12 per cent. less than the comparable rates in force on the 31st October, 1927. In the opinion of Your Committee either scheme proposed by Sir Josiah Stamp and Sir Alfred Read (apart from the possibility of increased or reduced cost to the Government) presents certain obvious advantages over the proposed Contract with Messrs. MacBrayne. Both schemes provide for

(1) the building of four ships within two years, instead of three within five years;

(2) for the complete linking-up of the Railway and steamship services;

(3) for the reduction, not only of freights both outward and inward, instead of inward only, but also of passenger fares, by an amount which averages 10 per cent. on the whole estimated revenue from these sources; and

(4) the possibility of through rail and sea rates for goods and passengers.

9. The two schemes submitted to your Committee by Sir Josiah Stamp and Sir Alfred Read have not been supported by any details, and it has not been possible, therefore, to make any analysis of the figures upon which the schemes are based. Your Committee were faced with the urgent necessity of producing their report before Parliament is prorogued. As no proposals for a service were submitted to them, their attention was devoted in the limited time available solely to the endeavour to obtain from the London, Midland and Scottish Railway and the Coast Lines jointly a draft of a scheme for submission to Parliament the merits of which could be examined in detail by the Secretary of State for Scotland after the presentation of this Report.

Your Committee, therefore, for the reasons stated, do not feel competent to indicate a definite preference for either of the schemes submitted, except to say that Scheme No. 2 appears to be the more comprehensive.

The waterways linking the Western Highlands and Islands of Scotland with the mainland are the lines of communication upon which the livelihood and welfare of the inhabitants depend, and it is the opinion of your Committee that this important consideration should be borne in mind when the Government are considering the schemes now submitted, so that, whichever may be accepted, these remote parts of Great Britain may be assured of a regular and efficient service at reasonable rates both for freights and passengers.

In the opinion of your Committee both schemes merit the close and immediate attention of His Majesty's Government. They would strongly urge that a definite decision be taken without delay, as both schemes involve the purchase of the business, assets and goodwill of Messrs. MacBrayne, and it is not reasonable to expect that negotiations with this end in view can be unduly delayed.

10. It may be appropriate to consider what courses are open to His Majesty's Government should these proposals not be accepted. The first course is that the Government should publicly advertise for tenders for the maintenance of these services, a proceeding which, in view of your Committee's experience, is unlikely to have any fruitful result. The second course is that they will be compelled once more to approach Messrs. MacBrayne as suitors with the request that they should withdraw their intimation of retiral and resume the existing services. This would probably involve the demand for a larger subsidy than that provided for in the proposed Contract, and would arouse the same kind of criticism as was aroused when the proposed Contract was submitted this year to the House of Commons. The third course is that the Government should assume entire responsibility for sea transport in the Western Highlands and Islands of Scotland, thus involving itself in the maintenance of a service of steamers owned and managed by the State.

11. Your Committee enquired from Sir Josiah Stamp and Sir Alfred Read as to the position of Messrs. John McCallum and Co., and Messrs. Martin Orme and Co., and of any other firm which might wish to be associated in the joint undertaking, and they were informed that any representations from local and existing interests would receive all sympathetic consideration.

12. Your Committee, though they were given power to hold sittings in Glasgow, found that all the time at their disposal was occupied with these important negotiations, and therefore had not time to hear witnesses from the Western Highlands and Islands either in London or in Glasgow. They accordingly invited the public bodies of the various localities interested as well as any individuals to send them full written statements of evidence setting forth all complaints and grievances existing under the present services and suggestions for improvement in the future. This has resulted in the reception of an ample body of documentary evidence which will be appended to this Report, and which your Committee recommend to the careful consideration of the Government with the object of removing, wherever practicable, the most obvious causes of discontent.

13. Finally, while it may not be strictly within your Committee's terms of reference, they feel it desirable to refer to the question of piers and landing places in the various ports, which in many cases, it is said, are in disrepair and do not pay their proprietors the bare expense of upkeep. It might well be a matter for serious consideration whether these could not he brought under the control of the local authorities, who could then, through the Ministry of Transport under the Ministry of Transport Act, 1919, obtain the necessary assistance to maintain in an efficient state these indispensible adjuncts to a satisfactory system of communications.

24th July, 1928.

Mr. ROY WILSON was called to the Chair.

The Committee deliberated. It was resolved that a notice should be issued to the Press inviting persons or bodies desirous of submitting evidence or of appearing before the Committee to send a written summary of the evidence they desire to submit to the Clerk.

[Adjourned till Thursday, 21st June.

Mr. P. R. Laird, Scottish Office, and Mr. A. R. Kidner, Post Office, were examined.

Sir Josiah Stamp, G.B.E., President of the London, Midland and Scottish Railway Company, and Mr. J. Calder, General Manager, Scotland, of the London and North Eastern Railway Company, were examined.

[Adjourned till Tuesday, 3rd July.

Sir Alfred Read, Managing Director of Coast Lines, Ltd., was examined.

Sir Josiah Stamp, G.B.E., and Mr. J. Calder were further examined. The Committee deliberated.

Sir Josiah Stamp, G.B.E., and Sir Alfred Read were further examined.

[Adjourned till Tuesday, 24th July.

Draft Report, proposed by the Chairman, brought up, and read the first time, as follows:

1. Your Committee were appointed on the 13th June to consider and report upon the Contract, dated the 2nd and 11th days of April, 1928, between the Postmaster-General and David MacBrayne, Limited, and to consider any alternative scheme whereby more adequate provision could be made for the maintenance of certain cargo and passenger sea services in the Western Highlands and Islands of Scotland, and for the conveyance of mails by certain of the vessels so employed. They have held seven sittings, and examined five witnesses.

2. At the first meeting of your Committee, at which evidence was given by Mr. P. R. Laird, of the Scottish Office, and Mr. A. R. Kidner, of the Post Office, it became clear that since the Motion for the appointment of your Committee was first put down, Messrs. MacBrayne had intimated to the Secretary of the General Post Office their retiral from the proposed Contract, though they were willing, if desired, to carry on the existing service until the 31st October. After fully hearing the evidence of the Scottish Office and perusal of the correspondence with Messrs. MacBrayne, which was handed in by Mr. Laird, your Committee came to the conclusion that Messrs. MacBrayne's intimation was seriously meant, and that they did not wish to carry on the services any longer. Your Committee decided, therefore, not to proceed with the first portion of their terms of reference, namely, the detailed consideration of the proposed Contract with Messrs. MacBrayne, thinking that to spend valuable time on such an examination would serve no useful purpose.

3. Your Committee then found themselves faced with a situation which is an unusual one for a Select Committee. Their instruction to consider any alternative scheme whereby more adequate provision could be made for the transport service in question now amounted to an instruction to enquire whether any alternative Contract could be made, and with what firm or firms. They therefore issued to the Press, after their second meeting on the 21st June, the following notice :

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Western Highlands and Island Committee. At a meeting of the above Committee held at the House of Commons on the 21st instant, it was reported that Messrs. David MacBrayne, Ltd., had given notice of their retiral from their Contract with the PostmasterGeneral, dated 2nd and 11th April, 1928, for the maintenance of certain cargo and passenger sea services in the Western Highlands and Islands of Scotland. The Committee therefore invite any firms or Companies who may be desirous of submitting any proposals for the maintenance of the said services to communicate with the Secretary of the Committee."

This notice did not result in the submission to the Committee of any comprehensive offer by any firm that would cover the whole of the Services. In these circumstances it seemed desirable to the Committee to prosecute a further search on their own account; and the direction in which they moved was suggested by certain evidence given by Mr. Laird, from which it appeared that the Departmental Committee of the