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with their passengers on board indefinitely. He could not believe that the danger was anything like so serious as was represented.
PRINCE LOUIS OF BATTENBERG pointed out that orders could now be transmitted by wireless telegraphy to ships on the high seas, The Admiralty had reason to believe that it was intended to land passengers at Trondjhem, in Norway. German liners were now to be found in the South Atlantic, in the China Seas, and in Australian waters.
THE PRIME MINISTER said that Mr. Austen Chamberlain's Committee had examined the naval aspects and had rejected any form of national guarantee as a remedy, and he suggested that that was the basis from which they should start.
MR. CHURCHILL agreed. The contention of the Admiralty was that the factors in the naval situation had changed, and that in present circumstances the percentage of losses would be higher, and that public apprehension would be greater. Rates for war insurance would rise rapidly, and as the market for these risks was a small and diminishing one, it was probable that vessels would very soon become uninsurable. The Admiralty view was that the consequence of this would be that shipowners would not send their ships to sea. There would be a general cessation of trade and a sharp rise in prices, which might lead to such internal difficulties as to force us to conclude an early peace on disastrous terms. The opponents of any national guarantee admitted the probability of a great rise in insurance rates, but pointed to the equal probability of a great rise in freights, sufficient in fact to tempt vessels to sea, whether insured or not. But it was that very condition and its results which they desired to avoid. High freights meant high prices, great suffering, internal disorder, and a state of affairs fatal to the successful prosecution of the war. If the Committee of Imperial Defence and the Cabinet thought these views were illusory, and that the matter were better left alone, the Admiralty had nothing more to say. Internal order was not their affair. Their duty was to beat the enemy's Fleet. They could not guarantee the immunity of our commerce from attack. As showing the probable action of shipowners on the outbreak of war he would read to the Committee a confidential communication recently received at the Admiralty from the Royal Mail Steamship Company.
Sir,
December 13, 1912.
"In considering the position of large passenger vessels in time of war the question has arisen "whether some instructions should not be issued to the masters of such vessels as to the steps to
be taken by them on hearing of an outbreak of war.
"
2. 1 therefore beg to request that the Lords Commissioners will be so good as to favour me "with their views as to the course of action to be adopted by a master under the above-mentioned "circumstances.
46
++
M
13
"
*+
.
3. I have prepared a draft circular of instructions to the commanders of steamers under my control, a copy of which I send you herewith, and I should be very glad to learn whether
the Lords Commissioners of the Admiralty consider that the course suggested therein would be
the best to adopt in order to ensure the safety of the ship and cargo, or, if not, what procedure they would advise.
4. I should also be glad if their Lordships would inform me whether the position of a merchant vessel claiming the protection of a neutral port would be prejudiced by the fact that she was armed.
"I have, &c.,
" (Signed)
OWEN PHILIPPS, Chairman.”
(Confidential)
THE ROYAL MAIL STEAM PACKET COMPANY.
L
Draft Circular.
“18 Moorgate Street, December 1912. The Management have had under consideration the question of issuing instructions to Commanders regarding the steps they should take to secure the safety of their ships in the “ event of their learning at any time of the commencement of hostilities between Great Britain and some other first-class Naval Power; and while there is fortunately no ground for anticipating any such occurrence at the present time, it is considered desirable to give directions on the subject now rather than wait until a political crisis suggested the advisability of some action being taken, which at such a time might tend to arouse unnecessary alarm.
A
**
You will accordingly be good enough to take it as a general and definite order that should ** you ever, in the course of a voyage, learn of an outbreak of war such as is indicated above, you are, if not at the time within easy reach of a port in the United Kingdom, to make without
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