of men being for some time unemployed; and considerable bitterness of feeling has often been engendered. The contract system also gave rise to sub-contracting, which is worse again; for not only {107} is it subject to all the drawbacks of the parent system, but by relegating the conduct of the works to contractors of inferior standing, with little or no capital, the evil of "sweating" was admitted. Very often, too, the business people who supplied stores and materials were unable to obtain payment for them, and not seldom the workmen also failed to receive the full amount of their wages. The result in some cases was that, instead of the expenditure proving a great boon to the district in which the works were situated, as would have been the case if the contract had been well managed and properly carried out, such contracts frequently brought disaster in their train. The anomaly of the principal contractor making a large profit, his sub-contractor being ruined and his workmen left unpaid, also occasionally presented itself, and thus the taxpayer who provided the money had the mortification of seeing one man made rich (who would perhaps take his riches to Europe or America to enjoy them) and a number of others reduced to poverty, or in some instances cast upon public charity.... The co-operative system was designed to overcome these evils, and to enable the work to be let direct to the workmen, so that they should be able, not only to earn a fair day's wage for a fair day's work, but also to secure for themselves the profits which a contractor would have otherwise made on the undertaking.... The work is valued by the engineer appointed to have charge of it {108} before it is commenced, and his valuations are submitted to the Engineer-in-Chief of the Colony for approval. When approved, they constitute the contract price for the work; but they are not absolutely unchangeable as in the case of a binding, strictly legal contract. It frequently happens under an ordinary contract that work turns out to be more easy of execution than was anticipated, and the State has to see its contractors making inordinate profits. Sometimes, on the other hand, works cost more than was expected; but in most cases of this kind the contractor either becomes a bankrupt, so that the State has, after all, to pay full value for the work, or, if the contractor happens to be a moneyed man, he will probably find some means of getting relieved of a contract, or of obtaining special consideration for his losses on completion of his work. Under the co-operative system, if it is found that the workmen are earning unusually high rates their contracts can be determined, and be re-let at lower rates, either to the same party of men or to others, as may be necessary. Similarly, if it is shown, after a fair trial of any work, that capable workmen are not able to earn reasonable rates upon it, the prices paid can, with the approval of the Engineer-in-chief, be