7

A.—6

Frequent and detailed examination was given, not only to the main features of the international situation, but to the different aspects of that situation as they developed from day to day. Nor did the Imperial Conference terminate its sittings until each subject had been carefully explored and a common understanding reached upon the main heads of foreign policy. Jt was while the Conference was sitting that the President of the United States renewed the offer of the United States Government to take part in an international conference or inquiry to investigate the European reparations problem, and to report upon the capacity of Germany to make the payments to which she is pledged. The Conference cordially welcomed, and decided to take immediate advantage of, this overture ; and communications were at once entered into with, the Allied Powers to obtain their co-operation. The Conference, after careful consideration of the policy which has been pursued, was of the opinion, that the European situation could only be lilted on to the plane of a possible settlement by the co-operation of the United States of America, and that, if the scheme of common inquiry to be followed by common action were to break down, the results would be inimical both to the peace and to the economic recovery of the world. It felt that in such an event it would be desirable for the British Government to consider very carefully the alternative of summoning a Conference itself in order to examine the financial and the economic problem in its widest aspect. The Conference regarded any policy which would result in breaking up the unity of the German State as inconsistent with the treaty obligations entered into both by Germany and the Powers, and as incompatible with the future discharge by Germany of her necessary obligations. The strongest representations on this subject were accordingly made to the Allied Governments. The Conference considered, the situation in the Near and Middle East, and recorded its satisfaction at the conclusion of peace between the Allies and Turkey. An end had thus been brought to a period of acute political tension, of military anxiety, and financial strain in the eastern parts of Europe ; and more particularly had great relief been given to the sentiments of the Moslem subjects of the British Throne in all parts of the world. Another of the subjects that engaged the attention of the Conference was that of Egypt. The Conference was glad to recognize the great advance that has been made during the last two years towards a pacific settlement of this complex problem, which will safeguard important communications between several parts of the Empire. The Conference, so much of whose time had been occupied two years ago with the question of the renewal or termination of the Anglo-Japanese Alliance and with the future regulation of the Pacific, noted with satisfaction the results of the Washington Conference, which had added immensely to the security of the world without disturbing the intimate relations that have for so long existed between the Empire and its former Ally. It recognized with satisfaction the progressive fulfilment of the obligations incurred under the Washington Treaties ; it registered the confident belief that the future relations between the Governments and peoples of the British Empire and Japan will be not less sincere and cordial than when the British and Japanese Governments were bound by written conventions ; and it recorded its profound sympathy with the Japanese Government and people in the terrible catastrophe which has recently befallen them. During the session of the Conference the question of the regulation of the liquor traffic off the American coasts, and of the measures to be taken to avoid a serious conflict either of public opinion or of official action, was seriously debated. The Conference arrived at the conclusion that, while affirming and safeguarding as a cardinal feature of British policy the principle of the three-mile limit, it was yet both desirable and practicable to meet the American request for an extension of the right of search beyond this limit for the above purpose, and negotiations were at once opened with the United States Government for the conclusion of an experimental agreement with this object in view. Finally, the Conference, after listening to a detailed exposition of the work of the League of Nations during the past two years, and more particularly of the recent