I.—ll

118

Dr. Findlay : Ido not care what we spent on it; we can show by the returns that it would pay us to run the line. But I do object to this method of computing the value on the capitalisation of the income, without any consideration for the prospective value. You put its present value at £135,000 by this process. Why, in the careful hands of the Government this line has been run at a dead loss some years. There is, then, nothing to capitalise. In fact, to be logical, the Crown should contend it is worth some thousands less than nothing. But, then, Mr. Bell says the land-grants must be deducted. He says, " Unless the company had contracted to construct the railway from start to finish they would never have had an acre of land-grant." I confidently take issue with him there. Does any one mean to say that, looking at this colony's finance from 1885 to 1888, looking at the conditions prevailing on the West Coast, looking at the speculative and problematical results of the line, and, above all, at the boon this constructed portion of the line would be to the West Coast people, that the Government of the colony would not, from 1885 to 1888, have been prepared to give grants of land to induce English investors to construct this now constructed line ? Can it be said that if we had agreed to construct a line from the East to the West Coast alone, without the Nelson line, the colony would not have given us land-grants for the portion we so constructed? I say, keeping all things fairly in view, it is certain that the Government would have been prepared to give us grants of land in proportion to the extent of railway we constructed. If it was shown that, although we had only constructed a part of the line, still that that part was conferring a boon on the colony, then we should have received land-grants in proportion to the line constructed. I Invite the Committee to consider whether this line has not been a great boon to the West Coast; and secondly, if so, what land-grants would in any case have been given to the company for constructing this portion. I submit that this inquiry will show that it is not accurate to say that no land-grant would have been given unless the whole of the line was constructed. It will surely show that the Crown is not entitled to treat the landgrants as if they were really payment of, or part payment of, the line. If the Crown had exercised its powers under section 43 of the contract, and had taken the line from the debenture-holders by purchase, it would have had to pay —(1) The bare cost; (2) the interest on construction ; and (3) no deduction would have been made from the price for land-grants. Clause 43 lays down the rule, as plainly as can be, as to what you are to pay these people if you take a portion of the line from them. Let me put it to you in this way :It is admitted by everybody that, under clause 43 of the contract, if for any reason the Crown chooses, before the line is completed, to take a portion of the line, even after the expiration of the contract time, it can take it on paying the bare cost of it. The words of the clause are these :— If under the provisions of the principal Act or the said Act, or under or by virtue of these presents, the Governor shall be entitled to take possession of the said railway or any part thereof, then in lieu of taking suoh possession he may, if he think fit, exercise the right to purchase the said railway, although the said period of ten years may not have expired, or the said railway may not have been wholly constructed, and suoh right shall be deemed to arise on his giving six months' notice to the company of his intention to exercise this right, acd thereupon, and without any further notice as prescribed in the principal Act, the price to be paid for the said railway shall be ascertained and determined as provided by the prinoipal Act, except that section 118 thereof shall not apply. That is to say, they shall not have to pay the 5 per cent, which section 118 of the Act of 1881 provides for when the whole line has been completed. That is the measure of compensation which is set up by us, and I submit that it is the only fair one to which you can appeal. It is the bare cost of the line. I know that, in the face of the decision of the Privy Council, you can take this line and keep it for ever, but I have pointed out that in your own contract you established a more equitable method of dealing with the matter by taking the line at its bare cost. Mr. Coates desires me to say that to estimate the value of this line merely by what it will fetch in the market is utterly wrong and unjust; but should you be disposed to accept that method of estimating its value, he desires you to give him the option of taking back the railway instead of recommending payment of such a valuation. He desires me to repeat that if you will give us back the line we shall be perfectly satisfied. Let me show you how the Premier stated all this a little while ago. In October, 1899, he says : — The line has cost the oompany £1,200,000, and he supposed the Government had close on £400,000 involved, including the value of the land granted to the company. The oompany had repaid the first two or three instalments —small amounts —but not the others. The value of the work done was about £700,000, and the Government had given the company land of the value of a quarter of a million, so that the Government's actual interest was about £400,000 roughly. Mr. Bell: Does the amount of money which was expended by the Government come into that? Dr. Findlay : He deals with that too. He says,— " They had at the present time £850,000 value of work, and it would take one million to finish it to the Gass, and to finish it to the bottom of the Otira Gorge. There was, in round numbers, nearly a million of money spent on the work." The Answer to the Criticism that we have come to Parliament as Suppliants only when we had fought the Colony to the Bitter End in the Law-courts. As I am near the close of my address, let me dispose of a common hostile comment which is made upon us. It is said that we have prejudiced our cause and alienated sympathy by first attacking the colony in the law-courts to the bitter end and then coming to Parliament as suppliants when we were beaten at every point of law. I say that such a criticism is not only ingenerous, but it is unfair and it is untrue. My answer is that we had recourse to law only when every other means failed us. You will remember that we came to this Committee in 1892, and seeking bread we got a stone. The company frankly told you its position. It made an announcement to you,