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suggest. It is possible that there might not be sufficient work in Malta alone for such an officer. In that case the question of the appointment of one officer for the British Colonies in the Mediterranean might be considered, an arrangement which has much to recommend it.

4. There can be no question as to the correctness of the committee's observa- tions as to the establishment of coaling agencies at Malta under enemy influence or control. Their suggestion, however, as to the holding out of inducement to British shipowners to make Malta their bunkering port is affected by considera- tions of naval and military strategy to which the interests of Malta must be entirely subservient. The present War has demonstrated the importance of Malta from an Imperial point of view as a port at which fuel, water, and other supplies can be obtained by shipping, and it is unnecessary to observe how greatly its importance in this respect might have been enhanced had the belligerents been differently grouped. If Malta is a necessary link in the chain of Imperial communications under war conditions, its maintenance during peace time as a station where coal, oil, and other supplies essential to transport can be readily obtained is apparent, and one cannot but hope that the provision of such facilities will not be left to the caprice of private enterprise, but will form part of a general Imperial scheme of transport under State control. State-aided transport has, as the committee point out, proved a potent factor in the development of German commerce. Imperial Government has now assumed such general power of control over sea borne traffic that the adoption of a policy which would ensure for British trade transport advantages at least as great as those employed by their German and Austrian rivals should not present great difficulty.

The

5. The remarks of the committee as to the development of German and Austrian trade with Malta through the Parcel Post, and the apparent advantages of the Continental postal rates for parcels as contrasted with those between England and this Colony appear to merit consideration, and will, I trust, receive the attention of the Post Office authorities.

6. Part 3 of the committee's report (paragraphs 34 to 130) have an indirect bearing only on the question at issue, being concerned with the general subject of Malta trade and industries. I had intended to forward with this despatch the relevant portions only of the report. but the report is one which I cannot but regard as a document of great value, and it seemed to me, on further considera- tion, that it would be better to submit it as it stands now, and to address you later in connexion with the various measures suggested according as action seems practicable or desirable. The committee have put forward many suggestions for the development of our resources which deserve consideration, a good number of them new, some of them already familiar to you from the Report of the Royal Commission, as well as other reports, and with most of these suggestions I find myself in agreement. War conditions and lack of funds may make it necessary to defer action in the case of several of these proposals; but there are others, such as the establishment of a Board of Agriculture, Fisheries, and Industries, improvement in conditions of land tenure, assistance to local industries, and the replacement of the middleman by co-operative societies, which do not present the same reasons for delay, and as to which I trust to be able soon to report that the initial steps have been taken.

I have, &c., METHUEN, Field Marshal,

Governor.

Enclosure 1 in No. 36.

LIST OF COMMITTEE APPOINTED BY HIS EXCELLENCY THE GOVERNOR ON THE 14TH NOVEMBER, 1916.

MR. LUIGI Apap.

THE HONOURABLE F. AZZOPARDI, L.P.

THE HONOURABLE R. J. BRIFFA, Collector of Customs.

MR. ANTONIO CASSAR TORREGGIANI.

THE HONOURABLE L. FALZON.

COLONEL J. L. FRANCIA, M.V.O.

MR. WILLIAM Gollcher. MR. H. L. W. HARE. MR. JOSEPH HOWARD.

DR. G. F. INGLOTT,

THE HONOURABLE DR. E. Mizzi.

JUDGE A. PARNIS, LL.D. (Chairman). MR. F. W. PATERSON.

MR. T. C. SMITH,

THE HONOURABLE J. ZAMMIT, L.P.

MR. O. SAMMUT (Secretary).

YOUR EXCELLENCY,

Enclosure 2 in No. 36.

Commercial and Industrial Committee, 20th June. 1917.

to the steps, if any, that should be taken to secure consideration of any circumstances affecting the interests of Malta at a representative conference which is to consider the commercial and industrial policy of the British Empire after the War, with special reference to the Circular despatch of the Secretary of State for the Colonies, dated the 25th September, 1916, and to the enclosures accompanying the same, and have the honour to submit the following report, dealing with:-

WE, the undersigned, were appointed to advise Your Excellency as

1st. The special advantages and considerations that the particular circum- stances of Malta require from the Imperial or Colonial Governments.

2nd. What was German trade and influence in Malta before the War, the measures to be taken to avoid a recurrence of the dangers to which the Colony may have been exposed by the growth of German trade and influence, and how such trade could be substituted by British, Colonial, or Allied trade.

3rd. To what extent and by what means the resources of Malta should be developed.

PART 1.

Preliminary.

1. We are strongly in favour of any system of preferential trade or customs union within the Empire, and ask Your Excellency to lend your support to any such system as may be adopted by the Imperial Conference ensuring to Malta the same advantages and considerations as may be secured by other parts of the Empire. 2. We suggest that Your Excellency assure the Secretary of State for the Colonies that any prohibition or restriction on enemy trade that may be decided upon will be gladly enforced in these islands to further British or Allied trade whatever be the material loss that may ensue.

3. Although the resources of the island are very limited, the people of Malta must be and are prepared to bear their proportionate share of the burden of the Empire.

4. Your Excellency should impress upon the Secretary of State for the Colonies the necessity of removing any prejudice or misunderstanding that may exist to the detriment of the inhabitants of these islands in any of His Majesty's dominions (vide paragraph 41).

PART 2.

German and Austrian Trade and Influence.

5. Coaling of Steamers.-In 1911-12 the Deutsche Kohlen Depot was estab- lished in Malta. The general idea is that it was a company subsidized by the German Government, and there can be no doubt that its establishment in Malta greatly increased German influence.

6. The bunkering of ships in Malta is a very important source of employment, and therefore influence would be extended by the employment of a large number of persons in connection with the Deutsche Kohlen Depot. German and Austrian influence, but more particularly the former, which was already extensive through the Deutsche Levante Linie and the Adria, the latter company, as is bereafter