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hope to recover from. At the same time there also reached London a statement by the Premier of the colony Sir C. Lilley : This was in 1887 ? Mr. Hutchison : Yes, after the assignment of the Chrystall contract to the company, and pending an arrangement for a modified contract. Sir C. Lilley : After that you entered into this contract with your eyes open ? Mr. Hutchison : After getting certain modifications of the existing contract and making sure of other points. Sir C. Lilley : The new contract was after this Proclamation ? Sir B. Burnside : Was the contract made subject to that Proclamation? Mr. Hutchison : Oh, no. That Proclamation was afterwards withdrawn in toto. Six months after a Gazette notice appeared withdrawing it. I was about to refer to certain statements made by the Premier of the colony soon after the Proclamation appeared. If my learned friend really objects Sir B. Stout: Ido not object. If you are going to put in one statement put them all in. Mr. Hutchison : Just so. lam going to put in a statement of my learned friend himself, who was then Premier of the colony. Sir B. Stout: I held the opinion I hold now—that the land was valueless. Mr. Hutchison : My learned friend, who was then Premier of the colony (and consequently his utterances had a very great weight), declared in a speech at Waipawa on the 26th March, 1887, that the 250,000 acres given to the Wellington-Manawatu Bailway Company—another of the railways mentioned in " The Bailways Construction Act, 1887 " —was ten times more valuable than the 2,000,000 acres purported to be given to the East and West Coast Company. That is to say, one-eighth of the area was ten times more valuable; or, taking the Manawatu concession at an average of £1 an acre, that the landed endowment proposed to be given to the company as half the estimated cost of the railway concession was not worth more than 3d. an acre. There was not sufficient land on such a valuation within fifteen miles of the proposed line which could be selected under the terms of the Chrystall contract, which was all that then existed beyond negotiations, which could represent anything like the one and a quarter millions' worth of land which the company had a right to expect would be available for selection. In the circumstances, it was out of the question that financing could go on. I understand that my learned friend, while also holding the same position of Premier, referred in a speech he delivered at Napier to the concession to the company as consisting of glaciers, snowy mountain-tops, that there was little or no timber, and that the land would not feed a goat to the acre. Of course, the company was not going to be put off with scenery, however sublime. Sir C. Lilley : Did it make a new contract afterwards ? Mr. Hutchison: It stipulated for a guarantee of land to the value of one and a quarter millions, requiring that the area of selection should be enlarged so as to insure that they should get the one and a quarter millions' worth of land. Sir C. Lilley : Is that in this contract ? Mr. Hutchison : That will appear. Sir C. Lilley : It is in the schedule? Mr. Hutchison : The maps illustrate it. The schedules are on the maps, and form part of the contract. Sir C. Lilley : And made part of the contract ? Mr. Hutchison: Yes. The position then was that in consequence of these statements the company was paralysed. Sir C. Lilley : That is, whilst the Proclamation subsisted ? Mr. Hutchison: By the Proclamation and by the statements of persons in official positions depreciating the worth of the concessions. The year 1887 was indeed a disastrous one. It evolved also a change of Ministry, and that also meant delay in the completion of the arrangements. It will not, I hope, be considered irrelevant for me in this connection to read a Memorandum which the retiring Colonial Treasurer, Sir Julius Vogel, left behind him. It reads as follows :— "To my Successor: —The change of the arrangement with the Midland Bailway Company has been in the hands of Mr. Bichardson " —Mr. Bichardson was Minister for Public Works—" and myself. After the Act was passed in 1886 a new contract was framed, with the approval of the local Board of the Midland Company, but subject to the ratification of the Home Board." That is the transaction I have referred to as Mr. Brodie Hoare's draft proposal. " The Home Board was not able to ratify it, because, as they represented, and the Agent-General confirmed, they could not, under its terms, obtain the necessary capital." Here, then, we find the foremost Minister in office at the time admitting that the Agent-General was representing, in connection with the negotiations then going on, the Executive of the colony. " The Board," Sir Julius goes on to say, "is composed of high-charactered influential men. The enterprise could not be in better hands; and' there i 3 no reason to doubt that they wish to proceed with the railway, and will be content with any equitable arrangement that will enable them to obtain the necessary capital. Negotiations have been continuously proceeding during many months. The Agent-General has acted for the Government on the basis of endeavouring to arrange within the four corners of the powers given by the Legislature. In May last the Board sent out the alterations they desired to see made in the contract. In July one of the contractors with the Midland Bailway saw Mr. Bichardson and me and suggested modifications less onerous than those proposed by the Board, which he thought might prove acceptable. Mr. Bichardson and I so far approved of them as to say that, if the London Board were willing to adopt them, we would submit them to Cabinet, with the view of the Cabinet considering whether it would recommend them to Parliament. This matter has ceased to have importance, as the Home Board did not adopt Mr. Avigdor's suggestions. In August the Board amended and modified the alterations for which they had previously asked. They urged acceptance 6--D. 4a.