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Appendix No. 4. emigrant, good soil and water, and a market for his produce conveniently near. A large trade might

also be done in salting fish, which abound in prodigious quantities around these coasts.

ISLANDS NEAR PANAMA.

Taboga. (Bay of Panamá.)

Pedro Gonzales. (Bay of Panamá.)

Galapagos Islands.

Taboga.

18. Arrangements could be easily made for a schooner to run with the mails to and from Guayaquil, in connection with the Pacific Steam Navigation Company's steamers, which touch regularly there.

19. Coal and store sheds, roofed with corrugated zinc, could be cheaply erected near the anchorage, and it would be as well to have a distilling apparatus also, to be independent of the rain supply in the event of drought.

20. Should Her Majesty's Government be indisposed to purchase Charles Island, the Island of Taboga-or, rather, that part of it called the Morro-might now be bought from the Pacific Steam Navigation Company for a trifling sum. (See note at the end.)

21. This island, situated in the Bay of Panamá, and distant from the city of Panamá about 12 miles, also offers unusual advantages to Her Majesty's ships. It has been used for several years as a coaling-station and sanatorium by the Pacific Steam Navigation Company, and the buildings and coal-sheds still remain. It is healthy, there is plenty of excellent water, and it is a better place for giving leave to a ship's company than Panamá.

22. The Pacific Steam Navigation Company have no longer any use for this place, having removed their plant to Callao; they would therefore be open to a reasonable offer.

23. The Island of Pedro Gonzales, one of the Pearl Islands, in the Bay of Panamá, is also well worthy of notice. It has an excellent harbour, and is conveniently situated, being right in the track of ships bound in or out of Panamá.

This island could be purchased from the Colombian Government for a small sum.

24. But neither this nor Taboga offer the advantages of Galapagos. With either or all of these islands in our possession, we could always insure a large supply of coals being kept on the station at a fixed and moderate price, instead of having to depend upon the courtesy of foreign nations, or the exorbitant demands of private companies, as heretofore. In proof of this, I have only to remark that quite lately, when war with Russia was expected, Her Majesty's ship Shah >> was ordered to proceed with all despatch from Valparaiso, or Coquimbo, to Vancouver's. To do this she had to call at various ports along the route; the cost of moving that ship from one end of the station to the other was not far short of 10,0007.

tr

25. With a coal depôt at Charles Island, she could have done the same in less, time, and at one- third the cost.

26. And in 1873 I have been compelled to pay 61. per ton for coal, when the same could have been brought out from England, taken across the isthmus, and placed alongside for exactly half that sum, as reported to the Commander-in-chief at the time.

27. My firm belief is that it would be far better and cheaper in the end to buy the whole group of Galapagos Islands, which could be done for some 300,000%. (as I have lately ascertained); we should by this arrangement become possessed of a most valuable property, corresponding in strategical position with Bermuda on this side, and equally valuable in time of war.

Since writing the above, I have heard from Captain Mallett, Her Britannic Majesty's Consul at Panamá; he says, with reference to Taboga: "There can be no doubt that it would be very desirable for our men-of-war to possess a coaling depôt at such a central point in the Pacific, one also which is in telegraphic communication with London. Mr. Firth wrote to me from Callao that he believed the Directors of the Pacific Steam Navigation Company would have no objection to sell the Morro to the Admiralty, if the power of watering the Company's steamers was allowed, and to this I suppose there would be no objection, as there is always an abundant supply of water all the year round.

"The Pacific Steam Navigation Company offered the island for sale about nine or ten years ago for 40,000 dollars. At that time the houses and buildings upon it were in good repair.

Now every- thing is in a state of rottenness, and with the exception of two large iron store-houses, capable of holding 3,000 to 4,000 tons of coal, and three iron dwelling-houses, is worth nothing.

"The wharf also is in the last state of decay. The Company ought to be glad to get 25,000 dollars for the place as it now is. The purchase should, of course, include the portion of land on the Island of Taboga itself, lying opposite the Morro, also belonging to the Company, where the spring rises from whence the pipes are laid which bring the water to the Morro.”

In conclusion, I may be allowed to suggest that, in the event of the purchase being made, Captain Mallett (Her Britannic Majesty's Consul at Panamá) should have the charge of it. This he has volunteered to do, and from being on the spot, he is well qualified to undertake such charge, besides which, such an arrangement would be more economical than appointing a man specially for the

(Signed) W. R. KENNEDY, Captain R.N.

purpose.

[No action was taken on this Memorandum.]

Sir,

the

Inclosure 9 in No. 137.

(F) Commander-in-chief, Pacific (Rear-Admiral Stirling), to Admiralty.

Triumph," at Ancon, November 25, 1879.

I HAVE the honour to inclose, for the consideration of the Lords Commissioners of the Admiralty, copy of a letter relative to the sale of the Island of Gonzales (one of the Pearl Islands in the Bay

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