First, that its principal duty is to assist in the extension of sound undertakings with proved good management which are deferring well-thought-out plans of extensions or new works owing to the difficulty of raising money on reasonable terms under present abnormal conditions. It does not feel that it is called upon to recommend a guarantee in cases of a speculative nature for which, even in normal times, the promoters would have found difficulty in raising money. Nor does it think that it ought to recommend guarantees to relieve undertakings from financial embarrassments incurred through lack of ordinary commercial foresight on the part of those responsible for their management. A guiding rule is that the Government’s liability should be as small as possible, and that a good commercial Security should be obtained in every case. In the second place, the Committee, realizing the gravity of the unemployment problem and the demoralizing effect of the continued receipt of doles, prefers those schemes which can be put in operation immediately rather than schemes which would take some considerable time to mature. In the third place, the Committee favours schemes of public utility. These fall into two classes. In the first place, there is a public utility undertaking as ordinarily understood, i.e. a corporation working under statutory powers and not trading for profit. In the second place are the companies, such as railway companies, which carry out an indispensable national service, and which in actual practice cannot earn excessive dividends for their shareholders. The reason for this preference has been partly the direct benefit to the general community from the improved facilities for the public thereby rendered possible, and partly the feeling that the guarantee could more properly be given to undertakings in respect of which it was unlikely that Government assistance would result in the earning of a large profit for private promoters and shareholders. In the fourth place, the Committee insists that all contracts must be on the basis of competitive prices. It feels that it would be wrong for the Government guarantee to be given in any case in which an unreasonably high price was going to be paid for the materials. Not only would such a course be unjust to the taxpayer by making the Government responsible for money going, not into wages and materials, but in paying high profits to manufacturers; it would be against the best interests of the country as a whole, since it would be impeding the return to a level of prices on which this country could meet foreign competition. Difficulties of the Committee