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Inclosure 7 in No. 137.

Admiralty to Vice-Admiral the Hon. A. A. Cochrane.

Sir,

Admiralty, December 13, 1878. I AM commanded by my Lords Commissioners of the Admiralty to acknowledge, with thanks, the receipt of your letter dated the 11th May last,* relative to the advantage of acquiring the Island of Pedro Gonzales for the purpose of establishing a coaling-station and naval depôt ; and, in reply, I am to acquaint you that my Lords, having carefully considered the matter, are not prepared, at present, to take any steps for the purchase of this island.

I am, &c. (Signed) ROBERT HALL.

Appendix No. 4.

ISLANDS

NEAR PANAMA.

Inclosure 8 in No. 137.

(E.) Memorandum from Captain W. R. Kennedy, R.N., to First Lord of the Admiralty (Right Hon. W. H. Smith, M.P.), dated May 17, 1879.

On the Advantages of the Galapagos Islands as a Coaling Station in the Pacific.

IN the vast expanse of the Pacific Station, extending from 60° south to 55° north, there is not one single port, with the exception of Vancouver's Island, where ships can, with certainty, obtain coal in time of war.

2. It is true that we have contracts for a supply of coal to be always kept at Coquimbo, Valparaiso, Caldera, Callao, Payta, Panamá, Acapulco, &c., but in the event of war with any foreign Power, these ports could not supply us with contraband of war, without an infringement of international law.

3. The same applies to our store-ship at Coquimbo, which is only permitted to remain there on sufferance, as the Chilean Government would most certainly order her removal in the event of war with any European Power or with the United States.

4. It is therefore of the greatest importance that we should possess an island suitable for a coal and store depôt, and, in my opinion, such a place is to be found in the group of islands on the Equator called the Galapagos.

5. These islands enjoy many advantages, they are in the centre of the station, and lie in the direct route of ships bound from Valparaiso to Vancouver's Island, and within a few days' sail of either Callao, Payta, or Panamá.

6. Though situated on the Equator, they enjoy a fine climate, for the south-east trade blows through them all the year round, and a cold current sets directly on their shores.

7. In all of them good anchorages are to be found, where ships may lie in perfect security, no sea or rollers ever set in, and earthquakes are unknown.

Galapagos Islands.

Charles Island, or

» Floriana.

(Galapagos Group.)

8. The most conveniently situated of the group is Charles Island, or, as it is sometimes called, Floriana. At the time of my first visit to these islands, in 1872, in Her Majesty's ship "Reindeer, this island was rented by Signor Valdesan (from the Government of Ecuador, to whom the group belong), for the purpose of breeding cattle, and for procuring orchilla weed, which is found on its shores, and is used for making a dye. At this time there were some 2,000 head of cattle on the island, besides wild horses, donkeys, pigs, goats, &c.

9. The shores are barren and destitute of vegetation, being a mere mass of decomposed lava (all the islands are of volcanic origin), but at the height of 1,000 feet a magnificent climate is obtained, and one finds oneself transported to a beautiful park-like country, with oranges, lemons, bananas, sugar, tobacco, coffee, cotton, and maize thriving luxuriantly.

10. On this elevated plateau a sanatorium might be placed; but it is as a coaling-station that the advantage of this island to us is most apparent.

11. It is true that there is no first-rate harbour, but the anchorage on the north, or lee side of the island, called Post Office Bay, is perfectly secure, and in this respect is much superior to St. Helena or Ascension.

12. An opportunity now offers for the purchase of this island by Her Majesty's Government. On my way home from Coquimbo last December I paid a visit to Guayaquil, the sea-port of Ecuador, to consult with Captain Chambers, our Consul there, on this matter.

13. Signor Valdesan, who rented the island, is dead, and the island is in the market. The Republic of Ecuador is bankrupt, and the bondholders in London are in a position, and are prepared, to deal for the purchase of the island.

14. I have consulted with these gentlemen on the subject, and the result is that they are willing to sell the island for 100,0001.

15. This may seem a large sum, but it is not too much for the advantages gained in possessing a piece of land which would belong for ever to Her Majesty.

16. It may be said that, having got it, we should have to defend it; but, if a place is worth having, it is worth defending, and the same applies to Ascension, &c. Besides, it would be easy to defend it, and our ships could reach it at least as soon as those of any other nation, should it be

threatened.

17. Once under our protection, it would be easy to colonize it. There is every inducement for the

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* Inclosure 6.

6 E

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