I.—6c

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208. Hon. Sir J. Hall.] At the capital cost, but not to exceed £2,000,000 ?—Yes; I will put it that way if you like. 209. Mr. Wright.] So as to remove any doubt that might exist that the £2,000,000 was something in excess of the capital cost ?—Yes. 210. Hon. Mr. Seddon.} Still giving the company a limit of forcing the Government to purchase. As I pointed out yesterday, that is an alteration from the original contract? Hon. Sir J. Hall: lam inclined to agree. Mr. Wilson: That is not a sine qua non, if the Committee see any grave objection to it. It would be a great advantage to the company. Hon. Mr. Seddon : It means that the colony at that particular time must raise a loan of £2,000,000. 211. Hon. Sir J. Hall.] It is quite possible the colony may find it worth while to take over the line, but it should be optional, I think ?—Perhaps you will consider this point. I will leave this question to the Committee. If they can see their way to accede to the clause, it would, of course, materially assist the company in financing. That is the main object of the clause. Then, there was a further suggestion with regard to 21b in the modified proposals. It is with regard to the Belgrove Section. There are three alternatives. First, No. 21: "Within six months of the completion of the Belgrove line the Queen shall purchase and the company shall sell the same at the price of £100,000, payment to extend over a period of ten years, as provided in clause 12." Second, No. 21a. : "The company to sell to thd Government the works already completed at half their present cost —namely, £30,000, payment to be made as per clause 12." Third, No. 21b: "The company to complete the Belgrove Section into the Motueka Valley, and the Government to work and maintain the same, paying to the company the net profit after deducting working expenses." Thinking that over, it appears to me to be a very incomplete clause, and I suggest that the Government should purchase at the capital cost at the end of ten years from the date of opening this section. It would enable finality to be arrived at in regard to that section. We should have it on our hands, and it would be a detached piece in the event of the Government purchasing the other part of the line; and, not having arranged the basis for completion of the Eeefton-Belgrove Section, I suggest the Government should purchase at the capital cost at the end of ten years from the date of opening of that section. That would give ten years for the development of traffic on the lin9 before the Government purchased it. 212. Mr. Wright.] As an additional alternative, or in substitution?—As an addition to clause 21b. At present it is incomplete; there is no finality in it. You see it does not provide for any final settlement. 213. Hon. Sir J. Hall] What do you estimate the cost will be ? —I estimate the cost will be £100,000. 214. Mr. G. Hutchison.] In reference to the suggestion made as to the company taking specie instead of bonds, are your calculations based upon the selling value of 3J per cents, upon a certain day ?—At the current price on the day of issue. 215. Had you in your mind, at the time you made the proposal, a quotation ?—Yes, but you see the current price of the bonds may vary. 216. No. What was the quotation in your mind at the time you made your proposal ? —The price of the bonds to-day is about 96. 217. At the time you made the proposal, when you entered into this calculation?—l think it was 96. 218. Then, of course, you would not expect the colony to pay par value, with the calculation based upon that?— Yes, the Government must pay in full. 219. I put the position of the market being " beared " and sent down to 93, or something like that. In that case you would not expect the colony to pay you 100? —Our calculations are based upon par value, the Government would give bonds to realise the full amount. 220. I understood not. I understood that you had in your mind a quotation of 96 ? —No, the price happened to be 96. If the Government stock was above par we should only receive par value. 221. That is not likely at 3-| per cent. You were willing to take stock, and at the time you had in your mind a quotation of 96? —Yes. 222. Why should the colony pay you £100 per bond?— The colony could not pay us £100 per bond ; but they must give us extra bonds to make up the difference. 223. That is the same thing?—l mean to say we take payment in bonds to realise par value. 224. No, you take it at 96?— Not in my calculations. The value of the bonds then was £100. The company taking bonds is purely a matter of convenience for the colony. 225. Say they are worth in the market 96 now ?—lf they are worth 96, then the Government would pay the company the difference between 96 and 100. 226. Exactly 96 per cent. ?—They would pay us 100 per cent. 227. Why should they, in the event of the bond being sent down to 93, pay7you £100 ?—You do not understand me. You would have to pay £4 for each bond, if standing at 96. 228. I see. You want 100 per cent., par value ? —We want par value. 229. I understood you were willing to take the bonds of the colony at their market price ?— Exactly; but if their market price is only 96, and they are only worth 96, you must give us the balance to make them worth £100 per bond. 230. You want the £4 made up in other bonds ? —Of course. That is merely a question of market price of the day. We have suggested that the Government should have the right to pay cash if they choose. Suppose you have the contingency of a " bear " ; instead of our having to put the bonds in the market at a low price, the Government making up the difference, it might be advisable for the Government to pay the company that instalment in cash, to avoid the depreciation of their own bonds on the market. That is why I made the suggestion that it shall be optional as to form of payment.