29

1.-7 A

If the contract is determined by reason of the bankruptcy, &c, of the Contractors, their assignees or trustees may, within twelve months, repay to the Government any moneys expended, and enter into proper contracts with the Government for completing the railways and providing the plant, in which case the Government are to restore possession of the sections and plant taken possession of. If the Contractors make default in maintaining a railway or providing plant and keeping the same in good working order, or in properly working and using the railway, the Government may direct the necessary repairs to be done and plant supplied, and replace any plant worn out, and enter and use and work the railway, and the Contractors are to repay all moneys expended. If within six months the Government are recouped the moneys expended, the Contractors are to be reinstated. The laws and regulations of New Zealand are to be complied with and conformed to, as well as any by-laws which the Government may establish ; and the Contractors are to compensate parties injured by the negligence or wrongful act of the Contractors in making the railways or working the same. The contract is not to be assigned or sublet without the approval of the Government. If assigned to a company, such company are to enter into a formal contract with the Government for securing the due observance and performance of the stipulations of the contract. The Government are to have the right to appoint an ex offlcio director on the Board of the company, both in England and in the colony, with a right of veto at all proceedings of the Board, and only such charges for the direction and management of the company are to be allowed as the Government shall approve of. The company are to keep proper books, and the same are to be open to the inspection of the Government and its officers. In the event of the Government purchasing the railways they are to pay for the same in England within twelve months after the price is agreed upon er settled. The Government may retain out of any moneys in their hands belonging to the Contractors any sums due to the Government. All payments, except where otherwise expressed, are to be made in New Zealand. Any notices to the Contractors may be given to their agent in New Zealand, or, if there be no such agent, may be published in the Neiv Zealand Gazette. For the determination of such questions as may be referred to arbitration, the Government and the Contractors may either agree as to a single arbitrator, or each appoint one, and the two so appointed are to choose a third; but, if they cannot agree, the third is to be appointed by such one of the Governors of any of the Colonies of Australia or of the Colony of Tasmania as the Government of New Zealand may request to do so. The award of such three arbitrators, or any two of them, to be final. Having thus described those stipulations which are common to both contracts, I now proceed to point out those which apply only to each particular contract. The special provisions as regards No. 1 are as follows: — Before the 21st June, 1879, the Government are to intrust to the Contractors the making and providing of railways and plant, to cost £4,000,000, and the Contractors are to make and provide the same. The interest on capital employed during construction of a railway and in providing plant is to be estimated and added to the settled cost. The moneys deposited with the Colonial Treasurer for expenditure in New Zealand are not to bear interest. The police and other forces when proceeding on duty, and the public mails, are to be carried by the ordinary trains at 25 per cent, below ordinary fares and rates. In case of forfeiture of the railways, the Government are not to pay for the Contractors' working plant, &c, but the Government are to pay as follows: For any completed section which they may take possession of and its plant, the same sum as on purchase ; for any non-completed sections, such a sum as, with the sums paid on account of subdivision, will be equal to the sums deposited by the Contractors with the Colonial. Treasurer for expenditure in New Zealand, the Government retaining any unexpended moneys; and for plant in transitu or course of manufacture, the agreed cost thereof with all charges and expenses, but without any percentage for profit. All such payments to bo in Government debentures having thirty years to run, with interest at 5 per cent. The Governmeut are to grant to the Contractors such land, and so situate, as the Government think fit, at the rate of three-fourths of an acre per £1 of the cost of the railways and plant, one-fifth only of which land need be suitable for settlement and for settlers to take immediate possession of. Such portions of this one-fifth as may be required for immigrants are to be granted as required, and the residue in respect of each section of railway on the completion thereof. When a railway is decided upon, the lands out of which the grant is to be made are to be set apart, and the Government are to allow the Contractors, so far as they can conveniently, to occupy the land in the meantime. From the opening of a railway until the expiration of forty years, or the purchase thereof by the Government at an earlier period, and until payment of the purchase-money, the Government are to pay to the Contractors in England such a sum as, with the net receipts from all the railways in the Contractors' hands then open for traffic, after defraying all working expenses, maintenance, and other out-goings properly chargeable against revenue, will give the Contractors a dividend at the rate of £5 ss. per cent, per annum on the aggregate amount of the total cost of all the same railways and their plant, as appearing by the capital acounts of the respective railways, after deducting all sums paid by the Government for subvention, within four months after the examination and approval by the Government of the half-yearly revenue accounts. When such net receipts are sufficient to pay a dividend exceeding 8 per cent, on the aggregate cost of all the said railways and plant, after deducting the subvention, the excess thereof is to be applied to recoup any advances made by the Government under their guarantee exceeding interest at the rate of £5 ss. per cent, per annum, with interest at 5\ per cent., and subject thereto, is to be divided equally between the Government and the Contractors. The Government are to pay to the Contractors in part payment of the purchase-moneys a subvention equal to one-third of the cost of the railway and plant as follows: When any moneys are paid out to the Contractors from the funds deposited by them with the Colonial Treasurer, a sura