3

D.—4

Annual guarantee at 3f per cent, on this amount, £101 500. The value of the land grant, the whole of which it is proposed the company should surrender, is guaranteed by the Government to be worth £984,000. Annual charges for interest on capital when the whole line is open for traffic, assuming that the East and West line is finished first, and half the debentures paid off before the completion of the Nelson section: — Debenture-interest on £372,500, at 5 per cent. £18,625 Ordinary-share capital, £2 900,000, at 3-|- per cent. 101,500 £120 125 Estimated net revenue available for interest:— East and West line £60,000 Eeefton line .. 10,000 Nelson section, say .. .. ... .. 30,000 £100,000 Balance required from Government to meet interest charges per annum until traffic develops' £20,125. Annual charges for interest when the whole line from east and west and Nelson is opened for traffic, and all the debentures have been redeemed by the Government out of land sales:— Ordinary share interest per cent, on £2,900,000 £101 SCO Estimated revenue available for interest, not allowing for any further development of traffic on East and West and Eeefton lines beyond that estimated when first opened : — East and West line £60 000 Eeefton line .. 10,000 Nelson line .. 30,000 £100,000 Balance required from Government to meet guaranteed-interest charges, £1,500.

Enclosure 3 in No. 1 Statement C. From information received from London it has been ascertained that the cost of financing £2,900,000 with a Government guarantee of interest as set out, and raising capital sufficient to finish the line without a guarantee of interest, will make a difference of £60,000 in the annual interest charges, based upon the present values of New Zealand Government Stocks in London. This annual difference of £60,000, capitalised at 6 per cent., represents a saving of £1,000,000 in the ultimate cost of the line when purchased by the colony under the power contained in the Midland Eailway Contract.

No. 2. The Secretary to the Cabinet to the General Manager, Midland Eailway Company Sir,— Premier's Office, Wellington, 26th May, 1892. By direction of the Premier I have the honour to inform you that the Cabinet has had under consideration your letter of the 19th instant, in reference to matters connected with the Midland Eailway, and to request that you will be good enough to furnish information on the following points, viz.: — (a.) Why does the company ask for a guarantee of interest on the capital already expended on the railway, and in respect of which a land grant has already been or is to be given ? (b.) Why is guarantee of interest asked for on cost of works on tunnel route when proposals stipulate that the Abt incline deviation is to be agreed to, by which deviation company estimate they will save £470,000 ? (c.) What is the total subscribed capital of the company, and how much of this is paid up ? (d.) What amount has been actually expended on the construction of the railway ? (c.) What is the total value of the work already completed? (/) What liabilities exist on the works now in course of construction ? I have, &c, A. Willis, E. Wilson, Esq C.E., Secretary to Cabinet. General Manager, Midland Eailway Company, Wellington.

No 3. The General Manages, Midland Eailway Company, to the Hon. the Premier. Sib,— Wellington, 26th May, 1892. I have the honour to acknowledge the receipt of your letter of to-day's date in reference to matters connected with the Midland Eailway, and beg to answer the questions therein asked as follows, viz.: —