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Committee, therefore, recommend that the Government should grant a reasonable extension of time for the completion of the contract. In any such arrangement, the Committee consider that the Government should insist on reasonable progress being made with the work, and should endeavour to arrange with the company for a release of the land reservation not later than the end of the term of the present contract. F. — Taxation. 5. The Committee are of opinion that with regard to general taxation the company has no claim to special treatment. The Committee is further of opinion that local taxation presses heavily upon the company ; and the Committee desire to direct the attention of the Government to this matter. Proposals, for Guarantee. 6. The Committee cannot recommend that these proposals should be entertained in their present shape; to do so would practically increase the liability of the colony. Conclusion. 7. The Committee recommend that any proposals which may be the result of negotiations between the Government and the company should be submitted to Parliament at its next session. 8. The petition and the evidence taken thereon, together with the documents and maps produced before the Committee, are attached hereto. A. E. Guinness, Chairman. Bth October, 1892. Repokt.—lß93. The Public Accounts Committee have carefully considered the proposals made by the New Zealand Midland Railway Company for a modification of their contract which are contained in the correspondence laid upon the table of the House of Representatives; they have also taken evidence on the subject; and have agreed to the following report:— 1. The Committee cannot recommend the acceptance of the proposals of the company as embodied in the draft contract submitted by them. 2. The Committee recommend that the contract be amended so as to provide that, in lieu of land-grants being made to the company on account of work hereafter to be executed by them, debentures of corresponding value plus 15 per cent, of the Bl value of the land be issued to the company, bearing interest at the rate of 3J per cent, per annum. Such issue of debentures in lieu of land-grants to be conditional on the company surrendering its right to select land within the reserved area of about 5,600,000 acres, after deducting the quantity to which they are entitled and to which they may be entitled for works in progress. 3. That an extension of time for completion of the work be granted to the company, such extension not exceeding five years from the date of signing the new contract. 4. That, if desired by the company, the debentures to which they may become entitled be deposited with the Public Trustee, to be issued to the company in as near as may be twenty equal half-yearly instalments ; the interest of each debenture while in the hands of the Public Trustee to be applied as the company may direct. That this provision shall not be considered a variation of other terms of the contract. J. M. Sheba, 19th September, 1893. Chairman, Public Accounts Committee. Report.—lß94. The Committee, having carefully considered the position of the Midland Railway Company, and its abilitly or otherwise to complete the present contract, and having also considered the proposals submitted by the company for an amendment of the contract, have the honour to report as follows: — 1. That the company is unable to complete the present contract, even with the concessions set forth in the resolution of the House last session. 2. Your Committee recommend that the present contract be rescinded, and that on such rescission a new contract be entered into (provided the Government are satisfied the company can give practical effect to such new contract) on the following lines:— (a.) That the company shall complete the Belgrove Section to a point at the junction of Norris Gully and Motueka Valley within two years, and that such work shall include everything necessary to the complete construction and equipment of the line, with the exception of rolling-stock, and on completion that portion shall be handed to the colony absolutely free from all claims whatsoever. (b.) That the making of the portion of the line beyond the junction before mentioned to Reef ton be left over for future negotiation. (c.) That, in respect of the uncompleted portion of the line between Patterson's Creek and Jackson's, the company be given, in lieu of land-grants, Government 3-J-per-cent. debentures to the amount of £618,250, to be delivered as follows : £200,000 within one year from the date of new contract, and £200,000 within two years from same date ; such first and second deliveries of £200,000 each be made only on the company satisfying the Minister for Public Works that the company is making satisfactory progress with the work of construction ; and the balance, £218,250, on the completion of the through line. 20—1. 11-