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not equal to the permanent artillery (8705-3709). The engineers, sixty in number, are all taken from high- class artificers (3710-3712). The men of the torpedo and signal corps mostly belong to the Government Telegraph Department. They constantly practice with submarine mines, and are in a very good state of effi- ciency; they also go with the artillery into camp (3718-3722).

Suggested Increase. The existing forces, numbering in all 1,741, would provide one relief for manning the works, but no reserve, and would not be sufficient in a prolonged war (3723, 3724, 3728–3731). Considering how scattered the works are, the permanent artillery ought to be increased to 500, the volunteer artillery to 400, with an expanding reserve, and the infantry to 2,300 (3733–3737). The additional cost of such an increase would not necessarily be large, as a purely volunteer force, receiving only a capitation allowance, might be raised to supplement the existing force of infantry (3738). It is at present under consideration to form a reserve of all men that leave the permanent force, paying them a retaining fee of 17. per month (8725-3727). The working of the heavy guns would fall upon the permanent artillery, and would absorb the whole force at its present strength, leaving none for the smaller ordnance which are mounted in batteries, where quick working and accurate aim would be ueces- sary. The permanent artillery have such an intimate knowledge of their duties that the men, if retained at the expiration of their period of service, would in a few years form a reliable reserve, so much so, that the number of gunners in the permanent force might be reduced, retaining little more than the staff of the batteries. It would be well to encourage the formation of the Reserve by allotting to them a portion of the Government appointments.

The Reserve could be called out in time of danger, and at once bring up the batteries of permanent artillery to the required strength. The volunteer artillery deserve great credit for the way they have mastered their drills with the smaller guns, but a force of the nature suggested would be more reliable and less expensive in the long run. The present organization in the other branches of the service could not be improved upon (3742).

General Officer. The appointment of a General Officer, for a period of not more than five years, to inspect critically all the forces in Australia, would be of great service, and would be popular in New South Wales (3775-3778, 3783). A General Officer could, in case of emergency, take command of the combined forces of two or more colonies, and would relieve the Governors of large responsibilities and awkward ques- tions with which they have to deal in their capacity of Commanders-in-chief (3782–3785). Except the diffi- culty of command, there would be no difficulty in combining the forces of two or more Colonies (3782).

Munitions of War.-Gunpowder is not made in the Colony. It has been proposed to establish a manu- factory supported by Government; the proposal is still under consideration, but is scarcely likely to be enter- tained on account of the expense (3746-3749). Muni- tions of war are stored in magazines on the river. some years all the powder was kept at Goat Island, which is now close to the centre of the town, and it was proposed to move it further up the river for fear of accidents. There is a floating magazine at Newcastle, which contains the powder for that district as well as the merchants blasting powder (3757, 3758, 3760). The small arms in use are Henry rifles, which have lately been altered to take Martini-Henry ammunition. Like all other military stores, they are obtained from England. The Colony has in store a number of old rifles, Sniders and others, and about 1,000 rounds for each arm.

There are sufficient to arm 5,000 volun- teers. The other Australian Colonies have Sniders (3761-3767).

For

July 29, 1880.

The Right Honourable Sir JoпN A. MACDONALD, Prime Minister of the Dominion of Canada.

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war between Great Britain and the United States is annually decreasing, and it is most improbable that war will ever arise from causes connected with Canada. The trade of Canada has much increased, and the com- mercial relations of the two countries are being year by year drawn closer together. The Americans are alive to the importance of their trade with all parts of the Dominion. Until lately they had nearly a mono- poly of the supply from St. Paul and St. Louis, close to the frontier. By an alteration in the Tariff of Canada made in 1878, duties have been placed upon American products, and to regain possession of the market, the Chambers of Commerce and Boards of Trade in the United States are endeavouring to induce Canada to open their markets to them, and their tone towards the Canadians is quite different from that of former times. Politicians in the United States may try to get up the appearance of a quarrel with England just before the Presidential election, but the American people un- doubtedly desire to keep on friendly terms. The settle- ment of the Alabama question by arbitration has established in their minds that mode of solution for any question that may arise between the two countries. War between them is almost an impossibility, and is a contingency which, for all practical purposes, may be left out of consideration (3787, 3788). Such a war would bring distress, if not ruin, to Canada at the time, and disastrous consequences for many years after (3790).

Railways.The United States' Northern Pacific Rail- way Company has a charter to make a railroad to Puget Sound. The line runs from Duluth at the head of Lake Superior in a westerly direction to Bismark, the present terminus. Further operations are suspended, owing to the difficulty of crossing the Great Desert (3799, 3800, 3831). Another line runs north from St. Paul, and crossing the northern road, joins the Canadian Pacific Railway at Pembina, while, on the Canadian side, a line has been constructed from Win- nipeg, on the Red River, to Emerson, on the frontier, and joins the St. Paul Railway there. It is believed that the construction of the Canadian Pacific Railway will cause the postponement of the American project. The section between Lake Superior and Winnipeg is being pushed on from both ends, and will be finished in 1882. Until then the westward traffic from Canada will con- tinue to pass through the United States viâ Daluth, Glyndon, and the St. Paul Railway. A contract has

been entered into for the construction of 127 miles from the Fraser River to Kamloops in five years. From Winnipeg westward to Jasper House, across the prairie, the railway can be built at the rate of a mile a day; 100 miles will be finished in January 1881, and another 100 miles by the autumn. Capitalists have offered to complete the line to the Pacific, and to extend it east- wards from Lake Superior to Lake Nipissing, in Ontario, where it will join the existing railway system of Canada in ten years (3802-3805, 3817). No difficulty is anticipated in keeping the line clear of snow. The main portion lies north of the great snow belt, which falls within the United States (3832– 3834). The western terminus will be at New West- minster, close to the United States' frontier. Bute inlet being further from the frontier was suggested as preferable to New Westminster, but was rejected on account of engineering difficulties (3797, 3807). For about 50 miles the railway will be within 50 to 70 miles of the frontier, and could be easily interrupted; indeed the Americans could take possession of the whole country (3790, 3793-3798). Their difficulty at New Westminster would be the distance they would have to traverse. They are not in great numbers in that part, and would not have the same facility for cutting the line there as they would have eastwards (3830).

A railway will run from Nanaimo to Esquimalt on Vancouver Island, a distance of 90 miles, and commu- nication will be kept up between the terminus on the mainland and Nanaimo, by means of large steamers (3825-3829).

It is probable that other railways will be made by Risk of War with the United States.-The danger of private enterprise in British Columbia before long,

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