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Third Report, p. 362.

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tion by an enemy.

He estimates the cost of defence approximately at 60,000l., and the requisite garrison at 270 men.

94. We are unable to concur in this recommendation, though the Admiralty may decide upon establishing a second-class coaling-station. The trade through the straits is undoubtedly increasing, but at present is not, in our opinion, of sufficient value to justify the expenditure proposed. More- over, Thursday Island, although a point of observation from which ships of war might act to close the straits, does not command the passages now in use, and might be altogether avoided by using one of the unfrequented passages to the north. It must also be remembered that the nearest foreign possession from which hostile cruizers could proceed is New Caledonia, distant 1,500 miles.

First Report, paragraph 116. Digest, pp. 598, 599, 604, 609.

Digest, pp. 597, 598, 600, 601,

609.

V. THE ROUTES BETWEEN GREAT BRITAIN, THE EAST COAST OF NORTH AMERICA, AND THE WEST INDIES.

The East Coast of North America.

95. The trade of the United Kingdom with the United States and Canada, as shown by the charts appended to our first Report, exceeds 119,000,000%. in annual value, of which a large proportion is food and raw material supplied to the United Kingdom.

96. The United States would have immense facilities for interrupting our trade with the Dominion of Canada both by land and sea. In the event of war with any other maritime Power, the evidence points to the conclusion that merchant-ships would require protection only near the coasts at either end, trusting to their own speed for the intermediate portion of the voyage.

97. War between Great Britain and the United States would mainly depend upon naval operations, in which case the fortified ports of Halifax and Bermuda would be of the first importance to your Majesty's navy as coaling- stations, and to merchant-ships as harbours of refuge. Without ports in which to coal, your Majesty's ships could neither protect British trade in Third Report, Appendix No. 3. the western waters of the Atlantic nor act against the trade of the United

Third Report. pp. 479, 481.

Third Report, pp. 383-406.

First Report, paragraph 116.

States. The consideration of the defences of these two stations having been withdrawn from us by your Majesty's Government, we have only to refer to the evidence already taken, and to add that it seems to us very desirable, as recommended in our letter to the Colonial Office dated the 2nd April, 1880, that Halifax should be placed in telegraphic communication with Bermuda, and Bermuda with the British West Indies.

98. We annex some correspondence on the subject of Newfoundland, but, both with reference to the protection of ports in this Colony and on the Atlantic coast of the Dominion of Canada, the question is so intimately connected with that of the strength of Halifax, that we must necessarily leave the subject to be considered by your Majesty's Government.

99. It is most desirable that a large stock of coal should not be kept in undefended Canadian ports. Either the Colony should provide defences for those ports at which it is necessary to keep coal for commercial purposes, or the coal should be removed on the outbreak of war. The Imperial Govern- ment by undertaking to keep up a fleet and maintain the fortresses of Halifax and Bermuda affords so large a measure of protection, that the defences of the purely mercantile ports need not be of a very extensive character.

The West Indies.

100. British trade with the West Indies amounts to 21,000,0001. annually, and additional trade may be expected upon the completion of the Panamá Canal. It is necessary to consider the sources from which, in time of war, danger may arise.

101. Unquestionably the country from which most risk is to be appre- hended is the United States of America.

102. The next naval Power in these seas is France, whose possessions are

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