I.—ll.

The Governor shall have and may exercise the powers hereinafter set forth in the oases therein provided for:— (1.) In the event of any unreasonable or inexcusable delay by the company in the prosecution of the works connected with any railway, or in the event of the company, after the completion of the said works in whole or in part, so that the whole or any complete part or section of such railway may be used for the purposes of traffic, failing or neglecting for the space of twenty-one clear days, without reasonable excuse, to run trains at the times and in the manner fixed and determined by or in any regulation to be made by the Governor under this Act; or (2.) If the company shall, in the opinion of the Governor, commit or suffer a wilful breach of any contract made with the Governor in Council or the Governor under this Act: The Governor may take possession and assume the management of such railway, and, if he think fit, complete the same, and conduot the traffic thereon, oharging the company with all outlay and expenditure which may be 9ntailed, and crediting the oompany with all earnings and receipts. In such event, there shall be paid by the company to the Governor, and by the Governor to the company, the balance which shall thereafter be found to be due from the one to the other of them from time to time, the accounts being computed and rendered at intervals of not less than six calendar months, or the Governor may restore possession of the railway to the company, or waive any breach in any contract as aforesaid, upon such terms and conditions as he may think fit. Any action taken under this provision shall not prejudice any security taken for the due performance of a contract by any company, as hereinbefore provided. Section 125 provides,— If the company, for the space of one year after the Governor has taken possession as aforesaid, shall fail to repay all sums of public money which have been expended in or towards completing the said railway and the equipment thereof, and all sums of public money which shall have been expended on the repair or management of the railway or in connection therewith in excess of the receipts therefrom, it shall be lawful for the Governor, at any time after the expiration of the one year, to give three months' notice to the company that be intends to retain the railway as Government property. Section 126 provides,— On the publication of an Order in Council at any time after the expiration of the said three months, to the effect that poßSesaion has been taken as aforesaid and will be permanently retained by the Government, the said railway and stations, and all plant, equipments, and appurtenances belonging thereto, shall, unless a satisfactory arrangement be in the meantime made between the Government and the company, become and be absolutely vested in Her Majesty the Queen, without any conveyance or transfer whatsoever. Having thus put before the Committee the scheme and provisions of the Act of 1881, I venture to ask whether any ordinary man of business would not expect that some provisions to the effect of those contained in sections 123 to 126 would be contained in any such statute and govern any contract made under it. Suppose a railway company contracts under the Act to construct a line from point A (which must connect with a Government line) to point D, passing through points B and C. The company finds that the railway from B to C can be easily constructed on the level, but that from A to B and from 0 to D there are expensive engineering difficulties. Further, it finds that the railway from B to C will, when constructed, be run at little working expenses, while between A and B and 0 and D the working expenses will be abnormally high; and that the line from B to G will pay some interest without the connections, and a high rate if the connections are made. It therefore constructs only the section of the railway from B to C, gets a free grant of the land on which it so constructs it, and takes its full land-grants in aid on the estimated cost of that section, selecting of course the best of all the land set aside, and then turns to the Government and says "We have finished, and shall do no more. The line from BtoC is ours; and you can go on and finish from Ato B and from CtoD at your own expense, and provide traffic for our line. The railway from A to D will be broken into three parts, of which we own the middle, and you must pay us toll at both ends." That is precisely and exactly the position which the petitioners assert they are entitled to maintain. Is it not manifest that every person who gave a moment's consideration to such a position, including the company and every person dealing with the company, would expect that such a method would be prevented by some provisions of the statute which gave the company its running powers ? But the same Act which confers the necessary powers on the Governor contains the borrowing powers to which I have referred, and confers all necessary powers on debenture-holders of the company. Could any one reasonably suppose that mortgagees could prevent the Governor from exercising the powers conferred for the protection of the colony, and for enforcement of the contract ? If that were so, then a company could, by simply issuing debentures, defeat all the provisions inserted for the protection of the colony, and under cover of its debenture-holders hold safely the line from Bto C and laugh at the power of the Governor. And if such a company had but a small share capital, and that paid up in full, so that it could not suffer in any action for damages since there was no liability on its shares, and its property was mortgaged to its full value, then its position would be unassailable. Yet, again, that is precisely and exactly the position which the present petitioners assert to be equitable; which they contend they had every reason to believe would be theirs, and which it is morally wrong of the colony to deny them. I by no means ignore the fact that they specially rely on the provisions of the Act of 1884, which I shall next examine. But they must be forced to admit that if my present contention is correct—namely, that any reasonable man would expect to find, and no reasonable Parliament could omit, such provisions as are contained in sections 123 to 126 of the Act of 1881 —then they cannot assert any equity founded on their own carelessness, if they ever read the Act of 1884, in ignoring the facts that the Act of 1881 is referred to in the Act of 1884 as " the principal Act," and that a power of the Governor to take possession, and a liability of the company to forfeiture of its rights are referred to in the contract, and in their own debenture trust deed, and on the back of their own debentures.

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