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anxious to have provision made for the deficiency of endowment, as steps were now being taken by them to make certain financial arrangements, and which would be greatly facilitated if it could be announced that the endowments were made up to 30 per cent., and not to remain as they now are, only equal to 19 per cent. Mr. Levin pointed out that, originally, the allocation included land amounting to over £21,000 in the West County of the Wairarapa, but which the directors agreed to forego their claim to, at the request of the Government; and that at the time that was done it was understood there were certain Native blocks under negotiation for purchase by the Government, and which were of sufficient area to provide for the deficiency of allocation. Mr. Levin referred to the fact that tho last clause of the 10th paragraph distinctly showed an agreement on the part of the Government to give the company the 30 per cent, land endowment, as provided in the Eailways Construction and Land Act. He detailed the circumstances which led to the 11th clause being inserted into the contract, arguing that it was there because of the recognised moral right of the company to have the deficiency provided for. The Minister admitted that, to a certain extent, there was a claim, and agreed that if the directors would put in writing what they wanted he would undertake to put it before Cabinet for their consideration. The deputation then withdrew.

The Secretary, Wellington and Manawatu Eailway Company (Limited), to the Hon. the Minister for Public Works. Sm, — 22nd September, 1882. Eeferring to the interview accorded by you to the directors, I have now the honour, by instruction of the Board, to state that they are desirous, for the purpose of completing certain financial arrangements which will enable them to provide for the early construction of their line of railway, of having provision made for making up the deficiency of endowment of lands referred to in clause 11 of the company's contract with the Government, amounting to the sum of £29,805. Permit me to point out that the last paragraph of clause 10 clearly indicates the company's claim, and which, for convenience of reference, I take the liberty to quote : " And whereas the land shown by the red border on the map hereunto annexed and marked C, taken at the aggregate of the values set forth in the second schedule hereto, is insufficient to provide the amount of endowment in land agreed to be granted to the company under the powers contained in Part V. of the said Act." I am requested to enclose copy of a letter, dated the 13th. February, addressed by J. B. Nathan, Esq., chairman of the company, to the Hon. the Colonial Treasurer, at that time the only member of the Cabinet in Wellington. The statement in Mr. Nathan's letter relative to the amount of deficiency of tho endowments of land and the suggestion of the manner in which it could be made up were the reasons for the clause No. 11 being added to the contract. 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 purchase. The blocks referred to were the Aorangi, Tuwhakatupua, 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. I am 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 tho schedule of the contract was the clearly implied understanding that diligence would bo used for the completing of the negotiations for the purchase of the blocks above referred to, so that the deficiency would bo provided for under clause 11 of the contract. The directors, I am instructed to say, would be greatly obliged by an early consideration, on the part of yourself and the Cabinet, of the points raised, as the success of the financial operations now in course of negotiation, and the consequent faithful discharge of the contract on the part of the company, depend in a large measure on the favourable reply I hope to receive to this communication. I have, &c, The Hon. the Minister for Public Works. Jas. Wallace, Secretary.

The Under-Secretary, Public Works Department, to the Chairman, Wellington and Manawatu Eailway Company (Limited). Sin,— Public Works Office, Wellington, 18th October, 1882. Referring to your letter of the 22nd ultimo, I am now directed by the Minister for Public Works to recall to the recollection of the Board of Directors of the company that on the 10th February, after the land within fifteen miles of the line of the railway on the Wairarapa side of the Tararua Bange had been excluded from the endowment, the Government replied as follows to an application made to it by the company for money grant of £26,430, being the then estimated difference between the value of the proposed endowment and 30 per cent, of the cost of the railway, upon the assumption that the railway would be 82 miles long : " Government Offices, Wellington, 10th February, 1882. Sir, —I have the honour to inform you that the representations recently made to the Minister acting for the Minister for Public Works by the directors of the WelliugtonManawatu Eailway Company (Limited), have been submitted to the Government. The application by the directors that the Government will insert in the contract a covenant to recommend to Parliament a grant-in-aid of £26,430, the amount of the difference between the valuation of the land available as an endowment to the company and 30 per cent, of the estimated cost of the railway line, has been carefully considered, and the Government regret that they are unable to see their way to agree to insert in the contract such a covenant. —I have, &c, H. A. Atkinson (in the absence of the Premier). The Chairman, Wellington and Manawatu Eailway Company (Limited)." It was on the receipt of the above that the chairman of the company addressed to the Government the letter of the 13th February, a copy of which is appended to your letter now under considera--s—l. sb.