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Navy maintained by the British taxpayer. This being so, the right and wise policy for New Zealand is to make the best contribution she can to the general strength of the British Navy as the only weapon which can effectually protect her.

From this point of view the gift of the "New Zealand" for general service could not have been better. It is a valuable aid to the British Navy, and appreciably increases the margin of superiority upon which British naval supremacy depends. We have always loyally done our best to make the Australian arrangements a success. But the Admiralty cannot hesitate at all in expressing their strong preference for the method of naval assistance which has been adopted in the past by New Zealand. Useful as is the material reinforcement of this fine vessel, the moral effect, so important alike to our safety and our policy, is far greater. There is no other way in which the Dominion of New Zealand could for such a comparatively small expenditure of money have produced such a great effect on the British Empire or on the European situation.

We should regret any wish on the part of the Government of New Zealand to withdraw the battle-cruiser from the general service to which she has been dedicated. At the same time you should realise that you and your Government have only to express the desire for us to give prompt effect to it. It would be unnecessary, from the strategic point of view at the present time, to place the "New Zealand" on the China Station. She would not find there any vessel of equal strength belonging to any of the European Powers. The Japanese Navy, on the other hand, is out of all proportion to any force we should maintain in China waters during the continuance of the alliance, whether that force were strengthened by the addition of the “New Zealand" or not. If, however, you and your Government urge that the 1909 Agreement provided for the stationing of a battle-cruiser in China waters, and if this request is made to us, we will meet it as quickly as possible, and substitute the New Zealand for two of the armoured cruisers, the “ Minotaur " and one other now on the China Station, which are at present sufficient for the strategic needs of the situation.

I may point out that while the number of armoured ships on the China Station is at present

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