A.—2.

Here, as elsewhere, if we were not actually first in the field, we have certainly been fortunate enough to secure the lion's share of plunder. If, on one side, Australia has Indian-Ocean connections, on the other and more important side she looks out upon the Pacific, while New Zealand is entirely its waters ; and there can be little doubt that our annexations among the smaller islands of that ocean have had in view mainly the interests of the Australian Colonies. For this reason we can brook no intrusion into Torres Straits, and for this reason we, four years ago, with a hesitation that now seems unaccountable, annexed 86,000 square miles of the south-eastern part of New Guinea. This last island, like Australia, has relations both with Malaysia and with the Pacific. As far as Germany and England are concerned, it is distinctly a Pacific island, while Dutch New Guinea seems naturally to attach itself to the Dutch East Indies. It was certainly a strategical mistake not to have annexed the whole of available New Guinea when we had the chance, when no other nation thought it worth looking at; for there can be little doubt that, whatever the industrial value of Germany's share, it possesses a magnificent series of natural harbours, and a coast, on the whole, much healthier than that which faces Australia. If it be true that the Dutch are willing to dispose of their share in New Guinea, surely it would be a mistake to allow it to fall into the hands of any other foreign Power. To the east of Torres Straits, lying right out in the open ocean, are several groups of islands which look as if they were intended as outposts of Australia, yet none of them have as yet fallen to our share. These are the Solomon Islands, the New Hebrides, and the Loyalty Islands, with New Caledonia. Between these and the Australian coast are a few isolated islands, which we of course regard as our own—Auckland, Lord Howe, Norfolk, Avon Islands, and others, which cannot be considered as of much strategical value. True, by agreement with Germany that Power has been allowed to extend her sphere of influence over the larger of the Solomon Islands—Bougainville, Isabel, Choiseul, &c.—while the remainder are regarded as coming within the English sphere, like the islands off the south-east peninsula of New Guinea. These include the four islands of New Georgia, Guadalcanal', Malanta, and San Christoval. With these and the neighbouring Santa Cruz Archipelago under our influence, might it not be possible to come to an arrangement with France for a final settlement of the ever-irritating New Hebrides question, just as we have amicably agreed with Germany as to the partition of the Solomons? As long as the New Hebrides remain in thenpresent unsatisfactory condition they will be a source of bitterness between English and French in the Pacific. Both nations have had missionaries and traders in the islands for years, and English colonists have found among the natives the chief source of their labour-supply. The islanders—a very mixed but fine race—are still, as a whole, ardent cannibals. As far as commercial considerations go the Fiji Islands have proved much more valuable than New Caledonia and the Loyalties together, though their total foreign trade has fallen recently from £800,000 to £500,000. The value of the group as a naval station is well known, and its importance cannot but be enhanced by the opening of the Panama Canal. Unfortunately the natives, now mostly Christians, seem to be fast dying out, and of the 124,000 inhabitants some 10,000 are immigrant coolie and Polynesian labourers. More than half-way from Fiji to New Zealand we come upon the Kermadec Islands, which were recently annexed mainly to keep them out of the hands of the foreigner ; they are really outposts of Now Zealand. They cover only about twenty square miles of land, and were, when visited last year, inhabited by a Mr. Bell and his family from Samoa, who grow European vegetables as well as other crops. The islands seem to have no harbour of any value. Another New Zealand outpost is Chatham Island, almost directly south of the Kermadecs, and useful as a depot for provisions. These and the other small islands to the south-east and south of New Zealand are all, of course, attached to that colony. The only other islands in the Pacific to which Britain can lay claim are those which it was announced the other day we had just annexed—Caroline, Starbuck, Maiden, Fanning, and Penrhyn Islands, which have been in the Colonial Office List for years. Fanning was annexed by England in 1861, and is really a useful possession. It is only thirty miles in circumference: it is fruitful and has good water-supplies; while from the ethnological point of view it is of great interest. Fanning Island lies about 5° north of the equator, almost directly south from the Hawaiian Islands. About the same distance on the other side of the equator, and in a south-south-easterly direction, lie Maiden and Starbuck Islands, all being included in what Stieler calls the Central Polynesian Sporades. They are the smallest islands and reefs, scattered apart over a wide area, and valuable mainly for the guano which they yield, but which in many of the islands is now exhausted. They were annexed in 1866. About 5° to the south-east of these is Caroline Island, about eight miles long and two broad, which became English in 1868. Some 500 miles west-north-west is Penrhyn Island, on which it would seem we only hoisted our flag the other day. It is a lagoon island, fifty miles in circumference, with good anchorage for small vessels. A glance at a map of the Pacific will at once show the importance of these ocean-specks as half-way houses in carrying a cable from Vancouver to New Zealand. Their commercial importance is small, though their copra is worth looking after. There are other islands in the same region which it might be well to examine ; they lie directly in the route westwards from the Panama Canal to the Malay Archipelago, and if good harbours are available we might as well have them at our disposal. Taking, then, our share of New Guinea, of the Solomon Islands, Fiji, and the smaller fry we have referred to, their direct commercial value is not great, though they certainly do afford fields for enterprise which are not to be despised. Their great value to us is as outposts of Australia, as connecting-links between that continent and British America, and as lying on one or other of the new routes that will be created by the opening of the Panama Canal. It is from these points of view, and from the general standpoint of naval strategy, that further annexations should be made; for otherwise why should we incur further expense and responsibility by assuming the protection of a multitude of scattered reefs'? It is of some interest to notice that the Penrhyn mentioned above is marked on the maps in Stieler's Atlas, and also on Kiepert's large map of the Pacific, as belonging to the United States.

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