ?— Well, it would would not be worthless. You would have to convert the burnt kauri within a short time, and send it to market. 345. If it pays to run kauri, why do not the company do so? —They have not been able to sell. They arranged to sell the kauri, but subsequently discovered they could not do so, as already explained. 346. They could sell the land in small blocks ?—Well, I may tell you this : it is a vast affair, a kauri-mill company ; it is a very great business indeed, and requires a very large amount of capital and a large area to operate upon. It cannot be carried on, to pay, on a small scale. You might just as well talk about taking up 500 acres in Canterbury in the back Mackenzie country, and starting a sheep-farm. It is just as absurd. The only w:ay to work these forests is to do it on a large scale, extending operations over many years. 347. Mr. Turnbidl.] With regard to the three miles of railway, do you think Government should be bound to take over that three miles, and pay the claim of the contractor, Mr. Fallon ?— I think so. I have already stated that if the Government took the thing over at all they should take it over in globo —everything in connection w 7ith it—and make it one business. There should be no half-and-half measures in the matter at all. It requires to be handled by the Government, or a company which has a good financial bottom. 348. It wall cost £60,000 ?—lt will cost more. It will cost £90,000. 349. What other expenses are there ? —They owe contractors a lot of money. 350. But they have bush as security?—l am going most distinctly on this basis that Government should take all the land back. Government should simply take the place of the company. 351. There would be this to consider : Mr. Owen, the mortgagee, having this bush as security, would realise it, and Government would get the profit of carrying the timber ?—I do not think that would work. 352. Hon. Sir J. Hall.] In recommending the Government to take over the whole concern, I presume you have formed in your mind a statement of assets and liabilities in connection with the concern? —Yes. 353. Will you bo kind enough to say what you reckon the liabilities to be ?—The way I come to it is this : Government is already involved to the extent of £49,000. There is 5 per cent, on this which the Government is paying—say, £2,500 a year. The company are totally unfit to go on. That is assumed, and does not require any proof, I presume. No other company is likely to take it up; and, if Government do not take it up, the line will go to waste, and become useless. 354. I was asking for a list of the liabilities ?—I have said if Government took it over they will really be liable for a total of close on £90,000. 355. How do you make that up?— From the statement given by the company of their liabilities. They owe £25,000 to two contractors, £8,000 to the bank, and other lesser sums. 356. Mr. Turnbull.] The bagik have security for that on the uncalled capital ?—The liabilities will be reduced by that, then. Well, say £80,000. 357. Hon. Sir J. Hall.] What are the assets against that ? —All the land returned w Te have given away. 358. What is your valuation of that ?—The valuation of Mr. Smith and the other arbitrator is, as near as may be, 19s. per acre,

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