D.—4.

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[B. W. MCVILLY.

5. Would nat that show net profits? You never consider the interest on cost of construction in jrour accounts —everything goes into the consolidated revenue? , —Yes, we do. 6. You do not show a return debiting yourself with 3J per cent, on the capital and trading balance above that as net profit?—We do not debit the interest in our accounts at all. 7. The Chairman.] In some railway systems they do, do they not? —No; in railway accounts they keep a separate Loan or Capital Account, and then at the end of the year they show their interest charges on loans as so-much, and their net earnings arc equal to so-much per cent. We do that in the abstract, although we have not a Capital Account. 8. Mr. Weston.] On these particular North Island Main Trunk connections you made what we may call a profit of £631,531 19s. ?—lt is not a profit. 9. What rate of interest did that represent on the total capital cost?—,£4 7s. Id. 10. Is that last year?— Yes. 11. And I think that, with the exception of the small Westport coal line, that was by a longway the highest percentage of all lines in New Zealand. You say if you lose the wharf you lose about £1,700 net profit in the year? —It is very much the same as a small hole in the bottom of a bucket full of water : it leaks out a drop at a time, and you very soon empty the bucket. 12. The traffic on the Manawatu Section that you took over was growing prior to the Government taking it over ?—Of course, I was not managing the Manawatu line. 13. But I suppose you were keeping a close eye on it?—l was seeing, as far as I could, that the Government got as much of the traffic originating on its own line as possible. . 14. But as a Government official you would keep a, constant eye on the earnings of that line? —Yes, but I am not going to discuss 15. But did it show a steady increase during the later years of the Manawatu? —I am not going to discuss the management of the Manawatu. It may be a matter of common knowledge that it was an expanding business, but I am not going to discuss the management. We regarded it as part of our business to keep the traffic up on the Foxton side. 16. The Manawatu Company's traffic grew steadily with the natural development of the district—that is a matter of common knowledge? —Yes. 17. Can we take it that since the Government took over that section the traffic has steadily grown?— No. I am' not prepared to admit that the local traffic on that section has grown considerably. There has been some expansion certainly, but not to the extent you infer. 18. But can wo say that 20,000 tons more goods have been carried per year in a period of three years? —I am not prepared to state what the increase in the traffic in that locality has been. 19. I mean the traffic from stations to and from Wellington to all stations between Wellington and Palmerston North ?—There may have been some increase, but I am not prepared to state the extent of the increase at the present moment. 20. But there has been an increase?— There may have been. 21. Can you find out? —Yes, I will. I will be very pleased to find out.--22. Now, with regard to Wellington, in these returns you say that at these various stations you show the goods from the different stations?— Yes. 23. Does that represent inwards and outwards traffic? —Both inwards and outwards. 24. You were saying with regard to Wanganui that the Borough Council had to take the wharves over subject to a debt of £20,000? —I said in respect to Wanganui that the Corporation purchased the wharves from the Provincial Government, who built them. 25. That also included the bridge that was built over the river?—No, I think not. •"* 26. Have you seen the Acts of 1872 and 1876?— Yes, but I have not examined them critically. 27. Tf you look at that I think you will see that that £20,000 included the bridge? —When the Harbour Board took those wharves from the Corporation they took over the liability of £20,000. 28. They also took over the bridge, and had the right to collect tolls on that bridge?— That was the old drawbridge. 29. Yes? —There was a bridge, but I am not conversant with that. 30. With regard to Onehunga, did you look up to see whether you received £3,000 or £B,ooo?—Yes. We got £3,000 for the wharf. 31. Then Mr. Hennessy was right?—He was partly right, but apart from that aspect of the matter the deal was a fair one. In addition to that £3,000 the Auckland Harbour Board had to refund to the Government Roads Department £1,500 in respect of roading, and the Railway Department got 30 acres of land at Ann's Creek, up by Westfield, for railway purposes. It is a very valuable piece of land, which we otherwise would not have got. That 30 acres of land was to be partly reclaimed. 32. What do you value that 30 acres at?—l do not know the value. At any rate, it is sufficient for me to state that the Department and the Harbour Board were both satisfied. 33. Did not take the value of that into consideration ?—We took the whole matter into consideration. 34. What value do you put upon it?—l cannot tell you what value was put upon it. The Department at that time was very much concerned about obtaining this piece of land, and we could not have got it but for this deal. 35. With regard to the Wellington wharf, T have got here the first balance-sheet of the Wellington Harbour Board. The Board was constituted in September, 1879, and on the 31st December, 1880, T find that they show in their statement the assets and liabilities of the Wellington, wharf and approach at £25,000. Was that the value of the Railway Wharf?—l should not say so. T could not tell you at the present time what the old Railway Wharf cost. [Balancesheet put in.") The Department there got a very fair deal.