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that the mail steamers should cease to call at King George's Sound in the event of war. Such an announcement would obviously have been highly impolitic. Although it was necessary to consider beforehand what arrangements should be made in such a contingency it was never proposed that they should be carried into effect except upon the actual outbreak of hostilities. Nor, as you will since have gathered from my despatch of the 22nd May,* was it contemplated that the mail steamers should cease to call at King George's Sound without other provision being made for the West Australian mails.

2. With reference to the tenth paragraph of your despatch, I may observe that whilst King George's Sound will be without defences the other harbours referred to by you will be protected by land works, and when the mail steamer has reached them she will be secured from molestation. I may also observe that should war break out at any time, it would be easy to take the precaution of altering the advertised dates of arrival and departure.

3. I shall be glad to hear further from you respecting the proposal that the mail steamers shall in future call at Freemantle, but as it was made without reference to the question of what should be done in the event of war, it will be convenient to keep it quite distinct, and not to refer in dealing with it to the secret correspondence.

4. In the meantime I have brought the question to the notice of the Postmaster- General in a letter, copy of which is inclosed for your information.†

5. This subject is, however, one for the consideration, in the first instance, of those Colonial Governments which may join in adopting a fresh_contract for the conveyance of the mails to Australia on the expiration of that of the Peninsula and Oriental Steam Navigation Company now in force.

I have, &c.

(Signed)

M. E. HICKS BEACH.

No. 301.

The Earl of Dufferin to the Right Hon. Sir M. E. Hicks Beach.-(Received August 21.) (Secret.) Sir,

Citadel, Quebec, August 6, 1878. WITH reference to the correspondence which has recently passed relative to the defences of the Dominion, I have the honour of forwarding herewith a copy of a Report addressed to the Minister of Militia by Lieutenant-General Sir Edward Selby Smyth, K.C.M.G., on the subject of the defences of Esquimalt and Victoria, British Columbia.

I have, &c.

DUFFERIN.

(Signed)

Inclosure in No. 301.

Sir,

Ottawa, July 20, 1878.

WITH reference to the despatch of Rear-Admiral de Horsey to his Excellency the Governor-General, dated 1st July, on board Her Majesty's ship "Shah," at Esquimalt, I have the honour to state that previous to its receipt instructions had been given to Lieu. tenant-Colonel Irwin to carry out the project proposed by him after consultation with the Rear-Admiral, the Flag Captain, and other officers who had been selected to inspect the site, and to report thereon.

The last instructions sent to Lieutenant-Colonel Irwin were to construct and arm two 2-gun batteries at foot of Beacon Hill, near Finlayson's Point. One of these batteries has been already completed; the other one, Lieutenant-Colonel Irwin to-day telegraphed to say would be in a more commanding position on Holland Point, but 400 dollars were demanded for the ground, whereas the original spot approved of was Government ground, and nearly as effective a position. So he has been instructed to adhere to the original approved project, although, doubtless, Holland Point would give a larger arc of fire towards Victoria Harbour.

A 3-gun battery has been nearly completed on McCaulay's Point.

Brothers' Island was pointed out by Lieutenant-Colonel Hewitt, Royal Engineers, as a better position than Cape Saxe, and there accordingly the erection of a 1 or 2-gun battery has been approved.

Rodd Point was the next position recommended and approved of for defence of Esquimalt.

* No. 121.

[793]

+ No. 297.

2 D

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