measure of success, although at one time the negotiations that were in progress appeared likely to have a satisfactory termination.

2. Last year, as you are aware, an important conference was held at Ottawa, at which all the leading colonies, as well as the United Kingdom, were represented. Among other questions discussed at considerable length was that of improved communication between different parts of the Empire, including the fast Atlantic service, and the following resolutions were passed:

(1) That the conference expresses its cordial approval of the successful efforts put forth by Canada and New South Wales for the establishment of a regular monthly steamship service between Vancouver and Sydney. And affirms the advisability of a reasonable co-operation of all the colonies in securing the improvement and permanence of the same.

(2) That the conference learns with interest of the steps now being taken by Canada to secure a first-class mail passenger service, with all the modern appliances for storage and carrying of perishable goods across the Atlantic to Great Britain, and the large subsidy which she has offered to procure its establishment.

(3) And it regards such an uninterrupted through line of swift and superior communication between Australasia and Great Britain as is above contemplated as of paramount importance to the develop

ment of Intercolonial trade and communication, and to the unity and stability of the Empire as a whole.

(4) That as the Imperial Post Office contributes towards the cost of the mail service between England and Australia, via Brindisi or Naples, the sum of £95,000 per annum, while the sea postage amounts only to £3,000, and to the mail service between Vancouver and Japan and China £45,000, less £7,300 charged against the Admiralty, this conference deems it but reasonable respectfully to ask that assistance be given by the Imperial Government to the proposed fast Atlantic and Pacific service, more particularly as the British Post Office, whilst paying the large subsidy of £104,231 a year to the line from Liverpool to New York, has so far rendered no assistance to the maintenance of a direct postal line between Great Britain and Canada.

3. Prior to the conference, the Canadian Government entered into a provisional contract with Mr. James Huddart, for the new Atlantic service, and the Dominion Parliament, after the conference had finished its labours, passed an Act authorising the subsidy of $750,000 per annum for ten years for the proposed service. It will require four steamships, of a tonnage of 10,000 tons or upwards, capable of maintaining a speed of 20 knots per hour at sea, and in size, equipment, speed and design

they will be fully equal to vessels like the wellknown Majestic and Teutonic. As you will gather from the Blue Book which I enclose, containing the correspondence between the Government and Mr. Huddart, it has all along been understood that assistance would be required from Her Majesty's Government to supplement the subsidy that has been given by Canada; and this will also be apparent to you on perusing the proceedings of the Ottawa Conference, and Lord Jersey's report thereupon. In this connection I may mention also that the time originally specified for the completion of the contract had been extended by the Canadian Government in order to enable Mr. Huddart to obtain the decision of Her Majesty's Government.

4. In March, 1894, immediately after the contract was made, I was requested by the Canadian Government to render any possible assistance to Mr. Huddart by bringing the matter to the notice of the Imperial Government. As the consequence, there were several consultations between my colleagues, the Agents-General of the Australasian and South African Colonies, and myself, in regard to this and other matters of importance to the various colonies. We (excepting the Agents-General for South Australia and Western Australia) waited upon your predecessor by appointment on the 4th April, 1894, accompanied by Sir Thomas McIlwraith, a member of the Queensland Government, and the Hon. Robert Reid, a member of the Victorian Government, and were received by Lord Ripon and the Earl of Rosebery, the then Premier. Our representations were promised the

careful attention of the Government, and a promise was made that Her Majesty's Government would be represented at the then forthcoming Ottawa Conference. A newspaper report of the proceedings on that occasion is enclosed.

5. I attach for your information a copy of a paper I read before the Royal Colonial Institute in May, 1894, in which I referred to the matter.

6. The Earl of Jersey, in his report upon the conference, has dealt so fully with the fast Atlantic service, and has expressed so strongly the arguments in favour of the proposal, that I need only, at this point, recall his communication to your attention.

7. When the service is established, it will enable passengers and the mails to be conveyed to Canada, as well as to the United States, in less time than is at present occupied, this result being rendered possible by the advantage Canada possesses in her geographical position, in conjunction with the railway facilities that exist for rapid transportation to all parts of the Continent from the port of debarkation.

8. Although, as already mentioned, the efforts of the Canadian Government have not yet been successful in bringing the proposed fast service into operation on the Atlantic, considerable attention has, in the meantime, been devoted to the improvement of the means of communication, under the British flag, on the Pacific. After the completion of the Canadian Pacific Railway, which, although an Imperial highway in the highest sense of the term, was constructed by Canada without any aid from the Imperial exchequer, the Canadian

Government, in conjunction with Her Majesty's Government, subsidised a fast steamship service between Vancouver, Japan and China, by which a considerable saving of time in transit has been effected, and a new and alternative route opened up.

9. A subsidy of £25,000 per annum is also being paid by Canada towards the service of steamers which is now plying regularly between Vancouver and Australasia. New South Wales contributes £10,000 per annum, and, as you will notice from the Times to-day, the New Zealand Government intend to subsidise the service to the extent of £20,000 per annum, in consideration of the steamer calling at a New Zealand port. Fiji also gives a small subsidy of £1,500 per annum.

10. I have mentioned these facts to show what Canada is doing to create new and important steamship services to China and Japan, and to Australasia from this country via Canada, the new highways and alternative routes being rendered possible by the construction of the Canadian Pacific Railway and to justify the application that has been made for a subsidy from the Imperial Government of £75,000 per annum, without which it would not be possible to complete the lines of communication in the way that is desired--especially so far as the Atlantic portion of the service is concerned.

II. The belief is entertained that the assistance of Her Majesty's Government will be the more readily granted in view of the fact that the steamers will be built under Admiralty supervision, and will thus be eligible for the subvention that is now granted