CO885-(25-26) — Page 580

531

PUBLIC RECORD OFFICE

Reference :-

SEPERTI CO.885/25

PUBLIC RECORD OFFICE, LONDON ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NUT TUI

188

(b) Nauru and Ocean Island in the Pacific, with Christmas Island in the Indian Ocean, are the only deposits of high-grade phosphate within the Empire. (c) The large extent of the phosphate fields on Nauru, approximately 4,500 acres, practically all of which area can be worked without infringing on the coco- nut and other food-producing lands of the native population.

(d) The immense value of such a source of supply of this important fertilizer to the farmers of the Empire.

3. In enclosure 2 in the Secretary of State's despatch, four special questions are noted for consideration, which, I would suggest, are very relevant to the future of Nauru and its industry.

Briefly, these questions require the consideration of :-

(a) Industries essential to the future safety of the nation and steps to be taken to maintain or establish them;

(b) Steps to be taken to recover home and foreign trade lost during the War and the securing of new markets;

(c) The extent to which the resources of the Empire should, and can, be developed;

(d) The means by which the sources of supply within the Empire can be prevented from falling under foreign control and to what extent.

4.

With reference to the above, I venture to submit that, although the phosphate may not be essential to the safety of the Empire, it would prove of immense value in enhancing the productiveness and consequent prosperity of the farming districts of the United Kingdom, Australia, New Zealand, etc. With the increased production of wheat, for example, the exports of a country such as Australia must increase, and in this manner provide a larger surplus available for the use of countries which are largely dependent upon imported supplies. These countries in return will export other commodities in payment for the wheat, and it may be expected that the United Kingdom will in the future not only increase her own wheat production, but make good her deficiency from countries in the Empire instead of a neutral country, such as the Argentine.

5. The value of the phosphate of Ocean Island and Nauru must conse- quently indirectly increase the resources of the Empire and the enlarged output from Empire countries of one of the essentials of life (wheat) must help to recover lost markets and secure new ones in the future. It is, I believe, a fact that German agriculture is suffering from the need of phosphates, and it is assumed that other European countries affected by the War must also be similarly situated, though perhaps in a lesser degree. I presume that a general prohibition of exports to enemy countries will not be enforced after the War, but considering the value of high-grade phosphate and the limited supply in the Empire, it is to be hoped that at least the requirements of the British Empire and the Allies will first be met; even if the export to enemy countries is not totally prohibited. As Germany has no supplies of phosphate within her own territories in Europe, the control of the sources of supply is feasible.

6. Notices have appeared in the London Press to the effect that the enemy- owned shares of the Company operating on Nauru have been disposed of through the Public Trustee to British subjects, and the importance of the Nauru source of supply of phosphate and its need by Empire countries clearly point to the fact that any present enemy country must not recover any share in Nauru on the conclusion of hostilities. With Nauru incorporated in the British Empire its future administration cannot fail to be of supreme importance, and I trust that the following recommendation may be considered to be within the scope of this memorandum. I am encouraged to believe it may be so as the Secretary of State's circular requires "consideration of any special circumstances affecting the interests of any particular Colony or Protectorate."

7. I accordingly submit:-

(a) The deposits of high-grade phosphate within the Empire being limited, the sources of supply should be under Imperial control rather than under any one dominion;

(b) The sources of supply being thus under Imperial control distribution could be more easily controlled, if necessary:

(c) Ocean Island and Nauru being so close together, and with frequent com munication between each other, it is essential that the same administration should prevail on both;

169

(d) If Ocean Island were under Imperial control and Nauru administered by one of the dominions, difference would arise in local laws, rate of wages, etc., thereby probably leading to the dissatisfaction of the Oriental and Pacific Ísland labour on one of the islands;

(e) If Nauru was under the same administration as Ocean Island, greater economy of expenditure for the upkeep of the local Government would result.

8. To briefly summarize the above, it is recommended for serious considera- tion that:--

(a) Present enemy countries should not be allowed after the War to secure again any share in Nauru;

(b) The supplies of phosphate from Nauru should he conserved primarily for the farmers of the British Empire and then for Allied countries; and

(c) Nauru should be kept under Imperial control, and, for preference, under the same administration as Ocean Island, and that by these means one object of the Allies-viz., to increase production within their territories--will be con- siderably helped towards realization.

Pleasant Island (Nauru),

24th February, 1918.

G. B. SMITH-REWSE,

Acting Administrator.