The following courses now appear to be open:-

1. To inform the Six-County Authorities that negotiations can only be continued on the basis of an All-Ireland Transport Authority.

   It would then be open to the Six-County Government and the G.N.R. to proceed to effect economies over the whole system. These economies would, doubtless, be put into effect without prior notice or consultation with us if we were not giving any assistance to the Company. This would involve difficulties here in giving effect to the assurances given in reply to the various questions asked in the Dáil. It would destroy any prospect of co-operation between the Governments in regard to the transport problem and possibly in regard to other matters of common concern. It may be taken for granted that the Six-County Authorities would give their own account of the history of the negotiations and of their efforts to secure the co-operation of the Government of the Republic.

2. To proceed with the negotiations with the Six-County Authorities on the basis of
   1. subsidy;
   2. lease;
      or
   3. acquisition,

   on the understanding, if such an understanding can be secured, that the Six-County Authorities will agree to consider an All-Ireland Transport Authority as an ultimate solution.

   Subsidy would appear to be the least expensive for the immediate future. It also offers the simplest immediate remedy for an urgent and complicated problem. Any of the three courses mentioned in this sub-paragraph involve continuous co-operation and consultation between the two Governments with the possibility that ultimately the way might be found to the establishment of an All-Ireland Transport Authority.