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[captain wing.

22. At Frankton the land, buildings, wharves, tram-lines, &c, were reduced to £1,400? — Yes. 23. So that all your assets stood in your books at about £22,500? —Yes. 24. Which included in goodwill £s,ooo?—Yes. 25. That is the financial position which I wanted to bring under the notice of the Committee. Apart from the question of goodwill, the properties stood when the Government took them over at £17,500?— Yes. 26. Prior to the issue of that last balance-sheet the first intimation was given that the Government intended to put one or two steamers on the lake? —Yes. 27. At that stage —it is admitted that the Government announced such an intention —you personally went to Invercargill and saw the Minister for Railways ?—Yes; and he told me the boats would be running in November. 28. Did he state that the boats were ordered? —Yes; he said one was bought. 29. And that created quite a panic amongst the shareholders? —Yes. 30. The shareholders saw that ruin threatened their property, and, as I explained to the Committee, shares which had been selling at £1 2s. 6d. up to £1 ss. went down to 12s. 6d., and were unsaleable? —Yes. 31. Your balance-sheet shows £6,357 as net profits, and you had written off £I,ISB from your plant, which is an excessive amount to write off? —Yes. 32. In making the offer of £15,000, are you aware whether any Government officer had been up to inspect the steamers? —Yes. 33. Who was it? —Captain Post and Mr. Piper, the Railway Traffic Manager at Invercargill. 34. Did the Government submit their valuation to you?— No. 35. Then, I understand you asked the Government to submit the matter to arbitration? —Yes. 36. And the Government would not do that for you? —No. 37. You have no knowledge as to why the Government fixed the value at £15,000? —Not the slightest. We could not understand it, except for the reason that we were in such a position that we would not be able to help ourselves. 38. You are a nautical man and can say from your experience whether those steamers were in good repair ? —They could not have been better. They were old steamers, but they had been kept up to the mark, and the '' Mountaineer " had been made practically a new boat. 39. And all the plant and stores, both in Queenstown and Frankton, you consider, were in good order and necessary for carrying on the business of the company ? —Yes. 40. There were no waste assets, and could be said to be legitimate capital? —Yes. With regard to the resolution which was passed by the company to let the property go, I might say that it was passed under pressure. Our solicitor told us we could do nothing else, and that if we did not do it our steamers would be thrown back on our hands, because the Government would put on other steamers. Therefore we looked at it in the light that it would cost us a lot of money if we took our steamers back after the Government had taken all the profits of the tourist season and commenced to run the whole thing again. At that time, from November till the end of March, was the time when we made all our money, because during the rest of the year we were barely able to pay expenses. 41. The Government, then, had the benefit of the whole tourist season? —Yes, and all the profits. 42. Mr. Taylor.] Have any new steamers been built for the trade since you sold your property to the Government? —Not to my knowledge. 43. Has the plant you sold been ample to meet all the requirements? —Yes, and always has been. 44. Have any material additions been made to the wharf accommodation? —I do not know. I have been away in Auckland for some time. 45. Did you actually pay £5,000 for goodwill when the new company was formed, or was it a book entry? Were the shareholders of the old and the new company identical? —New shareholders came in, but most of the old company were also members of the new company. 46. Did the members of the old company actually receive £5,000? —Yes. 47. Not in shares? —We divided the amount —half in shares and half in cash. 48. What did they receive in cash? —It was to have been £15,000 in shares and £15,000 inoash. We took the shares and other shares besides, amounting to about three or four thousand pounds. 49. And the balance? —Was in cash. 50. So that in shares and cash £30,000 actually changed hands in connection with the concern ? —Yes. 51. You say that the dividends for four years amounted to £12,670? —Yes. They were the best years we had. That was during the tenure of a former company. 52. Was that equal to 10 per cent, on the £30,000? —Yes, over. 53. Do you know what profits are being earned by the boats now? —Only by the newspapers. 54. Is the traffic increasing in volume? —Not to my knowledge. 55. You say the Minister for Railways told you in Invercargill that two boats were being built, and one would be running against you in November? —Yes. 56. Was that quite verbal?— Quite verbal. 57. Have you no statement in writing at all? —No. 58. Where did the conversation take place between you? —I think it was in the J. G. Ward Company's buildings. - 59. You are quite clear on that point?— Yes. 60. And that statement was the reason why the shareholders accepted the Government's offer ? —Yes. I was sent down to ask the question.