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him, and he said then that Mr. Nathan had given him a wrong impression as to the rights of the company for the purchase of Horowhenua ; that it had not been discussedby the Cabinet, and that he was unable to find funds from the particular fund that he had in his mind when the promise was made to Mr. Nathan that he would give Mr. Ballanoe an order for £25,000 for the purchase, and that all he would consent to would be that, if any purchase was made, a full definition of the company's claims and the land that might be applied should be made before he would agree to it. That was the result of the interview ; but he admitted to me that he had promised to Mr. Nathan to find £25,000 in the way that I have described. 521. Did you say he admitted'that lie had promised to Mr. Nathan that he would find the £25,000 ?—Yes. , 522. For the purpose of purchasing Horowhenua, with a view to the company s claim being made up?— Yes. He said, further, that, until it was before the Cabinet and the company's claims had been thoroughly examined and defined, he could not agree to what he had expressed himself as favourable to before. 523. Then, do I understand that throughout these negotiations Sir Julius Vogel admitted the right of the company to have this allocation made up, and, in the first instance, expressed his intention of allowing a sum for the purchase, which would be devoted to that purpose ? —Yes. 524. I believe Mr. Nathan is now in England?— Yes. 525. "Was this taken from him?— That was taken from information he gave me. 526. Now, it is here stated that Mr. Ballance said he was willing and ready to buy Horowhenua if he had the money; and, if the Treasurer would advance a sufficient sum, he would buy it forthwith P—That is what he said to Mr. Nathan and myself. 527. In any interview you had with Mr. Ballance did he ever dispute the existence of the understanding already referred to between the Government and the Crown that they should use diligence in purchasing lands to make up the allocation ?—He did not admit that the Government he was connected with was responsible; but he did not dispute that that was the arrangement between the company and the Government that had made the contract. 528. Hon. Mr. Ballance.} I would like to ask Mr. Wallace one or two questions. I may say before doing so that, on the whole, I think that the evidence that has been given by him has been accurate and fair. I know, as regards the impressions that he has formed, that he has formed his own impressions and inferences, and I will say nothing about that. I have no doubt he has drawn them from the best of his ability, and I may only state, as far as the facts are concerned, that he has been very accurate. With regard to the conversation he and Mr. Nathan had with myself, and that Mr. Nathan had with Sir Julius Vogel, Mr. Wallace has stated that Sir Julius Vogel told Mr. Nathan that he had given him a wrong impression of the circumstances. Now, what circumstances does Mr. Wallace refer to ?—What I understood Mr. Nathan to say was that Sir Julius Vogel had expressed himself as favourable to the company's claim being recognised, and because of that impression he was agreeable to find you the money to make the purchase, and that the lands ought to be purchased. When he came back he said that what Mr. Nathan had said to him left a wrong impression. What he meant by that I cannot say. I was not present at the interview. 529. But you must have heard from Mr. Nathan as to what had taken place? —Mr. Nathan explained what the company's claims were, and the clauses of the contract, and I presume that Sir Julius recognised that these claims were correct, and so on. 530. Yes, it is quite true that Sir Julius Vogel did recognise that, on the statement of Mr. Nathan the company, was entitled to the allocation, and agreed to advance the money. When Sir Julius Vogel came back from Christchurch Mr. Nathan went to him ?—No; I went to him by direction of Mr. Nathan. 531. And then he told you that I found he had given him a wrong impression of the circumstances, and therefore he could not advance the money now. Did Sir Julius Vogel say what the wrong impression was, or the circumstances ? —No ; he did not tell me what the circumstances were. 532. Did he mean to say that Mr. Nathan had in any way deceived him by the statement he had made?—No; he did not say that.' 533. Then you have referred to a telephonic communication between Sir Julius Vogel and myself in regard to this providing of the money? —That was what Mr. Nathan reported to me, that whilst he was in Sir Julius Vogel's office he telephoned to Mr. Ballance to meet him at the steamer, and that he would find the money, and give him an order on the Treasury, as far as I can recollect. 534. Did not Mr. Nathan tell you at the same time that I had stated that the matter had to be referred to the Cabinet, and that it must be considered ? —He did not say that, and I may say that Sir Julius Vogel said it was not necessary to refer it to the Cabinet; that he had the power, and could take it from some particular fund, which I think was mentioned. 535. Did he tell you that I expressed my opinion that the matter would have to be decided by the Cabinet ?—Yes ; but Sir Julius Vogel said that you were wrong. 536. Did Mr. Nathan tell you that the matter had been referred to the Cabinet, and that the Cabinet had come to the conclusion not to buy the land ? —Yes ; that is referred to in my own correspondence, and the company was recommended to apply to Parliament. 537. Now you said that you would have to supplement the interest which would be required, from the sale of land Mr. Travers : Supplement the annual expenditure—not necessarily the interest. 538. Mr. Ballance.] I mean to say you would have to make up a deficiency in revenue from the sales of land ?—That might be for the first year; we cannot tell till the results of the year are known. 539. Did not your last balance-sheet show that you were paying about 7 per cent, per annum ? —No; about 5 per cent, per annum ; that was upon our limited experience of six months, which included some of the best portions of the year.