I.—6c

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by the tables submitted by Mr. Blow ?—That table is not correct; it is a statement of an old estimated cost of works. 145. You will admit, I suppose, that, according to B 1 value, you have had £18,000 already in concessions, and that by the doing away with a tunnel a saving of £400,000 accrues to the company ? Hon. Sir J. Hall: And to the colony, also. Hon. Mr. Seddon : No ; the Bl value is kept the same. Hon. Sir J. Hall: The company does not get the same payment in land. 146. Hon. Mr. Seddon.] Yes; there is no corresponding reduction. If you look at the contract you will see there is no saving? —There is the same proportion over the sections as there was before. 147. We get nothing by it ?—You must remember this : If the line costs the colony £470,000 less, the colony in perpetuity has an advantage of, say, £23,500 a year less interest to meet, either by traffic-charges or otherwise, than it would have had before. 177. That is far-fetched?—lt is a fact, nevertheless. You cannot get away from the fact that interest on £470,000 is saved in perpetuity for the colony. It does not matter whose it is—the company to-day, and the colony when it buys the line. But there is the saving in traffic-charges to the colony. 178. At all events, for the time being, it is the company? —Then, it must be for the people of the colony. If the company's rates had to be increased to meet that extra £25,000 a year, who would pay for it ?—the colony ! You cannot argue against that fact. The point is perfectly clear. 179. But apply it to the question of purchase, it makes all the difference. You had all the advantage of the land-grant, whilst the cost of construction has been revised?— Yes. You say it is a concession. Ido not think it is, because you will find the contract says, " The company may construct the incline line instead of the tunnel line," on certain conditions, which conditions have been fulfilled by the company, and the consent of the Governor given, which settles this question. 180. We are not agreed as to the contract. We have kept well within it; but I wish to emphasise the fact that a concession has been granted ? —You cannot call it a concession when it is contained in the contract. 181. Yes; it is a concession ?—No ; a concession would be an advantage outside the contract. 182. No; it is optional. We could have said we would not take it? —You must remember a provision was made in the contract providing for substitution. Where you have such provision you cannot say it is a concession. If there had been no provision in the contract it would decidedly have been a concession. 183. But it is a concession as from the original contract; there it is optional with the Government ; they can either do it or refuse ? —You may say, in the second contract, as compared with the first, this substitution was a concession ; this is not a concession from the present contract. 184. You mean the company under this could have deviated without the consent of the Government ? —No; but the consent has been granted. 185. Then, the Government had to be satisfied as to whether the incline line would be suitable for mineral and other heavy traffic, and whether it could be worked at a satisfactory cost ?—Yes; it has been satisfied. 186. Then, if the cost of the construction of the entire line should be less, a reduction should be made in the grant of land?— Yes. 187. You say mineral traffic may grow, and traffic may be developed; but under this proviso, within ten years you force the Government to take the line at this price; at that time they may not be prepared to do it. During that time this development that may and will take place may not have taken place; consequently, the colony may be forced by this new condition. You got concessions about the gradients, and the tunnel. At that time the contract left it open for the Government to take over the line when they elected so to do. You got the concessions ; and now you say, " You must take the line over in ten years " ?—No; Ido not say so. That is where I want to make the difference clear. What I say is this: that after ten years the Government shall have the right of purchasing the line for two millions and a half if they think it desirable to do so. 188. It provides that the company may at any time call upon the Government to purchase ?• —■ I say, ten years after the line is opened, if the company call upon the Government to purchase, the company must sacrifice £500,000; and the colony would get the line for £500,000 less than it cost the company to build it. 189. Yes; but according to these proposals the colony must take it ?—Yes, for £2,000,000. If we call upon the Government to take it, we sacrifice £500,000, and the colony must take it at that sacrifice price. 190. That is a new condition, and was not in existence at the time we gave you the concession as to the Abt system instead of the tunnel ? —I will tell you why I put this clause in. 191. It was so, at all events?— Perfectly true. What I want to point out, however, is this the only benefit the company can expect to get from that clause is, when the question of finance comes before the public the new departure will at once be seen. We shall have to issue another £1,300,000, and probably convert present debentures, which necessitates over £2,000,000 issue. Financial people will at once say, How are you going to refute the evidence brought before the Committee last session ? The company's answer will be that the debenture-holder at any rate is secured for £2,000,000. That is the only reason I want the clause in :it is purely to assist the company in financing, and to give refutation to last year's evidence on the line not paying. 192. At all events, it means definitely that the colony is committed to a loan of £2,000,000 ten years hence, for this specific purpose ?—lt might be; it is not definitely committed, but it might be if the company were compelled to sell.