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243. Mr. Larnach.] Would the Board be entitled to 25 per cent, on all lands sold under the deferred-payment system ?—Yes. 244. Then, why should the sale of land in this way reduce the income of the Board ?—Because the instalments come in so slowly. 245. But the Government is a trustee for the amount ?—Yes, so far ; but what we want is the actual money. 246. It is true that only a small portion of the value is paid of the purchase-money, but does not the rest remain to the credit of the Board as between the Government and the Board ?—The Board gets nothing until the settlers actually pay the amount. If it were otherwise this difficulty would not have arisen, but the difference is this : We will say that the Government sells an acre of land for £4 cash; of that the Board would receive £1 down at once ; whereas, if the land were sold on deferred payment, all that the settler pays is one-tenth every year, and the Harbour Board, therefore, would only get 2s. 247. But, as the Board is entitled to a quarter of the price, it appears to me that it should make little difference to the Board whether it gets the money immediately or hereafter, as between the Government and the Board. You are entitled, whether the Government sells the land for cash or on deferred payment, to 25 per cent ?—lf the Government would give the 25 per cent, to the Board forthwith nothing more would be asked for. But the Board does not get the money, and the consequence is that the rate has had to be imposed. 248. I understand from you that it is only a question of time ; it does not militate against the claim of the Board getting its 25 per cent. —this deferred-payment sale ?—No ; the Board will get it, unless the land on which deferred payments have been capitalised become turned into perpetual leasehold. 249. Is not the deferred-payment system only a temporary inconvenience to the Board?—lt is an enormous loss of interest as well. If the Board received its share at once, and the money were placed on deposit, it would be receiving large sums for interest, and the capital would be available also for the purpose of meeting the debentures ; whereas now it is not so. This is a great grievance. 250. The Chairman.] It seems to me that the difficulty is arising more in respect to perpetuallease lands than deferred payments ; because, as regards deferred-payment lands, the instalments are 10 per cent., and consequently it would only take ten years to get tho whole proportion; but in the case of perpetual leases the Board only get a quarter of the 5 per cent, per annum ? —Yes ; but I want to point out this, as regards the deferred-payment system: the capitalisation system has been introduced, which enables deferred-payment settlers to capitalise, and pay 5 per cent. on the sum so arrived at, and the Board comes out worse therefore under the perpetual-leasehold system. 251. Mr. Tanner.] There seems to me to be two grievances—one of the Board and the other of the ratepayers. It does not seem to me that your evidence has succeeded in establishing a grievance on the part of the Board. I think I understand you to say that, supposing an acre of land sold for £4, the Board would have got £1 under the direct-sale system, and this would have been deposited at 5 per cent, and yielded Is. in the pound; under the deferred-payment system the Government gets only Bs. a year, of which the Board gets one-fourth, or 2s. Is not the Board, then, in a better position under the deferred-payment system, under which it receives the 2s. ?—No; because it still, after getting 5 per cent, interest, has the £1 capital at its back ; and, more than this, I lay particular stress on the fact that the system has not remained pure and simple. If it had remained so there would not have been this trouble; but these payments have been still further capitalised of late years, and bring in a mere nominal sum. 252. Mr. Stuart-Menteath.] But in any case we understand that even when put into the bank the money not only yields interest, but the capital sum is there to make up the payment of interest ?—Precisely. 253. Mr. Tanner.] How could you use the money if it was deposited at interest ? You could not utilise it until the end of the time for which it was deposited ?—We used to deposit it at fixed terms; it is a mere matter of financing. But what I want to point out to the Committee is that if the Board had £100,000 capital it would bring in £5,000 a year interest. Well, that would not be enough to pay the whole of the interest to the bondholders, but the Board could draw on the capital sum for the difference that was needed. But, in all probability, the Board would not require to do that, because land would still be sold annually, and, in addition to the interest of money on deposit, fresh land revenue would be constantly coming in to the Board, and it would, in all probability, not have to draw on the capital sum at all to make up the difference. 254. Two shillings a year for ten years would make £1 ? —Yes; but I want you to bear in mind the capitalisation question. I have not worked out the figures ; but if you do so I think you will find that the Board is very much worse off under the capitalisation than under the leasehold system. As to the question of raising the rates of imports at New Plymouth and Waitara, I would like to impress on the Committee that, if this is done, certainly Patea ought not to be allowed to import goods at a low rate. The three harbours are within a small compass, and are connected by ■rail, and I have considerable doubts as to whether it would be at all fair to raise the charges at New Plymouth and Waitara, and allow them to remain at a low rate at Patea. It would be handicapping the two ports unfairly, and throwing a lot of trade into Patea; and the consequent result would be nil as far as increasing harbour revenue at New Plymouth is concerned. I want the Committee to bear this other fact in mind : the Board has not enough funds to keep faith with the bondholders. 255. But you have funds enough under a rate ?—No; we are rating now up to the full limit, and this is not sufficient: there is about £4,000 a year short after the imposition of the full rate ; and there is no doubt that it is the alteration in the system of the disposal of the land, and the

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