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per mile. I was in England for some months the year before this, and our creditors in England never have had a single doubt in the matter. They lent the money on the good faith of this land being allocated. Mr. Travers asked Mr. Levin, in Question 369, " Was it not a fact that representations were made that the Government would, within five years, be in a position to carry it out?" Mr. Levin replied, "I have said before that the understanding was at the time the contract was made that the Government would use all due diligence. There is, in my mind, no doubt about it." Now, Sir, when you find that the gentleman representing the Company and the Premier and the Colonial Treasurer all understood it in the same way surely there can be no longer any question about the matter. But, further, in the correspondence in the Appendix, page 25, the secretary to the Company, in writing to the Minister for Public Works on the 22nd September, 1882, says, " Moreover, the suggestion was based on the knowledge that there were certain blocks of Native land within the area of allocation under Proclamation on which the Government had made advances with a view to purchaso. The blocks referred to were the Aorangi, Tuwhakatapua, and Horowhenua. It was known to the directors at that time that the Native owners of these blocks were favourable to the disposing of them. This information was laid before you by telegram, and also repeated by the chairman at several interviews with the Colonial Treasurer and myself, iam also requested to urge that the reason why the directors waived their claim to the lands allocated and valued in the Forty-mile Bush being included in the schedule of the contract was the clearly implied understanding that diligence would be used for the completing of the negotiations for the purchase of the blocks above referred to, so that the deficiency would be provided for under clause 11 of the contract." The reply to that is the last paragraph of the next letter, dated the 18th October, 1882, '' The Minister directs me to add that he submitted to the Cabinet the inquiry of the Company as to whether the Government were continuing their efforts to acquire lands within the prescribed limits, and especially the blocks named in your letter, and that he is authorised to mention that the Hon. the Native Minister is endeavouring to acquire these blocks." Then, also, you have the letter, on page 27 of the Appendix, of the Bth December, 1882, in which Mr. Gill, by direction of the Colonial Treasurer, in reply to a statement by the Company that Mr. Fraser is going to interfere with the purchaso of the lands, says, " That the Government notice with regret the threatened opposition to the purchase of these blocks of land. In a letter addressed to you by Mr. A. Macdonald, an officer of your Company, copy of which was forwarded to the Government, Mr. Macdonald considers that the Tuwhakatupua and Horowhenua Blocks can now be purchased without much difficulty. You are aware that hitherto all attempts to complete the purchase of these lands have failed, owing to the want of agreement among the grantees. Instructions will be at once given to Mr. Booth to again meet the Native owners of these two blocks of land, and endeavour to come to some arrangement by which they can be acquired." Thus we see that in 1882 the Government, in answer to letters from the Company, promise to take these steps for the purpose of carrying out their engagement; and on page 28 of the Appendix, in a letter from the Secretary to the Cabinet to the chairman of the Company, dated the 21st February, 1883, it is stated that, "In accordance with his promise to a recent deputation of directors of the Wellington and Manawatu Railway Company, Limited, he (Major Atkinson) has communicated with the Native Minister respecting the appointment of a fresh landpurchase agent for the Manawatu District, and that he finds it to be Mr. Bryee's intention to make such an appointment as soon as some necessary arrangements can be completed." Now, can there be any doubt, in the face of Sir John Hall's and Major Atkinson's evidence, supported by Mr. Levin's view, and borne out by the correspondence of 1882, that the engagement expressed in clause 11 was an engagement to acquire the land as speedily as possible. I wish to bring at once to the minds of the Committee the fact that the Hon. Mr. Ballance misunderstood the engagement intended to bo expressed in this contract. I think the whole difficulty has arisen from Mr. Ballance's misunderstanding this, a misunderstanding which arose from the fact that there was nothing to show that the engagement was more than was expressed in the literal language of clause 11. This will be seen from Mr. Ballance's evidence, on page 11. In Question 173, I asked him as to his approval of Mr. Wallace's evidence, and, in my question, I said, " Now, in that minute this expression is used by Mr. Wallace." Mr. Ballance, in reply, said that as he read the 11th clause of the contract there was no obligation on the part of the Government to use diligence in acquiring the Native lands within tho time named. To his mind it seemed that if in regular course any lands should be bought within the time the Company should have the power to claim the right of selection; but he did not think it was the present duty of the Government to acquire and allow what lands were under Proclamation in the district to fall into the hands of the Company, the more especially as his policy in dealing with the lands of the people was very different from that of the Company. " Can you remember making use of expressions of that kind." In reply to that, Mr. Ballance said, " I cannot say that I remember the conversation, but I have no doubt it is accurate. I have no doubt that it is correct." I say, Sir, there is clear proof of a misunderstanding on Mr. Balance's part of tho engagement, because you cannot doubt the accuracy of the view taken by Sir John Hall and Major Atkinson, who made the- contract. You cannot doubt that the engagement was as they say it was, and Mr. Ballance has been misled by referring only to the language of clause 11, and by not knowing what had taken place. Therefore I think the Committee will have no hesitation in coming to the conclusion that the difficulty which has been occasioned has really arisen from Mr. Ballance not being aware that his predecessors had entered into an honourable engagement of the kind. 1 do not believe that any Government, and certainly not tho Government of which Mr. Ballance was a member, would have felt themselves otherwise than bound by any honourable engagement entered into by their predecessors, and if Mr. Ballance had known beforehand the view which Sir John Hall and Major Atkinson took of the engagement they had entered into he would have agreed to be bound by it—that is to say, he would not have referred to the literal meaning, and said there was no absolute necessity to use diligence to purchase lands within the time. Mr. Bryce explained his policy, and you will remember that Mr. Bryce rejoined the Hall Government after the making of this contract. Mr. Bryce says that his policy was to