A.—6.

Should it be decided by the colonies to move on the following lines—viz., to create a force suited to these waters and to the special requirements of their case, with'the view to increase the Australian squadron—to bring the matter within range for decision I put forward a series of propositions on my own responsibility, but with an earnest feeling that some such force is much required ; and, while I personally recommend for consideration each proposition, I quite recognize that it is necessary to convince those responsible for recommending expenditure, as well as the colonists at large, and it is not possible within the limits of such a paper as this to enter fully into all the details involved. It may be recalled that in the reign of Henry IV. the country was much perplexed about the navy, then in its infancy. Matters had not gone well with it either as to expenditure or as to the force produced. It was decided to intrust it to merchants—viz., to provide a navy by contract. The system did not last long, for reasons I need not enter into, but the precedent conveys an idea. Should it be decided that the highest interests would be best served if the colonies defrayed the expense while the Admiralty supplied men and maintained the vessels, it being clearly understood that the vessels so provided were to be a force, both as to personnel and materiel, additional to the fleet of the Empire as voted by the Parliament in London, then the following are some of the points that would present themselves for decision :— (i.) The arrangement to last, say, for ten years, but to terminate only after three years' notice. (ii.) The Admiralty to furnish the ships, which would be built either by contract or in the dockyards. The ships to be equipped, manned, and despatched as are all other of Her Majesty's ships, the sole reserve being a limitation as to their employment. (iii.) The class of ship, the design, and estimate to be approved by the Colonial Government and by the Admiralty. (iv.) The armaments to be approved by the Colonial Government. (v.) Eepairs to be effected, as far as they can be, within the colony. (vi.) Eepairs to be effected in the same manner and with the same authority as is the practice with Her Majesty's ships. (vii.) The Admiralty to recommission the ships from time to time precisely as Her Majesty's ships on the station. Officers and crews are not to be kept too long on the station. - (viii.) The officers and men to be on the same footing in every respect as the officers and men in Her Majesty's ships. In fact, the ships to be in every sense Her Majesty's ships in commission, and placed under the Commander-in-Chief on the Australian Station. (ix.) At no time will these vessels be removed without the waters of Australasia without the sanction of the Governments of the colonies. (x.) During a time of peace the officers and others of such ships as are not in active commission could be well employed to instruct the reserve forces and Volunteers. A special arrangement on this subject would be necessary. (xi.) Nothing in the above regulations prevents any colony possessing itself of other vessels for other purposes. Such vessels will fly, as now, the colonial flag, and this applies to all vessels the property of colonial Governments when they are not placed under the naval Commander-in-Chief. When under the Commander-in-Chief they would fly the white ensign, and be like other ships of' the squadron. — (xii.) The entire cost of materiel, of maintenance, and of personnel, including the ultimate liability of Her Majesty's Government on account of deferred pay for officers and men for the periods they serve in such ships, to be borne by the colony. That there is a, distinct call for every endeavour that can tend to protect our commerce cannot be questioned. More sea-going tonnage enters one port within these colonies annually than entered the Thames at the time when Her Majesty came to the throne within the same period. There is no colony that does not possess statistics that clearly demonstrate how small a percentage would be called for out of the profits of that trade to afford a reasonable amount of protection; and a first step in this direction would be taken if we provided ourselves with cruisercatchers, and to the cruisers I should desire' to add torpedo-boats capable of going from port to port. They would be especially valuable to cover a long stretch of one coast. The possession of such boats, kept always at the end of a telegraph wire, would effectually prevent an enemy anchoring near our shores. I recommend the adoption of a dropping arrangement, which could be fitted in a few hours to local small steamboats, such as we have on board H.M.S. " Nelson," for Whitehead torpedoes. It is inexpensive in construction and maintenance, and enables us to largely supplement more regular torpedo-boats for harbour defence, in a ready and effectual way. There should be torpedo-stations on shore, a small pier where the boats could rest in safety, and two air-compressing engines in different positions within the heads, and two skilled hands at each station. I have dwelt specially on the defence of our principal ports (I have previously written on the defence of Newcastle and Sydney) because I feel that, if the principal temptations to attack are removed, and the largest prizes are shielded, it would not be worth while for an enemy to detach important squadrons for the purpose of destroying less important places; and thus the whole of the colonies and every place would receive benefit, inasmuch as they would not be liable to be devastated by an overwhelming force. Cruisers and unarmoured ships can do little against a comparatively very small defence; and it will be noticed that, while I have recommended the adoption of' cruiser-catchers, I have not been unmindful of the long stretches of these shores where the efforts of the enemy would be best defeated by another class of boat. It may not be out of place here to mention, seeing that success engenders success, that, if all united to pay the losses suffered at any spot on our shores owing to the resistance the inhabitants

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