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evaded, so that the adoption of any special measures of defence for this part of the Colony is unnecessary.

11. But there is another port on the south coast which, though having very little trade, demands attention from its great importance as a coal depôt. In the second Report of the Colonial Defence Committee, inclosed in your despatch, Secret and Confidential, of the 26th April, 1878, it is stated that "the Committee have been informed that the Peninsular and Oriental Company, who now make it a coaling station, no longer use it for that purpose, since the introduction of compound engines; and that if it were not for the conditions of their contract, by which they are compelled to call for the mail service of Western Australia, they could dispense with their depôt of coals at that place. The Committee find that the town of Albany, at which the coaling station is placed, is a mere village, and that, therefore, except as a protection for the depôt of coals, it would be quite unnecessary to provide any defences for it. These defences, moreover, would be very costly and extremely embarrassing, as they would require a regular garrison, which would have to be supplied from Imperial troops; it is added that the attention of the Committee was also called by Sir W. Jervoise to the fact that if the regular steamers, which some- times contain very valuable freights, of which gold is an important item, are required to call at King George's Sound, it will become a point at which, in time of war, an enemy's cruizers or privateers might lie in wait for them with a view to their capture. Under these circumstances, as the Committee hesitate to recommend that these works should be erected, and a large garrison maintained exclusively for their defence, they would suggest for consideration whether, in the event of war, the mail steamers, which serve the other Australian Colonies, should not cease to call at King George's Sound, and that some other arrangement should be made for the transmission of the mails to Perth, unless the Admiralty desire to keep it as a coaling station, in which case the defence should be provided for by naval means. In your last despatches a general approval is given of these recommendations, and it is stated that as the Admiralty do not recommend the retention of King George's Sound as a coaling station, measures should be arranged for the removal inland or destruction of the coal there in the event of hostilities.

12. Briefly stated, the case would appear to stand thus: King George's Sound is a convenient coaling station, but in time of war it could be made use of by an enemy's cruizers; its land defence would be a costly and embarassing work, which ought not to be undertaken; if used by the Navy its defence could be effected by ships of war, but this the Admiralty does not recommend; lastly, the mail steamers of the Peninsular and Oriental Company no longer require it for coaling purposes, and as, if they touched there on their way home with valuable freights they would be especially liable to capture, it is considered that in the event of war it should not be used as a coal depôt.

13. With great deference to the high authority by which these recommendations are made, I would submit that there are other considerations which merit attention, and which, I venture to think, will be found to lead to conclusions not altogether in accord with those now put forth.

It is

14. From circumstances which have come to my knowledge, it appears to be doubtful whether the experiment the Peninsular and Oriental Company are making, of running their steamers past Albany without coaling, can be safely or conveniently continued. found that towards the end of the voyage their ships become so light as to suffer considerably from the racing of the engines. Then, again, they have recently made large reductions in freight, with the view of attracting more cargo, which can only be carried by reducing the quantity of coal; and, lastly, there is a project on foot to run, on the new contract, a line of large steamers direct from Aden, which must, of necessity, coal somewhere on their way to the Eastern Colonies, but at present could only do so at the Sound.

15. But I submit that there exists a far stronger reason for the retention of this place as a coal depôt, viz., that it is essential to the requirements of the Colony. Western Australia now subsidizes a service of steamers running from Melbourne, viâ Adelaide, Albany, Fremantle, and Champion Bay, to Nicol Bay, on the extreme north- west coast, which necessitates the keeping in the Colony a large stock of coal. King George's Sound is the only place available for this purpose, and to require that it should not be so used would be to deprive the Colony of all means of communication between her ports and the outer world. It cannot be supposed that the Imperial Government would demand such a sacrifice from any Colony, least of all from one whose existence is a struggle, to which it would effectually put an end.

16. Judging from the recent proceedings of the Russian Government in the United States, there can be no doubt that the policy of such a Power to dispatch, immediately war was declared, a number of powerful, slightly-armed steamers, nominally men-of-war, to cruize in the principal tracks of our commerce and capture-or destroy where they had

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