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Mr. Dargaville : Yes. When the Kauri Timber Company refused to pay us the £25,000 upon some legal point, they said it would have been ultra vires to have sold this bush or given a mortgage over it. We said, " Very well; let the matter be off altogether. We can sell our kauri elsewhere." They, decidedly to all appearance at first, assented to that, and we appointed a Mr. Matthews, who lives in this neighbourhood, to go to Australia, to his friends and connections in the timber trade there, to form a company and buy our forest. He went over, and met with a fair amount of success in Sydney in the first instance, and then he went to Melbourne, and was, I understand, doing well in the matter there, when the Kauri Timber Company in Melbourne wired over to their agents here to lodge a caveat, which had the effect of preventing our dealing with the forest any further; and Mr. Matthews's negotiations were brought to an abrupt termination. So the Kauri Timber Company would neither deal with the thing themselves nor advance us money, nor would they allow us to deal with anybody else in the matter. That, of course, left us completely stranded. On appeal to the Supreme Court the caveat was ordered to be removed. We then proposed to proceed against the timber company for damages. Some legal difficulties, however, intervened, and we did not make any headway in that direction. With reference to the prospects of the line, of course, any evidence that I may give on that point would be more a matter of opinion than of fact. The Chairman : Necessarily so. Mr. Dargaville: I have been engaged in business here for twenty years, and have been about the district pretty nearly the whole of that time, and I may say that I consider that the piece of country that this railway will tap is the gem of the whole country north of Auckland; but, owing to its inaccessibility through want of roads, people know very little about it so far. The kauri in the first instance would have given a very profitable traffic to the line, and we, the promoters of the line, relied upon a very good return from that trade alone. But the more important and permanent trade we relied upon was the settlement of the country north of the terminus of the line, between there and the head-waters of the Hokianga. Perhaps I might mention incidentally that the traffic of the line during the last three or four months has more than paid the working-expenses of it, even in its present unfinished state, and without hauling out any timber, and without the settlement of any land. The gum trade and trade incidental to the population that will always be found hanging about a piece of good country such as the head of the valley undoubtedly is, has proved sufficient to pay the whole of the wages, salaries, coal, and maintenance of the line for the last four months, and to make up deficiencies which arose previous to that. If the forest once be opened and the land in the district settled, I feel confident that it will be as profitable a piece of railway as there is in this or any other colony, as far as my experience goes. Had I the capital I would have no hesitation in taking the whole thing out of the hands of the shareholders now at the present time, so satisfied am I that it is a genuine, legitimate enterprise. Further than that, sir, I may perhaps be allowed to add that from the very inception of the thing the directors have behaved in an unselfish and public-spirited manner. They have not drawn a shilling of money in any shape or form ; they have drawn nothing in the way of promotion-money or of honorarium; nor, with one or two trifling exceptions, have they drawn anything for travelling-expenses. But, of course, you will be able to see all that on going into the accounts and books of the company. The Chairman : Yes, we discovered that when in Auckland. Mr. Dargaville : Mrs. Dargaville, who has a life-interest in the estate of Dargaville, and I have given a piece of land to the company for a station, and for purposes of the line generally, and for the station-manager's house, free of compensation. Ido not claim that that was altogether an unselfish act, because the establishment of a line of this kind would be an advantage to the rest of the estate ; but I only mention the fact. And I may say that nothing has been paid in the way of compensation for land taken for the line yet. Messrs. Nimmo and Tinne set up claims through their agents ; but the advantage conferred upon their property by the line was considered an equivalent for the land taken. There is a small piece of land, however, in respect of which the Natives will make some claim for compensation ; but proceeds of the sale of the debentures to the extent of two or three hundred pounds are reserved by the Government for that, and are considered sufficient to meet any claims the Natives may make. I do not know that there is anything else to add at present. If you should require further information, I would prefer that you should ask questions. 54. The Chairman.] To the Commissioners, the most obvious resource that would bring traffic to the railway is the kauri timber. I would like to ask this question, because it bears on the development of these bushes. Can you say of your own knowledge what general extent of kauri timber there is in this district to keep the mills going; because if these bushes are worked out, and the kauri getting far back, so as to become difficult of access, that would turn attention to the forests at the head of the railway ? —lt is notorious that the bulk of the kauri forests in this district have been worked out, and that what the Kauri Timber Company, which is the owner of most of the forests in this district, is doing now, is clearing up the remnants of scattered forests. They have no large bulk of timber in any particular locality that I know of except in the Kaihu Valley. They have now no such cheap or handy timber, because they have to go further back to get it out, it being, as I said before, the remnants of the bushes that are left. It appears to me as if they had taken advantage of the necessities of the railway company in order to extort terms from them, because when we made proposals to them they objected to the rates we proposed to charge, and said they could do very much better than that yet. They have been advised, to my own certain knowledge, by their own officers to take out certain timber from near the Kaihu Valley Railway; and rather than give the railway company the traffic, they have allowed the forest to remain untouched, and have scraped up timber in other directions, their object doubtless being to force us to take their timber out at a very much lower rate than the Government rate. The offers that we made to them were considerably lower than the Government standard rates at present for the haulage
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