As Chairman of the Dingwall and Skye railway he effected a merger with the Highland railway on 2 August 1880. The result was that his concern held sway over the network across the highlands from Inverness to the sea at Skye. On 15 May 1882 he was created a Baronet, of Lochalsh in the County of Ross. When the Napier Commission arrived in 1883-4 for an extensive tour of the affected areas in the Highlands, they were met by Matheson at the Kyle of Lochalsh. The Crofters Holdings Act 1886 enfranchised the tenantry for the first time entitling them to be included in the settlement south of the border; an unprecedented Crofters Party was formed to stand for Parliament.