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33. You .estimated the cost at £6 per ton, and said it might be reduced by 25 per cent, if the work was kept going all the year round?— Yes; my estimates are approximate, however. 34. The State might see fit to subsidize the industry to some extent? —Yes. 35. In calculating the cost of production I presume you have taken into account the cost of labour?— Yes, of labour as far as we know it to-day. 36. I understand you have information to give us on other matters?—l wish to refer to the subject of investigation and research regarding the potentialities of brown-coal slack for the distillation of crude oil and by-products. I have already stated that the geological estimate of brown coal in situ in New Zealand is 728,000,000 tons, and that the total output at the end of 1917 of such coal was 13,774,384 tons. The output for 1917 was 629,174 tons. About 33 per cent, of the output is slack—that is, it passes through, a screen of 1 in. mesh. In Victoria a company is being formed with a working capital of over one million to work the brown coal at Alton Bay, near Melbourne. The prospectus states that it is proposed to manufacture and distil from brown coal various chemical products, including motor-spirits, illuminating and lubricating oils, paraffin, sulphate of ammonia, and calcium carbide, also to supply electrical energy generated by using as fuel under the boiler the waste which is produced in the process of distillation. The brown coal of Germany is used on a large scale for by-products recovery; the output of brown coal was 75,000,000 tons per annum. It is largely used to produce oil and valuable by-products. It is estimated that less than 10 gallons of crude oil per ton of coal is sufficient to warrant oilworks. Recent tests with brown coal in New Zealand give an excess over 10 gallons, varying up to 15 gallons. 1 suggest that this is a subject deserving of consideration in New Zealand. At the present time the slack from the brown-coal mines is sold at a loss on the cost of production at all the mines. It is sometimes thrown away in the slack-heap. The difficulty in the matter is that brown-coal deposits are largely held by private companies, and for the utilization of the slack produced at such collieries it would be necessary to install works in a central position. The owner of such works would have to enter into an agreement with the colliery companies to purchase their slack of brown coal. The oil requirements of New Zealand could be, to a certain extent, obtained from such sources. 37. Dr. A. K. Newman.] Would it not be a handicap to the scheme if the slack is scattered all over the country?— The Waikato Coalfield is the principal producer, and all the mines are within eight miles of Huntly. If works were established at Huntly, which probably is the future Newcastle of New Zealand as regards the coal trade, the works could be supplied with slack without great cost for transport. 38. Has not the production of electricity from brown coal been found very expensive : I am referring to some gigantic works near Berlin I —Brown coal has not the evaporative power of bituminous coal, but there is an output of 75,000,000 tons of brown coal per annum in Germany. It is not so good as bituminous coal for producing heat, but in the proposal for Alton Bay it is the waste from the distillation of the brown coal which will be used as a fuel. 39. While I think strongly of your proposal, I do not remember reading, that it is in a working and profitable condition in Great Britain?—ln Great Britain they are working on a cannel coal. lam unable to state if it is on a payable basis yet. 40. Or anywhere else in the world ?—lt is quite a new idea. lam not able to state as to the results commercially. 4.1. But is it in practice anywhere?—lt is one of those new things that has to be considered. It is a subject for investigation. A few years ago the aeroplane had not become practicable, and somebody had to make a start. The demand for oils has increased so enormously of late years that something has to be done to procure oils, and as it is hoped to get oil in New Zealand 1 make this suggestion. 42. Mr. Veitch.] We might at least watch Australia's experience?— Yes. I have an article on the subject. It is considered important enough to be incorporated in the first bulletin of the Board of Science and Art recently published in New Zealand. 43. Dr. A. K. Newman.] I only want to point out that the scheme is not yet in workingorder?—No; I cannot say it has been profitably applied hitherto. 1 have not expressed a definite opinion either way as to whether it can be profitably carried out here. 44. Mr. Graigie.] Is the Alton Bay a large mine in Victoria? —No. It lias, I believe, a considerable deposit of brown coal which it is proposed to work for crude oil and by-products, and the reports on it by experts in England are distinctly favourable. 45. Their intention is to develop the output for the purpose you mention?— Yes. It is considered important enough for the New Zealand Trade Commissioner in Melbourne to communicate to the Government in New Zealand the details, also experts' reports on it, with other particulars. The reports are by eminent men in Great Britain. They recommend a plant to cost ove.r a million. 46. The company seems pretty large, with a million of money. Are they going on?— 1 see a note on the prospectus that owing to the declaration of war the formation of the company in London was suspended. 47. On a large scale it could be more economically worked than on a small scale? —Yes, if the management is equally good. 48. You say that Huntly would be the centre. Would the output of the mines be sufficient to put a deal of capital into it?—lt would depend on the demand. The output of coal is large. There are five collieries working there, and the output is likely to increase. 49. The works you have referred to in Australia are near Melbourne?— Yes. 50. They could retail their electricity to a good market? —Yes.