49

D.—4a

" (a.) The loss of time caused by the protracted negotiations for the revision of the original contract of 1885, and passage into law of the subsequent contract of 1888. " (b.) The low status of New Zealand credit on the London money market at the time of forming the company, which rendered a large issue of capital at that time impossible. " (c.) From the same cause^ —lowness of New Zealand credit —the issue by the company of £745,000 of debentures w T as made with great difficulty, and under restrictions as to new issues until this money was expended on works. " (d.) The company's works were much delayed in reference to the subsequently-obtained deviation at Lake Brunner. The delay to works for ten months, and the protracted opposition to an improvement in the railway, seriously affected financial operations, and produced adverse criticism in London on the bona fides of the colony, and consequently postponed finance until the Argentine troubles and the Baring failure rendered these operations for the time impossible. " (e.y Further delay has been caused by having to wait for the consent of the Governor to the substitution of the incline line for the summit tunnel at Arthur's Pass. Consent to this substitution, as provided in the contract, was asked for in August, 1891, and although it was pointed out at the time that any further financial arrangements were impossible until the required consent was obtained, the company have not yet received the reply to their application. " In asking for this extension of the contract time, which is necessary to meet the requirements of financiers and to assure them that the company will be allowed to finish their works, I must point out that it is the intention of the company to hasten the completion of the railway to the utmost of its ability." The reply is the 30th March, 1892, from the Minister to the manager : — " Be Midland Baihvay. — Proposed Extension of Contract Time. "I am directed by the Minister for Public Works to acknowledge the receipt of your letter of 15th instant, applying for an extension of the time allowed by the contract for the completion of the above-mentioned railway, and in reply to state that the matter will receive due consideration when the appropriate time therefor arrives." Mr. Wilson replied on the 2nd April of the same year:— " Proposed Extension of Contract Time. " I have to acknowledge the receipt of your letter of 30th ultimo, stating that the above question would receive consideration ' when the appropriate time arrives.' " In reply, I must point out that for financial reasons it is essential that the extension of time should be granted at once. " It is impossible for the company to proceed with any financial operations unless the contract time is sufficiently extended to enable them to show financiers that there is ample time to complete the works. This is a necessary precaution, even though the works could be finished in contract time. You will note that there is a provision in the latter part of clause 42 of the contract that such extension may be made although the time to be extended has not yet expired. " I must, therefore, urge upon you the necessity of giving the matter your immediate consideration and of letting me have a definite reply, that I may cable to my directors, as no further financial arrangements can be made by them until this extension of time is granted and the consent to the Abt incline received." The next is a telegram to the manager, on the 6th May, 1892, in. reply to a telegram from. Mr. Wilson of the 3rd May, which telegram I have not here, but it is probably a reminder of the letter of the letter of the 2nd April which remained unanswered : — " (Telegram.) " Wellington, 6th May, 1892. " Minister directs me to reply to your telegram of 3rd instant that proposal to extend contract time is very important matter, requiring grave consideration not only of Government but probably of Parliament. "H. J. H. Blow, "Under-Secretary for Public Works." The next is from the manager to the Minister, on the 19th October, 1892 : — " I have the honour to request the Government to favour me with a definite reply to my letters asking for an extension of the contract time to complete the railway. lam in receipt of a cable from my directors asking for this information. I trust the Government will, therefore, reply without further delay." That did not receive any reply, and Mr. Wilson, on the 22nd October of the same year, writes a letter in which the following passage occurs (the rest is immaterial to this point) :— " . . . I beg to remind you that I have received no reply to my letter to you of the 19th instant relative to the extension of the contract time." Still no reply, and on the 17th December Mr. Wilson writes again as follows:— " I beg to remind you that consent to the extension of the contract time has not been received by the company. This question has been before the Government for months, and on your assurance I informed my directors that this extension would be granted on favourable conditions. I request you to give this subject your early and special attention, as it is impossible to even approach financiers relative to new capital until this extension of the contract time is received by the company." Again no reply, and Mr. Wilson writes on the 17th January, 1893, as follows : —