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23. Mr. Shaw.] Is not this practically another way of the contractor getting his money quicker; otherwise he would have to wait for it till the contract was finished ?—Not if there was the money to pay him. 24. But having money to pay him is not a very common state of things, is it ?—The existing railways, as the honourable member knows, are obliged to pay cash ; but, then, they have got a security ; they have got a net revenue, which is liable. 25. Take poor countries who have not much capital: do you not think this system will aid in some measure in the construction of railways in them ?—I think it has this effect: it appears tp aid. You get a branch railway made by a contractor in this way; he puts 40 per cent, on for extra profit; he adds also this interest: there is no competition. This very Metropolitan District Kailway cost 30 or 40 per cent, more than it ought to have done. Though it may give a little artificial stimulus, practically, when the thing breaks down, it operates as a great discouragement. But for this system of no competition, and of payment of interest by the contractors, in my opinion you would have had long since the Inner Circle completed. It was the awful damper put upon this underground enterprise, not on its merits, but because of the failure of the Metropolitan and the Metropolitan District, that prevented your getting that circle completed years ago. 26. The Chairman.] Did you believe that the decisions of the Courts will put an end to those things?— Certainly. It cannot be done now unless Parliament leaves it alone. If you read the judgment of the Master of the Eolls, it is a masterly summing-up of the case. 27. Mr. Brand.] Will you point out the clause in the Act of 1867 authorizing companies to issue capital at a discount, in the way you stated just now ?—lt is clause 27, under the heading " Share Capital," and it is as follows : " Section twenty-one of ' The Companies Clauses Act, 1863,' shall, with respect to any special Act of a company incorporating Part 11. of that Act, whether passed or to be passed [this was ex post facto; it was really to meet the Brighton case ; they paid their debts very honourably by issuing stock at a discount], be read and have effect as if the following words, that is to say, ' but so that not less than the full nominal amount of any share or portion of stock be payable or paid in respect thereof,' had not been inserted in that section." 28. Mr. Salt.] I think you said that until lately it was the impression that an existing railway might raise a capital sum, say of £10,000, and pay interest during construction ?—No ; debit capital with it, not pay it to the shareholders. It is about thirteen or fourteen years since the case in which it was finally decided. 29. So that a capital of £10,000 would form a capital of £10,500 ?—lt would. 30. Now, is there very much difference, except as a matter of bookkeeping, between making £10,000 into £10,500 and reducing £10,000 to £9,500?—1 think so. I think it is all the difference between £10,000 and £9,500. The actual cash in the one case is intact, and in the other it is not. 31. When you say it was the general impression that that might be done by existing companies, do you mean that it was the general impression amongst the railway world or the legal world ?—I think both ; but, as sometimes the most obvious things are overlooked, perhaps it was more for want of strictly looking into the law. 32. Now, I have here a list of railway companies that have proposed clauses which would practically do away with the Standing Order 167. Would it be fair to ask you which of these Bills would come under your suggested possible exemption, that would illustrate your view ?—I do not think that any would, except the Metropolitan District Bill. It is the only existing company, so far as I know, to which the remark would apply. Ido not know what the Banff, Buckie, and Elgin Coast is, but the Metropolitan District Railway is a railway earning a net revenue; and supposing that the Metropolitan District shareholders wished, if they undertake a new work, to add to their capital account the interest upon the dead outlay, I for one should not think it would be the best thing, but I could not give anything but a mere conservative reason against that. 33. Then, to make it clear, you would not see any great objection in the case of the Metropolitan District, which stands No. 8 on this list, and which proposes to raise £1,250,000, adding to that sum a sum sufficient to pay a certain interest during construction ?—No, I should see no objection to it, subject to what I have already said, as a matter of prudence : that is all. 34. Now, as a matter of detail, would you propose any particular plan of making it clear to investors that this was the process under which the investments would be made ?—lf the Standing Order should be altered—keeping to the case you have referred to—so as to enable the Metropolitan District Eailway, which is a railway with a growing income, to charge, as apparently they wish to charge, interest upon the dead capital—this £1,250,000, which is wanted for their half of the completion of the inner circle —under the special circumstances of that case I think it should merely be shown fairly on the face of the accounts : that is all. Ido not mean at all to say that there have not been cases where, by special enactment, some works have been expedited that perhaps otherwise would have been retarded. There just comes into my mind the case of the Great Eastern Eailway, and I should have mentioned that in answer to the honourable member for Cork. The Great Eastern Company undertook immense liabilities to build a city terminus. They were in a very bad financial position at the time, and by conference with Lord Eedesdale and with the Chairman of Committees, and with the sanction of Parliament, were permitted to charge half the interest upon this great outlay, until it was finished, to capital. There is no doubt that that was a relief to the Great Eastern Company, and I have no doubt that it might be a relief to the Metropolitan District Company if they, being, as the Great Eastern Company were, a dividend-earning or a net-profit-earning company, were permitted to do this as an act of grace. But I think it should be an act of grace : it should be distinctly shown upon the face of the Act of Parliament, and the operation should be distinctly traceable upon the face of the accounts. 35. For what length of time would you permit such interest to be charged?—l think there should be a limit of time. That would depend, of bourse, upon the time the work would be likely to take. Take this very case : I suppose it will be perhaps two years before the whole of this great, 2—B. 12.