W. H. GRACE.]

9

I.—3a.

If the Crown thought fit to increase production above the figure suggested, its profits would be increased by practically the royalty value (3s. per 100 ft.) of the increase in output; but, assuming that the Crown restricted production to the figures given above, its position at the end of thirty-three years will be— (1) It will have effected complete and final settlement with the Native owners, and all other interested parties, and be in a position to redeem all bonds issued by it out of the sinking funds created for that purpose. (2) It will, after paying all outgoings and effecting the settlement first mentioned, have made a profit of some £3,122 in each of the thirty-three years. (3) It will have cut out 930,000,000 log feet of totara, matai, rimu, and kahikatea, and will still have in hand 535,000,000 log feet thereof, having a royalty value of £802,000. It will also have in hand some 30,000,000 log feet of miro, which will be worth at least £15,000. (4) It will have constructed sixteen miles of road out of the proceeds of the sale of the timber. This road, as already pointed out, will serve at least 150,000 acres of land, of which half will belong to the Crown. Such are the material benefits which will accrue to the Crown, but, over and above all of them, it will have the final satisfaction of knowing that it has made fair and equitable provision for every one interested in the Tongariro Timber Co.'s undertaking. The question may arise as to how effect is going to be given to the proposals contained in my memorandum, assuming that they are adopted. The answer is that the company and its connections come to the House as suppliants —no more, and no less. It therefore rests with this Committee and the House to decide what they are to receive. That being the case, if the Committee and the House approve the proposals, all they have to do is insist that the company and its connections accept the provision made for them in the memorandum. Hon. Sir Apirana Ngata.] Your proposals in the memorandum are based on (1) what you describe as interference with rights, which is the basis of your claim in equity ; and (2) the assumption that the Crown will purchase ? —The Government is morally bound to purchase or do something of that sort. Assuming that the Crown will not purchase, what is to happen to all these claims ? —I would suggest that the Crown would not act so inequitably. What is to force the Crown to buy, if it is bad business ?—I have endeavoured to show that it is not bad business, but good business. Well, assuming that the Crown will not buy, what is to happen to these claims ? —As far as I am concerned, and I think I can speak for the Native owners, we want our land back, free of all encumbrances. My point is this : your claim is against the Crown for having interfered. Does not that claim still go on as a moral claim if the Crown does not buy ? —Yes, it does. Mr. Langstone.\ Goes on with the Crown ? —The fact that the Crown does not go on with the acquisition of the territory does not rid it of the moral obligation to settle the moral claims of the company and its connections. Hon. Sir Apirana Ngata.] Now come to the element of interference. The position was, under the 1908 agreement, that the Natives expected a low royalty, because at that time the construction of a railway was very much in their minds, and that was part of the consideration ? —Yes. Was not the first variation a matter of arrangement, in that the company, in 1910, varied as against itself the covenant as to royalties ?—Yes. It agreed to a lower amount for the initial years ?—Yes. The condition as to the railway was to have been fulfilled by 1913 ? —Yes. That covenant failed ? —Yes. But I have an idea that it was in 1915. The variation was made in 1910, when the company anticipated that it would be able to comply with the condition as to the railway by 1913 ? —Yes. Up to that time the Government had not, as you say, interfered ?—No. It had in one direction, and in a beneficial direction. It had granted the company a moratorium up to 1922. That was by the Act of 1915. That was interference against the interests of the Natives, and in favour of the company ?— Yes, the moratorium was. It was in favour of the company, but against the creditors. Parliament, in 1915, on the company's petition, which alleged difficulties created by the war, suspended any remedies till two years after the war. That provision ran out in 1920, and was subsequently extended to 1922 ? —The Order in Council was issued in 1921. Mr. Perry : I think the company claims that the moratorium still exists. Hon. Sir Apirana Ngata: It cannot very well substantiate that now, can it ? Mr. Perry : I have here a letter from Messrs. Findlay and Moir, solicitors to the Tongariro Timber Co., to the Minister of Native Affairs, dated the 29th January, 1930, which is as follows :— Acting under instructions from the Tongariro Timber Co., Ltd., we have been requested to bring under your notice the position and claims of the company and of its creditors as affected by the Act passed by Parliament during last session, known as the Native Land Amendment and Native Land Claims Adjustment Act, 1929, and under which the company has received from the President of the Aotea Maori Land Board a notice dated 15th November, 1929, of intended determination of its rights under its agreements of 1908 as subsequently modified by later deeds. The notice calls for the payment of arrears of advance royalties £26,562 10s., and the completion of the railway from Kakahi to the terminus forthwith, and while the company had arranged to comply with the money payment, the completion of the railway within six months of the service of the notice, as demanded, is physically impossible. Should the notice of intended forfeiture be proceeded with, questions will inevitably arise as to the claims of the shareholders of the company and of its creditors, as stated by you in your speech in Parliament on the Bill, and it is with the object of ascertaining your views and the attitude of the Administration in regard to these claims that we now bring the matter before you. If the Government decides to proceed in these steps for the unconditional determination of the rights of the company for the purpose of acquiring the property freed from such rights, the shareholders and creditors would undoubtedly have a grievance against the Government, and their claims would be strengthened by the fact that the Native owners have, as shown later, formally agreed to terms which provide for their protection. The position to be taken by the company and the nature of the steps to be taken by its directors are matters of grave concern to those interested, and the decision as to what course shall be adopted in respect to the steps now being taken under the above-mentioned Act of last session will to a great extent be dependent on the question of what

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