E.—7a,

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of the Port Chalmers Railway to take over the undertaking completed for the sum of £150,000. I beg to thank you for this communication, and shall be glad if your Honor will communicate the answer of the promoters as soon as possible. I have, &c, His Honor the Superintendent of Otago. John Hall.

No. 5. The Hon. Mr. Bathgate to Messrs. Proudfoot, Oliver, and Ulph. Gentlemen, — Dunedin, 11th February, 1873. I am authorized by the General Government to make an offer to purchase, on behalf of Her Majesty, the Dunedin and Port Chalmers Eailway, with all the land, plant, and works of every kind appertaining thereto, including the rolling stock, at the sum of £150,000, free of all encumbrances, or at £50,000, the Government taking the liability of the debentures, amounting to £100,000, subject to your granting a good and valid conveyance of the same, when the price will be payable. This offer is made subject also to the proper completion of the wharf or jetty at Port Chalmers, and to the line, works, and plant generally being in sufficient and good working order. This offer is made without prejudice. I have, &c, Messrs. Proudfoot, Oliver, and Ulph, Dunedin. John Bathgate.

No. 6. Messrs. Proudfoot, Oliver, and Ulph, to the Hon. Mr. Bathgate. Sib,— Dunedin, 13th February, 1873. We have the honor to acknowledge receipt of your letter of 10th instant, offering, without prejudice, £50,000 for the purchase of the Dunedin and Port Chalmers Railway over and above the £100,000 worth of debentures issued by the Company. Whilst we are quite willing to treat with the Government for the sale of the line, we must decline altogether the offer now made, as it is utterly inadequate to the value of the concern. We have, &c, Proudfoot, Oliver, and Ulph. The Hon. John Bathgate, Minister of Justice.

No. 7. His Honor the Superintendent of Otago to the Hon. the Colonial Secretary. Sir, — Superintendent's Office, Dunedin, 2nd March, 1872. Referring to various conversations which I have had with members of the Government on the subject of the purchase, on behalf of the Province, of the Dunedin and Port Chalmers Railway, I have now formally to call your attention to the expediency of at once entering into arrangements for purchasing the line. There can, I think, be no question but the line must sooner or later be taken over by the Government, and that a saving of many thousands of pounds would be effected by taking it over now. lam of course aware that nothing definite could be done without the sanction of the Legislature; at the same time, preliminary arrangements might be made. The agreement with the promoters is that they are compelled to sell at the expiration of five years, at the option of the Government, at the then value. Could the Provincial Government have anticipated the action of the Colonial Legislature with respect to railways, and the comparatively favourable terms upon which such works are being constructed by the Colony, no doubt the railway in question would have been allowed to remain in abeyance. As it is, however, the arrangement for its construction was the best that could have been made at the time. It is an undertaking which will undoubtedly yield a very handsome profit to the promoters —a profit which is certain to increase from year to year. It is surmised that negotiations are pending in England for the purchase of the undertaking, on terms very favourable to the promoters. Probably on the arrival here shortly of Mr. Oliver, one of the promoters, now on his way from England, I shall have more definite information as to this. In the meantime lam persuaded that in the public interest it is in every respect desirable that the Government itself should be the purchaser at first hand. I have, &c, The Hon. the Colonial Secretary, Wellington. J. Macandrew.

No. 8. His Honor the Superintendent of Otago to the Hon. Mr. Richardson. (Telegram.) Dunedin, 4th April, 1873. The Superintendent of Otago hereby assents to assignment of the Port Chalmers Railway agreement to the Railway Company, and by them to the Mercantile Loan Company, and also