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Government or by panic. Of these, however, all but the quite poor, whose deposits would be trifling and therefore could be met out of the ordinary cash balances of the banks, would prefer to take their money in bills on London or New York for the sake of security, portability, and facility of exchange.
"In the case of the Savings Bank, whose deposits are almost entirely invested in England, payment by English bills would be particularly easy.
"As regards the means of cashing the Treasury Bills, which would then be drawn to an unusual amount, the local bank managers may he trusted to provide these in their own interests; and in the last resort supplies of either cash or kind could be remitted from England, or be obtained from passing vessels in exchange for bills.”
10. Page 4, paragraph 12.-The correspondence mentioned in this paragraph on the subject of the payment for flour obtained in case of the outbreak of war has been referred to the Colonial Defence Committee.
In a Colonial Office despatch (Gibraltar, No. 693, Secret), dated the 24th March, 1897, it was stated that the Governor would be authorized to arrange in his civil capacity for obtaining supplies of flour in time of war direct from America.
The Governor, in his reply, dated the 4th June, 1897, pointed out that if by this it was intended that payment should be made out of the local Treasury, this could not be done, as the necessary funds did not exist. "He could only pay for it by bills drawn on the Paymaster-General in the same way as for other warlike stores. In fact, it is in his capacity of Fortress Commander that he must obtain these or any other supplies needed for the defence of the Fortress."
The Committee would observe, in the first instance, that the reserve of breadstuffs now maintained in the Fortress is more than sufficient for the supply of the garrison for four months, and that any expenditure incurred in the purchase of flour on the outbreak of war would be with a view to making up the reserve for the civil population. Prima facie civil funds should provide for the civil population whether in peace or in war. If the funds in the local Treasury are insufficient for the purchase of the required supplies the Governor should pay for them by bills on the Crown Agents in London. If these bills entail an overdraft which the Crown Agents have no means of meeting, those Agents will appeal to the Secretary of State for the Colonies, and he will communicate with the Treasury as to providing for them by a loan or otherwise. This machinery will work just as promptly and effec- tively as an arrangement for drawing on the Paymaster-General, and will avoid a mixing together of civil and military transactions, and of Imperial and Colonial drafts.
Defence Scheme.
11. Page 9, foot-note; page 10, paragraph 2.—The Defence Scheme calls attention to the unfavourable defence conditions created by the Admiralty works now in progress, and especially to the facilities for surprise offered by the terreplein which is being formed by filling up the water space within the breakwater from the Ragged Staff to the New Mole.
The Colonial Defence Committee recognize the disadvantage arising from the new works, which it has been necessary to accept in view of the great advantages these works confer on the Fortress as a naval port. They understand that the matter has been and will be carefully considered by the Admiralty and War Office, so that the damage to the defensive power of Gibraltar may be minimized as much as possible. They consider that when the works are completed and the entrance to the harbour confined to two narrow openings, the danger of surprise will be small, and they concur in the arrangements proposed by the General to meet that danger under existing conditions.
12. Page 10, foot-note, and 2nd paragraph, page 12.-The question of the occupation of Linea was fully discussed by the Colonial Defence Committee in their Remarks, dated the 9th August, 1895, on the Defence Scheme revised to April of that year, and the Committee came to the conclusion that "Linea would be a most unsatisfactory position to hold in the presence of an enemy established on the Sierra Carbonera," and that the latter could not be occupied without a large increase in the strength of the garrison. The Committee, however, considered that, should circumstances render it desirable, there would be no objection to a detachment from the existing garrison
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