During which no allusion was made by Mr Lawrie or Mr Dobson to the Colonial Investment & Agency Company or to any person connected therewith.

You don't realise the position of all Australian investment companies here when you plead for more money to be sent by the Northern. We cannot raise an additional pound of fresh capital just now; indeed, our difficulty is to tret our debentures renewed as they periodically fall due at reasonable rates. When our shares command the price of 15s to 16s for the 20s paid we are considered a marvel of success compared with the very serious discounts that our other New Zealand companies stand at. Your legislative proposals do not mend matters either. It is true there is considerable doubt here what their meaning is, and what their effect will be; but if the prevailing view that all such companies as ours will be increasingly burdened prove correct, you may look for all companies calling in their loans and contracting, if not altogether closing, their business, instead of launching out into wider development. We cannot ask shareholders to protect the morbidly dreaded liability of uncalled capital, with an annually declining profit and a never increasing dividend as the set off. To pay something like 4½ per cent, for debentures, with commission on renewals and all other expenses, and to get 6 to 6½ per cent, on your side is barely good enough to induce men to face attendant risks, which, in their present humour, they are not inclined to view lightly, however able you and I may be properly to gauge them. No new company would start under existing circumstances, or in the expectation of any early improvement. We need not wonder then if shareholders begin to kick against the perpetuation of companies by holding whose shares they feel they are running risk and getting very little if any compensating profit.

You know my connection with the Colonial Investment [unclear: a] Agency Co.

The process of liquidation is very slow and tedious, and I am not help thinking that the men at Dunedin, instead of hurrying a realisations, are simply obstructing them. No progress is being made. My own conviction is that no real progress will be made in recovering what money there is in the wreck till all control is take entirely from them, and put into the hands of a competent and page 19 disinterested man. It is of far more moment that the Company should make realisations, even on a low basis, than that we should be kept hung up in a state of suspense. Shareholders are groaning to get rid of their liability. What do you think? Could you reconcile it with your other engagements, considering the distance you are at from the field of operations, to undertake it? Or could you recommend any one who could do it? And what would it cost? Remember, I am writing entirely for myself, not having yet breathed this to another Director, and I wish you to clearly understand that I am merely enquiring for information, but without any responsibility whatever. But when I do attack this matter, as I must do. I wish to be armed with such information as I am now asking you to afford me.

Colonial Investment Company.

I will undertake to wind the Company up at this end if you offer me the work.

I cannot recommend to you any Dunedin man who would not be hampered by many local considerations, and who, indeed, possesses knowledge both of properties and finance who could undertake it. Company work looks easy enough to those who have not served an apprenticeship, and all the Dunedin men who have so served are in a mess with their own companies.

I think it would be an advantage to have a man who is not a Dunedin resident, and whose only consideration is to realise with the best possible profit to his company.

Cost.—I don't quite know what to say, because I don't know what there is left to do. When I reported two years ago there were . . properties. The advances were . . . . . valued by me at No doubt there have since been repayments, and the most troublesome securities will remain on hand.

I would find office room, clerks, and pay my own travelling expenses between Napier and Dunedin (to and from) for £1500 per annum, or to put it in a better form, £125 per month. Advertising page 20 and auctioneers' commission, when incurred, would be extra. I would keep all this as low as possible, and would give to the Company all rebate commissions which it is the custom to give to the attorney who introduces the business.

If you and your co-directors are not satisfied with the results after six month's work, you give me £1000 in full satisfaction (i.e., £250 in addition to what I have been drawing), and terminate the connection. If, on the other hand. I find that I am not, and cannot [unclear: earn] what I ask, and that it is absolutely impossible to quit the properties, I will after six months, merely charge for the services of my clerk and a small fee for myself, say in all £50 per month, and you can still have the right of terminating our arrangement whenever you like.

The point is this—that during the first six months the work will be tremendous, and I shall have thought out every method and made every suggestion I can for disposing of the properties. I must be paid for that work. After, if we don't sail along, I'll do any-think that you personally think right. Perhaps a smaller wage and a substantial bonus if I liquidate at this end with such results that no further calls would be made upon Shareholders, and the whole business to be completed within two years, or so much less if within three years, would meet the case. 1 cannot judge of that unless I know-the exact position.

The new valuations for the Land Tax have only just been com-pleted, and the Boards of Reviewers will shortly sit in the various districts. Bartleman ought to have all his values reduced to the figure at which he is prepared to sell. If the work is given to me I should have a shot at the Minister of Lands, and see if he would take over any of the properties for his Government small farm settlements. If well worked it is just possible something night come of it, but not probable.

After getting the Government valuations of all the properties, it would be necessary to search the Registry and ascertain the owners of the adjoining blocks, and offer them our land.

In many cases, most, I presume, the lands are still in the name of the mortgagor, in such cases it would be well to sell through the Registrar, unless we could get a proper undertaking from the page 21 mortgagor to join in the conveyance should a sale be effected. A mortgagor is, however, a rum . . and, if bankrupt, sometimes refuses to implement his undertaking. We can, of course, sell when in default without doing so through the Registrar, but I don't like it. We sold one of . . . . sections last week for £5 direct, because the cost of selling through the Registrar would have swallowed up all the purchase money.

I have delayed writing you in reply to your long letter of 16th April, till I could get the "Colonial" Directors to consider my project, and their meeting could not be held till one of their number. Mr Erskine Scott, had returned from Australia. We met last Monday, and after a long discussion I think I may say we are now pretty nearly of one way of thinking.

The Directors are, in the first place anxious, if they have to break off from Mr Bartleman and his associates, to do so with as little friction as possible. It is quite likely that not much indication of this step has been given to them, and that they have not been stirred up enough to show more energy in realising the Company's assets, and they will say they have not had a fair chance if we are now going to take lower prices; but I myself am persuaded that they are not the right men to do the business, and even at the expense of a little feeling the work must be withdrawn from them.

The Directors are not blind to the awkward position in which they would be placed were you to fail in liquidating the Company, but I have impressed upon them that if you are entrusted with the work, you are not the man to fail, but will carry the business to as satisfactory and speedy a termination as is possible for any one to do.

In the matter of the annual expenses the "Colonial" Board. I think, maintain that they can make no further reduction. Now, if the Board here could say to them that they can liquidate more cheaply, as well as more expeditiously, through you, they would have a satisfactory ground for the somewhat sudden change. Can you help them to do this? Would you take say £300 a year and page 22 expenses, and trust the Directors, who are just men, but who cannot afford with the money of an impoverished company to make generous offers, to fix the commission to be ultimately paid you according to results? If so, and you could wire "yes," I believe instructions would be sent you forthwith,

I send you copy of the last Report. I don't think any material difference has been made in the position of the Company since. You see we are working, what with interest, taxes, and other charges, at a loss of some £5000 per annum. This is simply ruinous.

If you wire "yes," do so through the Northern, and Fleming will understand it to be for me; but whether you wire or not I I shall await your answer with interest and impatience.

On 15th August I received your letter of 8th July, but was unable to send you a cable until 1st September.

I could not offer to embark upon the undertaking without some consideration, and it was necessary for me to discuss the matter with Mr Ormond, and to get his consent to my necessary absence. Mr Ormond is of opinion that I shall have a very great difficulty in selling the properties, more especially as the Australians are going in so largely for exportation of frozen meat, and there is a general feeling that it must affect the value of our lands. However, we shall see.

Remuneration.—I understand, of course, that the £300 is merely for myself. I shall have to employ one good clerk, and the other expenses will probably be commission paid on sales.

As soon as I hear definitely from you I shall go to Dunedin and arrange matters with Mr J. B. Reid.

I will put my back into the work and hope to make some impression upon the properties.

After much and repeated discussion following your cablegram saying "yes" to my proposal, and after what my brother Directors of the Colonial Investment Co. may perhaps consider an amount of forcing on my part, I have pot them to agree, and you will be hearing from Mr Moncrieff with the needful authority to take on hand the management of the Company with a view to its speedy termination consistent with prudence and economy. It may with perfect propriety be said that this result has been brought about solely by me, and I consequently feel the gravity of the responsibility thrown upon me. But I remember that the subject you have to handle is not unknown to you from your having already reported on each individual case. That you will carry out with skill, experience, energy, and integrity the serious work entrusted to you, and that you will enter on it untrammeled by a feeling that might weigh with others of having brought about the mess, and of there being no need of undue haste in revealing it.

I have your letter of 26th September, and am ready to go to work upon the "Colonial" as soon as the necessary authority arrives.

I am posting you the new Act, "Land for Settlements," but from what Captain Russell tells me, it appears that the Government will only purchase land near towns; we cannot hope to do anything under this Act with the "Colonial," but I shall see the Officials.

I appreciate to the fullest extent the gravity of the responsibility which we are undertaking. I say we, for as far as this side is page 24 concerned, I must consider that your mantle has fallen upon me, and I will approach the task in that spirit.

Wishing you a happy New Year.

Valuations on page 4 of pamphlet.

A few examples will show how disingenuously these have been put before you.

No. 11.—Owing, £l,607; Dobson's Valuation, Nil; Realised, £614.

My report states, "No. 11 filed schedule in February, 1890. I understand that the validity of the deed held by the Company has been questioned, and that the debt is likely to show a total loss."

This information was written down by me from the Managed dictation; he did not show me the deed which represented the security, as he said it was valueless.

The fact was that the deed had never been registered. (I believe Mr Bartleman was blameless in the matter). Eventually the Company got a dividend of 4s 11d in the £.

No. 12.—Owing, £145; Dobson's Valuation, Nil; Realised, £150.

My report states "I did not see these chattels, and could obtain no information about No. 12."

The Manager told me he knew nothing about No. 12; that it was useless trying to see the chattels as it had been ascertained in similar cases that the neighbours exchanged horses when the security came to be realised. He asked me to find out what I could about No. 12 when I was in a certain district. Eventually another person gave a cheque for No. 12's debt.

No 31.—Owing, £519: Dobson's Valuation. Nil; Realised, £310.

No. 31 was known as "Rakaia Grain Account," and the following is my report written from Mr Bartlemants dictation:—"The Company, in order to secure grain grown page 25 upon McKerrow and Mann's farms, purchased it at the market price. The purchase resulted in a loss for which the Company hold no security whatever."

When the Manager received copy of my report he wrote to his Head Office on 4th August, 1890.

"Mr Dobson puts the whole amount as a deficiency, notwith-standing the fact that we held against it 2071 bushels of wheat and 1165 of oats."

Nos. 11, 12 and 31 were accounts at various agencies, and the manager's knowledge of them coincided with my valuations. To prove to you that what I state is correct I will quote an incident regarding an account which I will call

Rocks.

My report reads: "Amount owing, as per Mr Bartleman's statement, £672. Wheat in store at Oamaru will leave a debit balance."

Wishing to make my report as correct as possible I telegraphed from Napier for information and received the following reply:—

"Rocks wheat sold, deficiency two hundred and thirty three pounds six and fourpence.

A. Bartleman,

6/6/90."

I now find that since June, 1890 further sales of grain have reduced the deficiency from £233 6s 4d to £163 13s 4d.

No. 33.—Owing, £220; Dobson's Valuation, £78; Realised, £168.

My report states, "Security, 5lac. 2r. 13po. No. 33 never executed a mortgage and deserted the property. Mr Blank offered £3 5s per acre for the section. Mr Bartleman asked me to advise whether this should be accepted. Land all fiat and stony. No buildings thereon. Section lies into Hororata Township, which, however, is an unimportant village. I recommended that Mr Blank's offer be accepted. The section is only valuable to some one requir- page 26 ing a horse paddock, and is not worth more than £1 10s per acre if put in the market."

It did not occur to me to add that if the offer of Mr Blank, who wanted a horse paddock, was accepted, the valuation should be raised to £168. The members of the Edinburgh Board would [unclear: arrive] at that conclusion without my assistance.

Land Tax Values.—I hope and believe that in many cases the late Departmental Valuations exceed those made by me, but I have read a letter wherein the Land Tax values of eight of the Company's farms are given at £19,625. My valuation of the same farms was £22,700.

"Any comment would be superfluous."

I now reproduce a circular, issued by the Edinburgh Board to the Shareholders, which some of you have perhaps mislaid—

The Colonial Investment & Agency Company (Limited). 46, Castle-street, Edinburgh,

31st July, 1890.

Dear Sir,—In accordance with the understanding arrived at the Board deem it their duty to inform you without delay of the result of an independent report by Mr Robert Dobson on the securities held by the Company. The report, which was received by mail on the 21st instant, is very voluminous and goes into great detail on the various securities.

In addition to the sum of £60,000 written off by the old Company, it shows an estimated depreciation of the assets of £55.000.

The valuation is stated to be upon the basis of the productive power of the securities, which the Directors understand to mean ability to pay interest on the amount of the valuations. This very severe test at the present time when the colony has been passing through a crisis, and shows a result much more unfavourable than any previous reports received by the Board.

Mr Dobson has evidently in preparing the valuations taken great. page 27 care to avoid any over-statement of value. This impression is con-firmed by the fact that some sales of the smaller securities have been made since his report was prepared and that the prices obtained were in excess of his valuations.

The Local Board have not yet had an opportunity of seeing the report, but a copy has been sent to them, and the Directors expect to have their observations before the annual meeting."

I quote the foregoing to remind you of the fact that the "late members of the Local Board of Advice "lost the insignificent sum of £60,000 on behalf of the Old Company long before I was asked to make an independent report.

No wonder they feel annoyed at the polished wit contained in the minute which not only dismisses them but also thanks them for their "faithful services."

In their minute of 19th August, 1890, the "late members of the Local Board of Advice "indulge their wit at my expense and also at the expense of those gentlemen who assisted me with the valuations. It is not, however, so polished as that which emanates from the Northern Athens.

They say:—" During Mr Dobson's comparatively lengthy visit to Dunedin obtaining office information respecting the Company's securities, he appeared to avoid any communication with the members of the Board on the Company's business, as he never once referred to it, though every opportunity was afforded him of doing so."

This almost "stirs up the monosyllables of my unsanctified vocabulary," for 1 have always considered that the "late members of the Local Board of Advice" (Mr Bartleman always excepted) were not very desirous of talking to me.

Mr Begg—I met in the Company's office. Certainly he shook hands, but that was all he had to say I failed to draw him with the very original remark that it was a "fine day." Then I made another attempt and told him that when a youth I was in the office of my page 28 esteemed old friend Mr E. B. Martin, and remembered him (Mr Begg) very well in 1869.

That froze him.

I afterwards heard that he was arranging one of his "analytical" sporting tours, so I suppose his mind was not in a state of receptivity.

I did not see Mr Begg again until Friday, 2nd December, 1892. Again we were at the Company's office.

I, like the Peri at the gates of Paradise, was demanding admission.

He, like the gallant leader of the "late members of the Local Board of Advice," was awaiting solicitor's opinion as to how he could legally charge six months' fees in advance and have the necessary entries made in the books before handing them over to me.

Mr Begg appeared smilingly delighted. Perhaps he thought that his opportunity had come and that he was going to give me a bit of his mind. I thought too much joy might make him ill and so. although he "'ticed me on" several times, I made the "retort courteous," and disappointed him.

Mr John Reid.—I called upon this gentleman twice, but he was out upon each occasion. I am not aware that he returned my call. Up to the time of writing I have never seen Mr Reid, but it is a sight which I must not miss for is he not one of those three gentlemen who "thought it not incompatible with a fine sense of honour" to draw their solatium six months in advance, notwithstanding that their powers had been revoked?

Surely three out of the four gentlemen who composed the "late Local Board of Advice" ought to have felt themselves handsomely paid for the next six months when they received the thanks of the Edinburgh Board for their abl—, I beg pardon, "faithful services."

Mr James Smith—I saw in the Company's office. He was good enough to ask me to come and stay at Greenfield when 1 was page 29 in that neighborhood. I travelled in the train from Lawrence to Milton with Mr Smith, junior, to whom I explained why I was unable to visit Greenfield, and I expressed my regret thereat.

Mr Babtleman.—I regret that I have been compelled in self-defence to introduce the Manager's name into these pages, If any blame attaches to him for the non-success of the Company it is of that negative order which could not fail to be induced by contact with a Board possessed of a jellified vertebra. When forced to refer to the Manager I have tried to bear in mind the admonition contained in Proverbs xii. 18.

The next item in this minute is a gratuitous statement that my "experience is not of a practical character, and is chiefly confined to office work."

I won't trouble you with my experience but 1 think a fair retort would be that the experience of the "late members of the Local Board of Advice" in the management of Companies such as yours is not of a practical character, and is chiefly confined to losing their shareholders' money.

Then we come to that very ancient sarcasm about "a young man."

Pitt was charged with the same offence by persons who were jealous of his ability.

History repeats itself: but did I not correctly grasp the fact that the mind of the "analytical hunter" was not run upon the "broad guage?"

How often, alas, the traveller," Religion," occupies the sleeping car of the narrow guage mind to the unconscious exclusion of his fellow traveller, "Christianity."

The only evidence I had of Mr J. B. Reid's youth was that he spent a lot of time trying to persuade an invalid to go to the Hospital, where he wished to maintain him for six months.

"So shines a good deed in a naughty world."

This, of course, referrs to Mr J. B. Reid. No doubt Mr John Reid's "exceptional qualities" as a practical valuer have been known to the "late members of the Local Board of Advice" for many years.

Well, Gentlemen, I am sorry to have to do so, because it involves reference to persons who have met with misfortune and death, but I must ask you to compare my judgment in selecting my associates with the perspicacity displayed by the "late members of the Local Board of Advice" in selecting their associates. Probably they and I differ as to the quality of ability which is valuable. They, no doubt, selected a peculiar sort of it in great quantity.

Southland Agency.—The minute says there was a heavy loss.

Timaru Agency.—Both their agents are dead.

The loss at Timaru was heavier than the loss in Southland.

Oamaru Agency.—Rightly or wrongly their agent got locked up for a time.

The loss at Oamaru was heacier than the loss at Timaru.

The minute proceeds to say:

"In the Southland portion of Otago Mr Dobson seems to have obtained the assistance of Mr . . . . though the Manager had previously acquainted Mr Dobson with the Company's experience of him, and the heavy loss the Company sustained through his firm, which of itself should have prevented any prudent man from concoosulting him on any matter in which this Company is interested."

(After reading this I concluded that when Proverbs xii. 16, was written the author probably italicised the word "prudent.")

This refers to my friend Mr Hugh Carswell, who, in the estimation of the Southland community, stands second to none for uprightness and integrity.

The Manager did tell me that the Company had lost money through Mr Carswell's firm.

Mr Carswell happened to meet me at Wyndham, and I insisted upon his driving with me to Invercargill, in order that he might act as guide, and point out the properties.

Mr Carswell appeared much concerned at the low estimate I formed of the value of the country. He said to me," You're wrong, Dobson; the whole of these Southland lands will 'come' again, and "McKerrow says so too." He did not make a single valuation for me.

Note.—Mr McKerrow was formerly Surveyor-General for this Colony

After reading that portion of the minute last quoted, you will be surprised to learn that the "prudent men" who comprised the "late members of the Local Board of Advice" actually continued to employ, as their agent at Timaru, a gentleman who, with his late partner, was debited in the Company's books with a large sum under the very significant heading of Misappropriations Account.

The poor fellow was, I believe, true to the Company, but he eventually justified the confidence which the "prudent men" reposed in him by following in the footsteps of his unfortunate partner, and by "helping himself to eternity before he was summoned to the table."

The minute next contains a beggarly sneer at Mr Lachlan McLean. My statement is true, and further, when he verbally reiterated his views as to value he was told that he "must be mad."

Very likely. The fact remains that the British and New Zealand Mortgage and Agency Company stands at the top of the list as having lost the largest amount of money in the shortest possible time, and the genial and contented Lockie, much to the delight of his numberless friends, has, up to the present, escaped the Seacliff warders.

Then follows a paragraph about myself which I must not pass unnoticed, viz.:—

"Mr Dobson, having undertaken the valuation, ought to have availed himself of the most capable assistance obtainable, instead of employing men connected with himself in business without any regard to their fitness for the serious responsibility involved" The italics are mine.

Gentlemen, I must point the moral to the Home Board and say that if the foregoing admirable sentiment had been written in letters of gold upon the walls of the Board room before the power of attorney was sent to the" late members of the Local Board of Advice" the Shareholders might have been at leant £60,000 and possibly £115,000 better off than they are now.

Is it possible that the "pamphleteers" think I should have applied to them; surely they would not offer such an insult to my intelligence.

Dunedin,

15th, February.

Alex. C. Begg

, Auditor."

I think that is the right document.—Yes, I remember being particularly struck with the fact "that the above agrees with the same." After such a dive as that I half expected to see Mr Begg "emerge at the end of the sentence with his verb in his mouth."

I should like to have put the word "fees" in lieu of "verb" but it would have murdered the quotation, besides his fees were safe, was not Mr John Reid the Chairman?

"Arcades ambo," (free translation, "Christians both.")

On Tuesday, 10th March, twenty-three days after Mr Begg had given his certificate, a clerk in the employ of the Company referred to, pleaded guilty to a charge of embezzlement. Mr Solomon for the defence said:—

"It was a physical impossibility for this fraud, which had been carried over years, to have passed the eyes of any one man who looked at the bank pass book and compared it with the cash book."

("The above with the same," don't you know.)

His Honour, Mr Justice Williams, said:—

"There is no doubt the most elementary precautions in the office would have prevented these frauds from having been perpetrated. The accused, however, seems to have falsified the ledgers and to have deceived the Auditor. As to that, there is this alternative, either the Auditor has not performed his duty, or if he has performed his duty in a way in which commercial men would expect him to perform it, then the system of audit is of itself a most ridiculous sham."

These documents speak for themselves, and any comment upon them would be superflows.

"I thank thee, Jew, for teaching me that word."

The last quotation I will make reads thus—

"The members present regret that the absence of Mr Smith from the Colony prevents his attendance at this meeting, but from his ex- page 34 pressed views they are satisfied that he quite coincides with the opinion now expressed." . . . . "Mr Smith subsequently concurred."

I am of opinion that Mr Smith did not retain his individuality upon all occasions at the Board meetings.

Probably he considered that in the matter of resolutions, and especially in the wording of accounts, he could not do better than "subsequently concur" with the Chairman of "practical experience," and the distinguished Auditor of the Company referred to.

When the overseer of one of the Company's farms wanted to know what improvements he might make, he was told to "write to Mr Smith."

No doubt the other "late Members of the Local Board of Advice" felt that their "experience was chiefly confined to office work.'

When a would-be tenant wrote about a farm saying: he would "come down to Dunedin when Mr Smith is in town," the Manager replied that it was "Mr Smith's busy season," and he saw no reason why the negotiation should not be conducted by letter.

It would not have caused very much more delay if Mr Smith had been "in Napier, in the North Island of New Zealand, some six hundred miles" away.

I have many more interesting things to tell you, gentlemen, but I must not forget Mr Weller's advice about letter writing: meanwhile I have three reasons for devoting the closest attention to the Company's business—

1.	I have accepted Mr Lawrie's offer, and put my hand to the plough.
2.	(This reason will be fully appreciated by "prudent men" who draw their fees in advance). My substantial re-muneration depends upon the successful liquidation of the Company, without calls being made upon you; [unclear: ride] my letter to Mr Lawrie, 16th April, 1892.
3.	I wish to further prove to you that the opinion of the "late members of the Local Board of Advice" is wrong, and that the action of the Edinburgh Directors is right in appointing as their attorney Robert Dobson.

Proverbs xxii-i.