35

D.—4a

Now, I would quote a letter from the manager of the company to the Minister, dated 13th October, 1891, having general reference to this question : — " Sir, —Beferring to the correspondence which has passed between us on the subject of the timber on gold-mining reserves, and the duty of the Government to conserve all timber within the authorised area, I have now to confirm the telegram sent you on the subject. It is clear that under the provisions of the contract the Government is bound to conserve all land or timber over which the company may have the right of selection until such time as the land-grants are fully satisfied. " I now give you formal notice that the company may require to select the timber on the goldmining reserves which have been or may be made; and I must hold the Government responsible for any deterioration to the land-grant which may be caused through the timber being destroyed or cut otherwise than specially provided in the contract. " As to the question of issuing licenses to cut timber within, the authorised area, the company is willing to consent to licenses being issued on a royalty basis, on the terms which have been forwarded, on the 22nd June last, for the approval of the Government, and to which I have had no reply; but the company will not consent to the old form of £5 licenses, which has proved to be extremely deleterious to the forest and wasteful of the timber. " I have, &c, for the New Zealand Midland Bailway Company (Limited), " Bobert Wilson, Engineer-in-Chief and General Manager." There is a mass of correspondence on this subject which I would leave to the evidence to bring out. The damages under one or other of these two heads is £20,000. I may say this is a claim distinct from all the other .claims as being one not involved in the consideration of the damage to the credit and consequent injury of the company. This claim for damage to the timberrights of the company stands apart—distinct—from the other claims. I now come to the fourth paragraph of the particulars, which deals with clause 33, already referred to in some of the correspondence. It is difficult to entirely distinguish in the correspondence and in the evidence between the evidence as to various clauses of the contract —viz., 16, 18, and 33, which deal with the right of the company to remuneration, as I may term it, in the shape of land. A consideration of clause 33 opens the third branch of the remuneration which the company had a right to expect. First of all, under clause 16, they had the right to select blocks of land as they were earned, taking such of the blocks indicated in the schedule to the contract as the company might consider most desirable. Under clause 18 they had, in respect of lands which might be proclaimed mining reserves, subject to certain exceptions, the right to select timber in lieu of the land itself, the timber being in many cases the sole value which was to be derived from the land. Then, we have under clause 33 another class, —a class of cases where the Queen was to deal with the lands at the suggestion or request of the company. This referred peculiarly to lands on the western side of the main range of mountains, and indicates the different treatment considered necessary as to the lands on either side of the Middle Island. On the east side—the Canterbury side—the lands are open valuable pastoral lands laid off in large blocks ; the lands on the western side are covered with timber, fertile in the valleys, and barren along the hills, and are lands which could only with advantage be taken up in small areas. The procedure for working this scheme, devised and agreed to by the parties, by which the Queen should continue to administer the lands on the western side of the mountains, is indicated by the clause which reads: "33. So far as respects any lands within the authorised area in the Nelson and Westland Land Districts, on the western side of the main range of mountains, and being available for selection by the company under clause 16 hereof, the Queen shall, from time to time, on the request of the company, sell any such lands for cash, or on deferred payments in such manner as may be agreed upon between, the Queen and the company, or may let the same on lease, to any person or persons desirous of purchasing or leasing the same, subject to the following provisions." These provisions are a number of machinery clauses for giving effect to the arrangement just read. The first is : " The company shall, in writing, authorise such person or persons to make choice of the land required, and such choice shall be made in conformity with the Survey Begulations for the time being in force both as to the shape and frontage, and as to all other particulars." The company, therefore, had the initiation of selection. Then, the next reads : " Upon the company requesting the Queen so to sell or lease any land, the Queen shall forthwith cause the value of such land to be assessed at a price not being less per acre than the certified valuation per acre of the block, and the value of the remainder of the block shall be deemed to be the certified valuation of the whole block, less such assessed value of the portion disposed of." For instance, if a selection of 100 acres were taken out of the 5,000-acre block, it would probably be the pick of the block, or one of the best pieces in it, in some valley or other spot favourable for settlement. The Queen, by the Commissioner of Crown Lands of the district, would assess the value of that particular piece not being less per acre than the value per acre placed on the whole block. If other selections were taken up they would be dealt with in the same way, and it might be a third of the whole block would be taken at a price which would represent the value of the whole, according to the B 1 value. The company, in that case, would have the remainder of the block as a profit. That would illustrate the working out of the clause. Then, we have further directions as follows: "In the case of a purchase, the amount to be paid by such person or persons for the purchase of any such land shall be fixed by the company, but shall not be less per acre than the value assessed by the Queen in the last-preceding paragraph; and on payment by the purchaser to the Queen of a deposit of 10 per cent, of the purchase-money, together with the estimated cost of survey of the land required, the Queen shall cause the same to be surveyed, and, after completion thereof and payment of the balance of the purchase-money has been made to the Queen, and on the further request of the company in writing, the purchaser shall be entitled to receive a grant of the lands so purchased." Then the clause proceeds: "In the case of a lease, the rent or royalty and the terms and conditions of the lease shall be agreed upon between the Queen and the company ; and the applicant for the lease shall, at the time of such applica-