"I told the Conference that if this line was required for public and Imperial purposes our Government will never in any way stand in the way. I am giving not only my own opinion, but the opinion of my own Government, and, I believe, of the majority of the people of South Australia. If the work is done at all it should be done as a Government work."

I said that the Agents-General for Victoria, New South Wales, Queensland and New Zealand and myself had all been instructed by our respective Governments to urge upon the Secretary of State for the Colonies the appointment of a Commission on which the Imperial Government, Australasia and Canada should be represented for the purpose of considering and reporting upon the best means to be adopted to secure the prompt construction of a cable between Canada and Australasia; that I might call his attention to the fact that my colleagues and myself have pressed, in the strongest manner, upon the consideration of his predecessor, the Marquis of Ripon, and upon Lord Rosebery, the great importance in connection with this work, of Her Majesty's Government promptly taking possession of Neckar Island; that Neckar Island was in the same category as other islands which had been taken possession of by Her Majesty's Government in recent years without any remonstrance on the part of the Hawaiian Government; and we had further pointed out that as soon as it became known that we were seriously contemplating the construction of a cable between Canada and Australasia, no doubt that island would be taken possession of by some other Power.

What we had feared had taken place, and the Hawaiian Government had formally taken possession of Neckar Island, clearly showing that they had not previously done so, and with the unfortunate result that at least half a million pounds sterling had been added to the necessary expenditure for the construction of the cable by the greater distance to Fanning Island, which would now be required to be used in order to attain the important object of having the cable only touching British territory.

Mr. Chamberlain expressed his great interest in the subject, and felt that prompt action was demanded by the movements on the part of foreign countries, whose action would seriously affect the support that the cable would otherwise receive. He stated his readiness promptly to appoint a Commission, and suggested that it should consist of six members-two to be nominated by the Imperial Government, two by Australasia, and two by Canada.

He intimated the desirability of having two representatives of the Imperial Government, as he wished both the Colonial Office and the Treasury to be represented on the Commission.

He also expressed great satisfaction at the result of the tenders asked for by the Canadian Government having elicited the fact that the contemplated expenditure would not materially exceed a million and a half, and he could not doubt that the returns from such an enterprise would to a very large extent cover the expenditure that would be involved.

After some general conversation respecting the

terms of reference to the Commission, he said that these would be submitted to us in the course of a day or two. It was agreed that we should immediately inform our respective Governments what had been decided upon, and he would communicate in like manner with the governors of the various colonies concerned.

When discussing the terms of reference Sir Westby Perceval, the Agent-General for New Zealand, suggested the question of compensation to South Australia and the Eastern Extension Telegraph Company might arise, but Mr. Chamberlain immediately replied that it would be as well to state at once that Her Majesty's Government would not listen to the question of compensation from any source whatever.

After the meeting the Agents-General adjourned to my office, where we settled on the terms of the cable communication to our Governments as follows:

"Re Pacific cable. Colonial Minister at interview to-day with representatives of all colonies except South and West Australia agreed to appoint Commission, but suggested six-two to be nominated by Imperial Government, two Australasia, and two Canada. Terms of reference will follow shortly."

Enclosed you will find the communique that was handed to the Press by the Colonial Office.

I feel sure you will agree with me that under the existing circumstances no good object could be gained by communicating Mr. Fleming's letter of October 11th to the Agents-General or to the Colonial Office, and I think we may all congratulate ourselves of having advanced this matter in

such a material degree as I have no doubt will result in promptly securing the establishment of this invaluable line of communication.

I beg to quote the telegram dispatched yesterday by the Agent-General for New South Wales to the Premier of that colony:

"High Commissioner for Canada and AgentsGeneral for the Australasian colonies, except South Australia and Western Australia, had interview with Secretary of State for the Colonies to-day relating to Pacific cable. Mr. Chamberlain agreed to appoint a Commission as requested by colonies. Great Britain, Canada, and Australasian colonies each to nominate two commissioners-that is to say, six in all. Repeat this joint telegram to other Colonial Governments, including New Zealand, and communicate here names of colonies' nominees. Prompt action desirable. Terms of reference will be forwarded to you to-morrow, will include full inquiry into all details."-I am, etc.,

(Sgd.) CHARLES TUPPER. THE HON. SIR MACKENZIE BOWELL, K.C.M.G., ETC.

DEAR MR. IVES,-I duly received your two cable messages of the 21st instant, as follows:

upon

(1) "Confidential. Urgent. Impress Chamberlain undesirable fixing as standard any named vessel. Canada Government willing to agree upon vessels of tonnage, speed and general appointment as Teutonic, but perhaps built on different lines, taking advantage improvement construction if found desirable to insure better service."

(2) "Shall I make specifications, or will Imperial authorities?"

To-day I sent you the following telegram in reply:

Steamship service. See my letter 15th to Premier. Speed not to be less than Teutonic, but all other conditions left to Canadian Government, who are to prepare specifications and invite tenders. Cable me general terms specification for approval Colonial Office before tenders invited. Writing you more fully to-day's mail."

As I promised in my letter to Sir Mackenzie Bowell, I enclose you herewith a specification suggested by the Naval Armaments Company of a vessel which they consider would be the best for the service, and which could be built for £350,000, together with a memorandum showing how this vessel compared with the Teutonic and Parisian.

The dispatch from the Colonial Office to the Governor-General of the 21st instant-which was mailed last Thursday-will have reached you ere this. You will see by it that, while it is impossible for Her Majesty's Government to state, in the absence of tenders, what amount they will give, Mr. Chamberlain had decided to contribute the £75,000 if the tenders should show that that sum is required.

I will also send you to-day a letter from Mr. Thomas Reynolds, who was invited by Mr. Benham to go to Barrow with him for consultation with the Naval Armaments Company upon this subject. Mr. Reynolds was closely associated with the late Mr. Bryce Douglas in the former negotiations, and Mr. Benham has requested him to give me the result of the consultation with Mr. Adamson, the manager of the firm.