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I.—sa.

The thing was then passed over to the officers, and I understand —I do not know —that Mr. Macdonald's title at all events to some extent was completed just about this time. If not, then it was completed shortly afterwards. Then the agreement was executed. The question afterwards arose with regard to the wall and certain negotiations took place. Mr. Macdonald contended, and I think rightly contended, that the wall contemplated was a wall that he could use for the erection of his building—not a wall which would be simply a retaining-wall. It would be contrary to my intention and certainly to his that it should be simply a retaining-wall. In fact the Corporation would object and have objected on previous occasions to having a wall tied on to another wall, and the Council would certainly object to the extra width required being tied on to the foundation, because our Engineer had always reported that these walls are not very often mutually strengthening, and we have refused permits where that sort of thing was sought to be done, and we have always insisted that the new wall shall be pretty nearly as thick as the wall originally put down. Well, that question came up and I have already said that a wall which would be a wall fit for a building of, say, two stories, was in my mmd —a wall which would cost about £250. Mr. Macdonald had agreed to pay £100. The question came up afterwards whether there should be practically a new design for the wall —a design permitting of a very high building being put up. These negotiations took place entirely between the City Engineer and Mr. Macdonald until the City Engineer reported on the matter to the committee and sent along and told us it would cost about £240 extra —that is, than a mere retaining-wall. The matter was then considered by the committee, Mr. Fisher being one of the members present. After consideration it was moved by one of the members and carried unanimously that the new offer should be accepted. The total cost was estimated to be £428. That left us, to carry out the work, the difference between £428 and the £275 —just £153 : so that it was pretty much in the same direction as the previous thing that was in my mind. That was the end of the matter so far as we were concerned. Now, it was originally contemplated that this improvement would cost us £870 plus any small amount that we might have to pay for that corner. I always contemplated that we might have to pay some inconsiderable sum. I was not prepared to pay what I considered the value of the piece of ground because I considered that the owner would be benefited, though not the only person benefited, and that it would be only proper for him to assist us to get the thing through. But I quite realised that, on account of the smallness of the depth of the ground, every foot taken off it was a detriment to it, and that, although the owner would be improved to some extent by the construction of the road, he would be damaged to some extent by the piece of land being taken off. What I mean is that the road with the square there and without taking any of his ground would be quite as useful to him as the road with the curve taken off, and that the curve was entirely for the benefit of those higher up. So long as he got the new level to his place he got all that was required for the road to his ground, but the curve—that is, the taking of the piece at the comer —was for those higher up and people on the Terrace generally. That was the end of it so far as lam concerned. I contemplated that it was going to cost us for works and land anything from £870 to £900. We did not then contemplate a contribution from anybody. That was the actual amount it was to cost us. It has now been finished, and it has cost us within a pound or two —I do not know the exact amount —they have not actually taken out all the figures—of £1,150. Off that has to be taken the contribution by Mr. Macdonald of £275, so that you will see that the total cost to the Corporation is exactly the same which we started on and which we would have had to pay in 1906 if we had been allowed to proceed.* I would like to say in addition to what I have mentioned that that is notwithstanding the extra cost I have mentioned of foundations and all that sort of thing, but also there was the fact that a perfect network of drains was found half-way down the cutting —drains, water-pipes, and gaspipes—and, notwithstanding all that, the work has been done at a total cost to the Corporation, after taking off the amount of Mr. Macdonald's contribution, of the actual amount we started to spend. I do not 'think I have got anything more to say. Just one more thing: It was mentioned here that Mrs. Williams had paid the rates : she has never paid any rates upon this piece of ground (see Appendix Jj. 1. Mr. Witty.] Did the City Council know all along that this was Mr. Macdonald's land? — It was not Mr. Macdonald's land when we first thought of it: we knew after he got it. 2. Do you know when he acquired it?— About April, I think. The negotiations, I believe, had commenced earlier than that. 3. Was that prior to the estimates being passed by the Council—they were passed in June or the April prior to that?—Oh, yes! T do not think he had actually acquired the land in April, but negotiations were going on at that time. But, as I have said, after the vote lapsed I should have no power—certainly, whether I had the power or not, I should not have exercised it—of going on with the work with the vote of the previous year. The £870 was put on the estimates again on the 6th June, 1907. 4. Did the draft letter re the agreement go before the Council prior to the agreement?—lt was the draft agre«ient. 5. The draft agreement, I should say?— Yes, that went before the Council. It was only a proposal. 6. Did the proposal go before the Council?—Oh, yes ! and was agreed to. 7. Hon. Mr. Mills.] Did. I understand from you that you were never in the office of Mr. Kensington with Mr. Kennedy Macdonald? —Never with Mi-. Macdonald, or anybody else, on this subject. 8. Were you in the Government Offices with Mr. Macdonald on any other matter?— Not that I remember. Of course, lam not like those witnesses who came here the other day who could say whom they pretend to be with or saw fifteen months before. * Note. —Since giving this evidence I find that the total cost of the work is only £1,060, £90 of the money spent having been spent on kerbing and channelling not included in original estimate of £870.— T. W. Hislop.