1.—13.

6

[P. DUNCAN.

He got a reward for that, and it was confined to the first twenty. It was not in the ordinary form of floating a business at all. The company's capital was increased to £100,000, and the constitution of the company was laid out in such a way that there should not be any necessity for reconstruction for such a purpose at all. It has been the company's intention from the beginning to avoid any such thing. The directors from the beginning have had a distinct understanding among them and between themselves and the shareholders not on the Board that there should be absolutely no steps taken or methods adopted which could by any kind of interpretation be termed "exploiting. It was to be a clear commercial undertaking designed to do benefit to the district generally, and ultimately, we hoped, to do benefit to ourselves, because those who took the largest interest in it were citizens of Dunedin who would probably be more benefited indirectly by the commercial success of Dunedin than by any little money which might come to them in the way of dividends from the company. 2. What is the total amount of capital you have available under the articles of association for undertaking this work when all the calls are made? —The contributing capital is £94,500--that is, if we had all our contributing shares issued —out of a total capital of £100,000. Of those contributing shares about 33,000 are allotted and already subscribed. 3. How much total subscribed capital have you at the present moment ?--Thirty-three thousand pounds. 4. Supposing this Bill is put through, do you anticipate any difficulty in getting the total capital of £100,000? —No. The steps the directors have in view are these: Thirty-three thousand shares have been subscribed for. Our first installation costs us £56,000. We should not expect that all that power would be in use within a, day —it would be a poor look-out for the supply if that were so. We feel certain, however, that if the Bill is passed the balance that is still required to make up the £56,000 will be subscribed. We issued a prospectus in the month of May last, stating, in accordance with the statute, the minimum subscription on which the shares shall be allotted at £10,000, and the £10,000 was subscribed within six weeks. 5. Have you a copy of that prospectus? —Yes. But immediately the City Council gave notice of their opposition to the Bill there was a drop aud subscriptions did not come in, while several financial men in Dunedin told me that they were waiting to see the result before subscribing any more. 6. The company was reconstructed under this prospectus? —The companj' was never reconstructed. We merely, under the power of our articles of association, increased our capital. 7. It is proposed to raise all the capital in Dunedin? It is not proposed to raise money on debentures in the Home market? —No. I expect that what will take place is this: We have set our face against borrowing, but when the first installation is built up by the subscribed capital, it will be a matter for the directors to consider whether they will call on the shareholders to provide the money for the second installation, or whether it will be better to borrow on debentures for that. I have not the slightest doubt that the capital will come forward easily for the second installation once the first is fairly set going—by asking the shareholders to come forward. The shareholders are not confined to Dunedin, and actually applications have come from England from persons who have heard of the company —that is, to the extent of a few hu-ndred pounds. But the company is a Dunedin company. 8. You do not intend, if the Bill goes through Parliament, to call in a larger company-you actually intend to go on with the work at once? The Committee wants to know whether it is au absolutely bond fide transaction ?- -Everything that we have done points to our bond fides, and our intention is to keep it just as it is. 9. You are satisfied that you are financially strong enough to undertake the work? —Yes. 10. The first installation will take the power into all the places mentioned that you propose to supply, and you think j'ou will make a profit? —I should not say that, because we should require to bring along our second installation in order to get to all those places. • 11. You do expect to get a profit on your first installation? —Yes, but we would still build up our capital. We are not looking for a profit on our first installation, but require to build up capital for our second. When we ask a man to take up shares he knows that there are 100,000, and he cannot complain if we call up our capital. 12. Supposing the first installation is made, do you know enough to say whether the company will be successful or not? —Yes. 13. Mr. Major.] I understood you to say you would allot the whole of your shares for the purpose of raising £100,000 capital? —Yes. 14. Unless the shares were applied for how could you do that) —Of course, we could not in thai case —that is, the shares must be applied for. But the success of our first installation will induce the public to subscribe. 15. Do you think the directors would resist an offer of, say, £50,000, for their present rights from outside capitalists? —I should feel sorry to think otherwise. I do not think I should be tempted to do so. This venture has been entered upon as an investment, I believe, by most of the people interested. 16. Dr. Findlay.] How many shareholders are there? —I think about 170, and we started with ten or eleven. 17. Mr. Buddo.] I understood you to say that if the City of Dunedin were left out you think your company would not make a start? —That is what it amounts to. 18. Could you give the Committee an idea of the amount of power you could profitably dispose of? —No. I should have to leave that to Mr. Stark. A person in my position can only speak in general terms, which I understand Dr. Findlay called me to do in order to establish the preamble. 19. Was any other expert opinion employed to give an estimate of the cost of conveying the power from the falls to the power-house than the company's own engineer? —The position about that is this: This undertaking consists of two classes of work. It is what is generally called a hydro-electrical undertaking. The hydraulic works were started under the engineership of Mr. Robert Hay, who is present here to-day, and he gave a report on these works which was veryencouraging, and which led us to have faith in them so far as the hydraulic part is concerned.