I.—BA.

made arrangements with the Kauri Company to sell to them on condition of their meeting the interest on the capital, they could keep it for the purpose of hardening prices; and, in that event, a very small advance on the output of their mills would bo sufficient to pay interest on the £12,000. 439 a. The effect of that would be for the railway to lie useless ? 440. Hon. Mr. Larnach.] Is there the same risk of fire in these forests as there was a few years ago, now that settlement is going on?— I think the risk will be increased now there is settlement. 441. Do you think the risks will be increased where roads are cut through the forests? —1 think the roads have very little to do with affording security to the forests, because the roads mean increase of traffic ; and increase of population without restrictive regulations in the matter of fire would only increase the liability as to fire. 442. As the timber or bush gets thin that lessens, week by week, the risk of fire? —No, Sir ; it increases it. The more dense the vegetation, the more damp will the ground remain, and the.less facility is there, therefore, for the spreading of fire. What causes great loss in kauri bushes is the lighting of fires amongst the ferns upon the adjoining ranges in the most dry season of the year, and these fires run up to the edge of the forests and catch hold of the dry vegetable humus which is just about the foot of the trees, commonly known by the name of pukahu; and, spreading in this vegetation, it will creep away for great distances without being seen at the time. You will fancy the forest is not being destroyed, but in the course of time you will behold only the outlines of bleaching trees and weird trunks standing up; and the next fire that comes destroys that timber so effectually that you would not suppose a kauri forest had grown there; and it follows the resinous roots so deep down into the earth that every particle of humus is burnt out of the soil. Not only has the country lost the forest, but a sterility is inflicted on the soil that is to punish generations to come. 443. That produces kauri-gum*?—No; it destroys it. Kauri-gum I believe to be more the result of forests' growth in ages past, the gum exuding from the roots and tops of the trees being buried under the earth, and gradually formed at the time the forest is growing. 444. How do you account for gum country being so bare ?— Well, a kauri forest will itself disappear in some instances from the face of the earth. I cannot tell the ages of these fossil deposits of gum, but I know this : that the gum is even like a gold-diggings—it is known to have travelled down in the earth till it lay in gullies actually in leads, even in small degrees, just as alluvial gold is found. That gum in these gullies was not the result of growth actually there, but had exuded from trees grown up on the ranges. To show what fire does, I may mention that where a fire has destroyed a forest you can always tell it by the appearance of the gum. The gum is charred, and actually useless and unsaleable. Whenever a forest is destroyed by such fire as I have described the gum is destroyed at the same time. 445. I was going to ask you, in reference to the price of kauri, if this kauri on the company's land could be delivered from the railway for 3s. 6d. per 100 ft. ?—Oh, yes ;it could—that is, I take the average of the whole block. . ■ 446. That is not baulk kauri ?—Bound, not squared kauri. The squared kauri would not be much more—it would not be more than 9d. to Is. per 100 ft. more—but the quantity for haulage to the line would be diminished by taking off the slabs, waste, &c, as against the round timber. If the timber were sold as squared timber—and probably it would be, especially as the railway is not owned by the Kauri Company —there would be a diminution in the haulage on the railway. 447. And less waste of the logs, having them squared instead of round ?—There would be less waste to the owner. It depends upon the manner in which he is going to use the timber. 448. What is the price of kauri now in Auckland, tree on board ?—You mean squared or sawn ? 449. Say, squared ?—Squared timber is ss. 6d. on the river. 450. Are you aware what it has been selling at in Melbourne ?—I forget the price, but I know it was low. I'know some friends of mine connected with the kauri business sent over some kauri to Melbourne, and it proved an unprofitable speculation ; but some time before that kauri was fetching a very good price there. 451. Do you remember the figures—2os. or 255. ?—Oh, no ; 12s. or 13s. per 100 ft. 452. What freight do you pay to Melbourne?—l have not been in the trade for some time, but I believe it is 4s. or 4s. (3d. _ 453. Even with the freight at 55., there is a fair profit in sending it there, paying ss. bd. tor it here : there is a good margin there even then? —There is a close margin. 454. Mr. Rhodes J] What is the duty on kauri?— There is no duty on baulk. 455. The freight is ss. ; ss. 6d. is a good price for the timber; that is 10s. 6d. ; you are then left a margin of 2s. ?—Two shillings will not cover the charges that come under the head of incidental expenses—the commission and other charges. I may say Ido not wish the Committee for a moment to question that the prices I have given would be realised. I have put them at what I consider low prices. .... , . AT 456. Have you been up the Kaihu Valley and seen the railway since it has been made !— No.

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