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"A." Some objections were, however, raised in the course of the local negotiations to this proposed consolidation for certain purposes of the local vessels with the Imperial fleet, a feeling being expressed that the Australian Colonies should not divest them- selves of their authority over the local harbour defences, which are closely connected with the land fortifications.

And in the meantime the subject had been reconsidered at the Admiralty with the result that certain modifications were introduced into the original proposals.

3. The revised scheme as thus settled was dated the 9th of September 1885, and is marked "B" in the Appendix.* It was at once forwarded to Rear-Admiral Tryon. In this scheme the subject of local defences for the principal harbours (including in this term the torpedo boats and other vessels maintained by any Colony for the special pro- tection of its own ports) was regarded as a purely Colonial question, and the suggestions made by the Admiralty were accordingly directed to the question of providing efficient protection by means of an increase in the strength of the squadron for the floating trade. For this purpose it was proposed that five vessels of the Archer" class and two sea- going torpedo vessels should be provided, the whole cost of construction, maintenance, and repairs, and also of exchanging the officers and crew every three years, to be borne by the Colonies, and the vessels to be entirely under the Commander-in-Chief, being employed in peace time in the usual routine duties of the station, and in time of war for the protection of the floating trade in Australasian waters. It was suggested that this arrangement should be made for a term of 10 years, at the end of which time the vessels were to become the property of the Colonies, and it was stated that it would be distinctly understood that the Imperial naval force in Australia was not in any way to be reduced in strength in consequence of this addition of vessels for the protection of trade in Australasian waters.

remark that if these proposals were accepted the Admiralty I may undertook to place nine naval cadetships annually at the disposition of the Colonies.

4. The cost of constructing and maintaining these seven vessels was computed and stated in this scheme; but Rear-Admiral Tryon doubted the accuracy of all the figures, and accordingly a revised estimate," which was communicated to this Department on the 1st of June 1886, was sent out. The cost of an "Archer vessel, fully equipped, was set down at 106,4867, the annual maintenance at 25,4561.; the cost of a sea-going torpedo vossel at 46,729, the annual maintenance at 11,0291. Thus five "Archer" vessels would cost 532,4307., and two torpedo vessels 93,458., and the total cost of the seven vessels would be, approximately, 625,8887. The total for maintenance would be about 149,338, but in time of peace probably two of the five "Archers," and one or both of the torpedo vessels might be kept in reserve, in which case the annual cost would be greatly reduced. The estimated expense of sending out and bringing home the new and old crews once in every three years is included in the above figures.

5. Rear-Admiral Tryon accordingly resumed negotiations on the basis of this scheme, and in a letter (marked "C" in the Appendix), dated the 24th of December 1885, and addressed to the Governors of the Colonies, he enumerated the leading features of the proposals. Efforts were then made to get together a conference of the Premiers of the Colonial Governments, attended by such of the Governors as could arrange to be present, to consider the revised scheme, and to endeavour to arrive at a common course of action for all the Australasian Colonies. Some difficulty occurred before this meeting could be arranged, as an opinion was expressed in some quarters that it would be preferable to submit to the respective Parliaments a scheme coming from the Secretary of State. Eventually a meeting was held on board H.M.S. "Nelson," at Sydney, on the 26th and 27th of April 1886, of the Premiers of New South Wales, Queensland, and Victoria, and Rear-Admiral Tryon, and replies on the subject from the Colonies not represented were read.

6. The arguments in favour of the proposed scheme and of joint action were set forth in a memorandum by the Rear-Admiral, dated the 24th of April 1886, and marked "D" in the Appendix. The Premier of Tasmania and the Governor of West Australia sent letters expressing opinions in favour of paying interest on the cost of the proposed vessels, and the Premiers of New South Wales and Queensland favoured this plan, though the Rear- Admiral expresses a conviction that both were prepared, if necessary, to pay the cost of construction. The Premier of New Zealand wrote that the Colonial Government would recommend an annual payment of 20,000l. to be expended in strengthening the naval defence of New Zealand. (see post). The Premier of Victoria insisted that, while the Colonies might pay for maintenance, the Admiralty should pay for the entire cost of the

• NOTE. In the copy printed in the Appendix the figures are given as subsequently corrected.

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construction. The Premiers of New South Wales and Queensland both stated that they were prepared to bring before their respective Parliaments the measures necessary to carry the proposals into effect.

7. Extracts from the report by Rear-Admiral Tryon of the proceedings at this meeting are printed and marked "E" in the Appendix, and the papers sent from Tasmania. Western Australia, and New Zealand, in reply to his letter of the 24th of February 1886. are added at "F,"" G," and "II." The negotiations which ensued after the meeting are reported in the four letters to the Admiralty from Rear-Admiral Tryon, dated respec tively the 30th of May, the 5th of June, the 13th of June, and the 20th of July, which are printed with their several enclosures and marked 1," "J," "K," and "L."

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8. It will be observed from these papers that New South Wales, Queensland, and Tas- mania adhere to the proposal that the Colonies should pay a per-centage-five per cent. being suggested-on the first cost of the vessels, and should bear all the expenses of main tenance; the agreement to last for 10 years and to be determinable at the end of that time or at the end of any subsequent year by notice given three years previously, viz., at the end of the seventh or any subsequent year. The Government of Victoria, on the other hand, maintained that the vessels should be constructed, equipped, manned. and despatched by the Imperial Government, the Colonies maintaining them from the first hour they are in a position to be placed in commission as effectives. This view was opposed by Rear-Admiral Tryon, who pointed out that any enlargement of the squadron leads to increased expenses which fall on the Imperial Government, in the depots and in adininistrative work, and referred to the money recently spent on Spectacle Island, Garden Island, and Woolloomooloo. It may be added that the additional force would entail the training of an extra number of boys for the Navy, and that the whole cost of such training, together with the prospective cost of pensions, &c., would fall on Imperial funds.

9. The attitude of the New Zealand Government with regard to this question requires a special reference. The geographical circumstances of that Colony appeared to the Government to make the question of its naval defence distinct from that of the defence of the Australian Continent, and accordingly they have throughout the negotiations contended that one or more vessels of war should be kept stationed in New Zealand ports. Early in 1885 they proposed that the Imperial Government should provide an armed cruiser for the special defence of New Zealand, offering to pay interest at the rate of 3 per cent. on the original cost, and two-thirds of the cost of maintenance. 'The Admi- ralty objected to this on the ground that the defence of all the Colonies, including New Zealand, would be best secured by a combined fleet acting under one command. Com- plaints were then made that the Colony had been left unvisited and unprotected by the squadron, and much correspondence took place on this question and on the proposed detached vessel. Rear-Admiral Tryon argued that the defence of New Zealand might best be conducted at some distance from that Colony, and that, in fact, one ship would not suffice to guard the 3,000 miles of coast which New Zealand presents. On the scheme for an increase of the squadron being laid before the Colonies the New Zealand Government offered to recommend to Parliament an annual contribution of 20,000/ if two ships were permanently assigned to a separate station, which would include New Zealand, Fiji, and some of the eastern Islands. The Rear-Admiral replied that this sum would not be sufficient for the purpose, and the Colonial Government then stated that, if the cost on a peace footing could be shown to exceed their estimate of it, they would be prepared to ask for a moderate increase on the sum of 20,000/.

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10. It is an obvious reflection upon this controversy that the Admiralty scheme is one for the protection of the floating trade of the Colonies, and is not intended to supersede or render unnecessary such efforts as have been made in some of the Colonies to provide themselves with armed vessels adapted for the defence of their respective harbours. is not denied that the defence of a Colony might have to be undertaken rar from her shores, and the advantages, in point of efficiency and economy of a combined fleet, pointed out by Rear Admiral-Tryon, have not been impugned. Attention may be drawn to the following passages in a memorandum by the Premier of New Zealand on the subject: "In time of war the extra ships would of course be at the absolute discretion of the Admiral, to be placed in such a position as the authorities might consider most suitable "for the defence of the shipping and ports. Ministers recognise the force of the "observation of Admiral Tryon that the best defence of New Zealand might in time "of war be far distant from her shores. In time of peace, however, Ministers consider "that some port in this Colony should be the established head-quarters of at least two vessels of the fleet." If the New Zealand Government concede that in time of war

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