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PUBLIC RECORD OFFICE

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Reference :-

C.O. 885

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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The SECRETARY OF STATE: Well, you have hitherto been able to do without putting new taxes upon the population, whereas we have been sompelled to place something like 27,000,000, of extra taxation upon the whole community of this country.

made

Then I come to one other comment, a general comment which on behalf of all the Colonies, that in making a comparison we ought to take account of the expenditure of the Colonies upon public works at home. It is said we have not spent a penny upon railways. I am prepared to say that I wish very much we had, because if we had taken up the railways ourselves from the first, we should now have been deriving a large income from them which would have reduced the taxation of our people, and you no doubt do regard all this expenditure not as a loss, but as an investment, and when Mr. Seddon, for instance, speaks of the population of New Zealand as bearing 5. per head for old age pensions, I must remind him that they get it back in that form, whereas for the military and naval defence of the Empire, of course, we get nothing back except the general security of the whole Empire. All these things, I am sure, I may be allowed to say, When I was can- remind me a little of a personal experience of mine. vassing the other day for the great University of Birmingham, I went to a very wealthy friend of mine to ask him for a large contribution. I was told by him, that the fact was that he had just been building a very large house and that the cost of that had been so much beyond anything that he had expected that lie really was unable to afford me any contribution.

Sir EDMUND BARTON: Did he say it was a guest house?

The SECRETARY OF STATE: I am sure yon will readily understand that I do not speak so much to those who are representatives here as I speak through them to their population, who want, I consider, a certain amount of education upon this subject, and what I should say, if I were speaking in Australia or in Canada at the present moment is this:-What would you do, where would you be, if you were absolutely independent nations? In spite of what you are spending for old age pensions, and railways, and all those other things, you would have to spend a vast deal more than you are spending to make an adequate, or any kind of proportionate, preparation for your own defence. To a large extent your liability is relieved by the action of the Imperial Government; but I am quite sure that recognizing this fact you would be prepared to meet us in as generous a spirit as is possible.

Now I come to the question of further progress. I think it is perfectly evident that the first point is to deal with such a memorandum as has been placed before us with regard to the naval provision in Australian, waters. The facts are these. There is a squadron there provided for under an existing agreement. It is admitted that the squadron is altogether inadequate and quite insufficient for any modern purpose.

Mr. SEDDON: Hear, hear.

The SECRETARY OF STATE: It is clear, therefore, that the squadron should be greatly improved in its character, and, as I understand, both Mr. Seddon and Sir Edmund Barton, although they cannot promise to do all that is asked of them, or to make any large contribution, are prepared to consider what shall be the exact composition of the new squadron and how far they would be prepared to increase their present contribution That for the purpose of having an improved fleet in Australian waters. is a question in which the rest of the Conference can hardly be said to be interested. It is entirely personal to Sir Edmund Barton, Mr. Seddon, and the First Lord of the Admiralty. I would suggest, therefore, as the first practical step towards a general conclusion, that we should ask those three gentlemen to make an arrangement and to discuss this matter in private and to come to us-as I hope they will-with some settled conclusion. Then I take it we shall follow that up by a similar conference between Sir Wilfrid Laurier, and any members of his Ministry whom he would desire to associate with him, and the Admiralty with regard to the situation in Canada. And again Sir Alfred Hime and Sir. Gordon Sprigg can deal

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separately with the question as it affects their two colonies, and in that way. I think, when we get reports of these interviews-these private interviews we shall be in a position to see how far it can be embodied in anything like a general resolution, or how far wo shall have secured, a general result by these separate negotiations. If the Conference can adopt that suggestion, I would say that, in my opinion, it would be undesirable that we should go on at once with any discussion with regard to the military defence of the Empire. That is partly a question of expenditure. I believe it is principally a question of organisation; but at all events I think it would be convenient that we should know exactly what is going to be done with regard to naval defence before we take up another-although a kindred-subject. And under those circumstances what I propose to put forward for consider ation is that at the next meeting we should leave defence, and take up the question of commercial relations. The next meeting will be on Tuesday at 11 o'clock if that is agreeable.

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The FIRST LORD OF THE ADMIRALTY : I may say I entirely concur in the proposal you have made. The sooner we can make appointments with the different I'rime Ministers and Ministers concerning the matter the better. I do not propose now to take up the different points such as Mr. Seddon and others have raised, because the time is already far advanced. think I can make an exception in the case of the Representative of the Colony of Natal and say that I do with great pleasure accept the proposal which Sir Alfred Hime has made on behalf of Natal, which, if I may be allowed to say so, is a very distinct advance. There is only one further point upon which I would make a remark, and that is with reference to the point Sir Wilfrid Laurier raised, and with which Mr. Chamberlain has partly dealt. It is not accurate to say that the United Kingdom spends no money on public works. I have not mentioned in the memorandum I bave circulated that the House of Commons has for naval works alone and in addition to the annual estimates authorised a present loan expenditure of 27,000,000/. and I would desire also to remind the Conference that the British taxpayer by no means gets the benefit himself of all the expenditure for which he pays. A large proportion of naval expenditure is not spent in the United Kingdom at all; a large portion is spent actually in the Colonies. In Sydney, Halifax, Cape Town, the naval expenditure is large; at Cape Town, for instance, the House of Commons has authorised the construction of large docks.

Sir GORDON SPRIGG: Simons Town.

The FIRST LORD OF THE ADMIRALTY : Yes; in Cape Colony I

meant.

Sir GORDON SPRIGG: Yes.

The FIRST LORD OF THE ADMIRALTY: In Simons Town, and this is an expenditure which, though it is for the advantage of the Empire, is not to the personal advantage of the British taxpayer who has to pay for it. but of the Cape Colonist who does not.

Adjourned till Tuesday next at 11 a.m.

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