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although broken and hilly, would undoubtedly grow corn very well. But the chief advantage in constructing any lino to connect the interior plains with the coast by way of Palmerston is this: that all the traffic which exists from the interior to Dunedin now comes through the valley, and, if the railway were made up it, every five miles that would be made of that line would be productive of traffic immediately, and be at once remunerative. Therefore whatever money was spent in making a railway by that way would very quickly bring in revenue. I am obliged to say that, looking to the evidence which Mr. Blair's report gives as to the character of the gradients, and the altitude to surmount, in tho line by Strath Taieri, I should say that, in an engineering point of view, there would be no comparison between that and the Shag Valley line ; the Strath Taieri line would certainly be best. The disadvantage to the State of making that line, as compared with the Shag Valley line, would be, that the exact reverse would happen of the advantage I was pointing out in the Shag Valley case : for, in my opinion, the line would have to be made all the way from Outram to the Upper Taieri Lake in the plain, before it would tap any part of the traffic that comes down from the interior. On the other hand, the land that would be made available for settlement by the opening up of the Strath Taieri country is undoubtedly the best and the greatest in extent. I should say that the settlers in the valley are very anxious to have the railway made up to the point I was mentioning to you (Waihemo) where land is cultivated; but the people in Palmerston and immediately around, so far as I have had any means of knowing their minds, are not only not particularly anxious for the line from Palmerston, but rather averse to it. 209. That is, supposing it only goes up as far as your place, and does not go into the Maniototo Plains? —Yes. It is a remarkable thing that at a meeting which took place at Palmerston, where I think Mr. De Lautour, one of the members of the Committee, was present, there appeared to be a great amount of enthusiasm among the settlers for the line ; but, when we came to try to get the settlers together to press the matter, they one by one seemed to retreat from any action; and I feel very uncertain now as to whether the Palmerston people really would care to have the railway made into the interior that way. lam persuaded, for my own part, that if that is their opinion it is very foolish, because, both as regards the interests of the State and their own, it would be far better to have the line made that way : and if the Committee want to know what my opinion is as between the Strath Taieri and Shag Valley lines, I should say that it is best for the State to make the Shag Valley line, because it would immediately produce a revenue ; but I speak in the matter against what is my own pernonal interest, for it is not my interest as a squatter for the railway to be made that way. 210. AYe have got so far as to satisfy us that up to your place there would be no difficulty about making a line, that it would be quite easy of construction, and would be the most payable? —There is not the slightest doubt about that. 211. You are quite satisfied that the land from Palmerston up as far as your place is level land ?— Ido not say it is level as far as my place, but as far as Waihemo it is; and there is no real difficulty between that and my station, which is some six miles farther on. 212. How many miles would that be altogether?— About eighteen miles from Palmerston to my place, and the line to that point would be immediately payable and productive. The land is occupied by well-to-do farmers for a distance of twelve miles from Palmerston: for six miles farther up it is my land, and there is not much cultivation yet: from there up the valley it is Crown land. 213. How far is it from your own station and the eighteen miles we have got to, to the Maniototo Plain at the Kyeburn or Malloch's hotel? —It is about twenty-two miles altogether: of this about sixteen miles are hilly, and after that there is perhaps six miles of tolerably level ground on tho Kyeburn side; some of this last part is very good land. 214. Now, that gets into the same plain as Koute No. 4 gets into at another point ? —Yes. 215. Where does Eoute No. 4 get into the Maniototo Plain ?—At the Upper Taieri Lake. 216. Then from there to Cromwell the line opens up exactly the same country as the other line would ? —Exactly. 217. The only difference in opening up Crown land for settlement would be between the Maniototo Plain and Dunedin, and Maniototo Plain and your station?—-Yes. 218. So that the whole of the land that has been stated in evidence by Mr. McKerrow, after you get on the Maniototo Plain, would be opened up by this line the same as the other ?—Exactly. 219. Supposing we take these sixteen miles construction, where it would open up Crown lands, as against this construction down here to the West Taieri—a distance of forty miles from Palmerston to Kyeburn—eighteen miles of that would be through land already sold, and the other twenty-two miles would be to open up land for settlement ? —Yes. 220. And as to that twenty-two miles as compared with twenty-two miles there, what is your opinion of the land it would open up for settlement? —I think there is no doubt whatever there is more available agricultural land open for settlement by the Strath Taieri than by the Shag Valley route, but I doubt whether there is any land on the Strath Taieri route so good in quality as some 4,000 or 5,000 acres by the other line, between my station and Morrison's. The character of the land there is excellent; it is very rich soil, though it is all hilly and ridgy land. As regards land fit for settlement, there is no comparison between the quantity in the Strath Taieri line and the quantity in Shag Valley, though I think there are 5,000 acres in the Shag Valley line better than any I know on the Strath Taieri. I speak of the character of the soil; as regards adaptability for settlement, I still think the Strath Taieri line is the best. 221. What I want to establish is, that that line goes up through good agricultural country aud would be immediately productive, whereas this goes through Government land where there is no settlement, where the line would be very bad of construction ; but after you get to the Strath Taieri there is good land, and it is easy of construction ? —I could not say that I agree with you that the Shag Valley line is difficult of construction. My opinion is not worth anything on an engineering point, but I should be disposed to place a great deal of reliance upon Mr. Blair's view. The altitude to be surmounted by Strath Taieri is easy ; there is no altitude to be surmounted that exceeds 700 feet, and therefore I assume the engineering difficulties are much less. But upon that my opinion is not worth having.

Sir F. D. Sell.

sth Sept., 1877.