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D.—4a,

Mr. Hutchison : Not by any means. Sir C. Lilley : You may make statements without reading this letter. You might state generally that it is an important district, and that the population is large. Mr. Hutchison : I had proceeded beyond that point. lam now dealing with the history of the ■contract, and that, I submit, is relevant. Sir C. Lilley : I confess Ido not see it. We have the contract here. Mr. Hutchison : The contract is not one originating in itself. There are several Acts of Parliament incorporated with it, and a previous contract referred to in it. Sir C. Lilley : I am not of the opinion of my colleague, because he may wish to hear this, or he may think it does not matter at present. Sir B. Burnside : My opinion is that it does not matter two straws, excepting for the purpose of enabling us more fairly to grasp the facts when they come before us. We hear you as diligently as we hear Sir Bobert Stout, Mr. Hutchison, and in anything you put before us we shall decide whether you are right or wrong. Sir B. Stout: I suppose that the admissibility of evidence is not to be gauged simply by what counsel chooses to say in his opening ? Sir B. Buenside : Of course not. Sir B. Stout: Then, on the main question of putting this in now, he is to be allowed to say anything he pleases, whether evidence or not. It is giving counsel a very Sir B. Buenside : Is it possible to say that a particular thing is relevant ? Sirß. Stout : Suppose in the opening of a case counsel proposes to lead certain evidence, and the other counsel says it is not evidence and that it is not relevant. If there is reasonable ground for opposition to it, the Court generally says, " We will agree before you open that you can tender the evidence, and we will deal with its admissibility afterwards." Sir B. Buenside : That is the course you have adopted ? Sir B. Stout: Yes. Sir B. Buenside : Where counsel address the Court and bring before it matter which should not have been brought before it, they assume an enormous amount of responsibility. Mr.'Hutchison: With a due sense of responsibility, I shall ask the Court to hear what I am about to say in reference to the transactions in London in 1886. Sir B. Buenside : It being understood most distinctly by both sides that, if the admission of evidence of any kind tends to raise or embarrass any clear and distinct matter which arises out of the contract, you will find my colleague and myself will very soon be prepared to stop it. Mr. Hutchison : A material fact in connection with this business was the preparation of the prospectus of the company. That prospectus was submitted to the Agent-General, who, we say, represented in London, in this matter, the Executive of the Colony of New Zealand. I propose at the proper time to put in a copy of that prospectus. Sir B. Stout: What date was this ? Mr. Hutchison: The 30th April, 1886. I repeat, it was a prospectus submitted to the AgentGeneral and approved of by him after he had consulted the legal advisers of the colony in London. Sir B. Burnside : For what purpose was that prospectus issued ? Mr. Hutchison: As showing that there was notice from the first to the Queen, through her representatives, that it was an essential part of the operations of the company that they should be able to finance beyond the subscribed share capital of the company. Sir B. Stout: That prospectus was issued two years and a half before the contract was made. Mr. Hutchison : Just so; the connection will appear presently, when I come to show the reason for an extension of time. All these delays, of course, prevented the company from beginning the work of construction. Sir C. Lilley : Am I right in assuming that you wish to implicate the respondent, the Queen, in the financial transactions of the company? Mr. Hutchison : I am not attempting to implicate the Queen in anything, but to show that it was an essential element that her subsequent actions, through her representatives, militated against and interfered with the company. Sir C. Lilley : That she was responsible ? Mr. Hutchison : Yes; by preventing the company from deriving the contemplated benefits of the contract. Sir C. Lilley : That it caused the ill-success of the company ? Mr. Hutchison: Yes. Sir C. Lilley : Where do you find this contract ? Mr. Hutchison : The recitals of the contract contain references to the Acts of 1881 and 1884. The power to borrow on debentures, with a special charge against the landed estate of the company, is conferred by those Acts. Sir C. Lilley : That is all right. It was the estate of the company that was charged, and not the estate of the Queen. Mr. Hutchison : It was a right of selection the company had. Sir C. Lilley : Then it was security for the debentures ? Mr. Hutchison : Yes; the property of the company is the security of the debenture-holders. Sir C. Lilley : How do you implicate the Queen in that ? Mr. Hutchison : Because she —speaking of Her Majesty, as represented in the matter of this contract, by the Government of the colony —knew it was part of the contract that the company should be able to finance in this way. This paragraph occurs in the prospectus, which was approved, as I have already said, by the Agent-General, who represented in London the Government of the colony: "Becognising the importance of the line to the colony, the New Zealand Government