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the contractor to lead all the material from cuttings to embankments), in interest on the outlay alone, irrespective of the postponing of the advantages which the railway is expected to confer, would very far exceed any extra expense which the peat embankment is likely to cause after the expiration of the period for which the contractor has to maintain the line.

It has been supposed that as the contractor has been allowed to form some of the embankments from side cuttings, he has thereby effected a saving of which the Province should have the advantage; the supposition is erroneous, as the contractor has satisfactorily shown to us that he has actually paid on the average 2s. 10d. per cubic yard, whereas the average rate at which he is paid by the Government is only 2s. 5½d., cuttings only being paid for where they are run to embankments.

The embankment which appears to us the most objectionable, is that near the Mokotua, which is formed nearly entirely of sand, but in this case it has been run from cutting according to specification; it is to be feared that the strong westerly winds will remove considerable portions unless the slopes are protected.

ALTERATION OF LINE.

No alteration has been made since the contract for the work was entered into.

ROOTS OF TREES.

In Embankment No. 3 we saw that the peat preserved butts of a few trees had been used in the embankment. Mr. Heale does not consider them objectionable where used. There were no roots, properly so called, attached to them; in other places we noticed that the roots had been thrown aside.

EXTRA WORK.

Under this head we may include the cutting of grass and flax, on the seat of the embankment, the fascines, and side-ditches; the former of these works, although required to be done in the specification, is not included in, or covered by, the lump sum estimated for this contract; and as the contract is made for certain works, (more or less) at scheduled prices, it may conveniently be included amongst the extra works, as like those scheduled as such, if performed, it would have to be paid for; but unlike them, as no provision is made for this work, the contractor is subject to no deduction in cases where the work has not been performed; the other extra works, if in excess of the quantities stipulated, are to be paid for as extra, and if in diminution, they are to be deduced from the quantities for which the contractor is to be paid. To have performed any of these works where they are not required, would have been a wasteful expenditure of public money.

We are satisfied that wherever these works were necessary, they have been executed.

CUTTING NO. 2.

The material from this cutting (with the exception of some lignite thrown to spoil) is gravel, reserved for ballast, and has been temporarily placed on the bank.

CUTTING NO. 3.

Has been run to embankment.

CUTTING NO. 4.

Objection has been made that the material from this cutting has been thrown to spoil, where the side-drains should be. A considerable portion of this long cutting has been run to spoil, for reasons before given; the rest is gravel reserved for ballast; only a short side-ditch has been required during the progress of this work, the road-drain generally answering the purpose; no portion of the spoil bank is placed where the side-ditches should be. The gravel for ballast is placed on the side of the banks. There is little fear of land slips now, and there will be none when the gravel ballasting shall have been removed.

EMBANKMENTS NOS. 5, 6, AND 7.

These are all upon the large swamp, beyond West’s. The swamp in the neighbourhood of the railway has been efficiently dried by the outfall-drains, executed before the commencement of the railroad, and by the side-ditches. For a detailed description, we refer to the evidence of Messrs. Bailey and Marchant, and to the report of Mr. Heale, contenting ourselves with expressing our great satisfaction with the present state of the swamp, and embankments in this very difficult ground.

PITCHING AND METALLING OF ROAD.

The objections taken to these are fully answered in the report of Mr. Heale’s, with which we entirely concur.

Before closing our report, we have to notice the questions specifically raised in your Honor’s letter of March 23.

1stly. If there have been deviations from the contract.

2ndly. Whether the reasons for permitting them are sufficient and satisfactory.

3rdly. Whether such deviations alter the permanent value of the work; and if so, to what extent. And we reply that deviations, properly so called, have been