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the words " Imperial Government "in lieu thereof. In addition to these proposals, it is submittedThat the vessels agreed upon should be provided, furnished, and manned by the Imperial Government at its cost; that the colonies pay all costs of maintenance during the term of the agreement; maintenance to include such items as are mentioned in paragraph 7, and included in revised estimate in telegram from Admiralty of 25th April, 1886; the proportional payments by each colony to be based on population ; a special Appropriation Act to be passed in each colony to provide for its annual contribution. Attached will be found, for greater convenience, the proposals as altered and added to. Proposals as Agbeed to. (a.) That the purely local Naval Defence Force, which has already been created in several colonies at their own instance, shall remain much on the footing that has been already established. (b.) That any sea-going vessels that may be provided, equipped, and maintained should be manned by the Admiralty, and be placed in every respect on the same status as are Her Majesty's vessels at present belonging to this station, including the condition that the officers and men should be changed from time to time, so as to secure, both as to officers and men, that the instruction given in naval establishments at Home, and also that the exjierience gained in the world at large, as now obtained from Her Majesty's fleet, may be enjoyed by all. (c.) That the vessels provided should be retained within the limits of the Australasian seas. (d.) That no reduction of the forces now on the station shall take place consequent on any addition which may now or hereafter be made to the force. (/.) That an increased number of cadetships shall be given to the colonies. (g.) That during a time of peace these vessels should be employed in the same way as are other vessels of war on this station. (li.) That any arrangement made shall be for a period of years—ten has been suggested. That the vessels to be provided under this arrangement be five vessels of the " Archer " class, and two fast sea-going torpedo-vessels. [Note. —It is understood that the " Archer" is a vessel of 1,630 tons displacement, will steam seventeen knots, and be armed with six 6in. breech-loading rifle-guns, and would also carry torpedoes. The recently-designed fast torpedo-boats have a displacement of 430 tons, steam nineteen knots, and would be armed with three tubes for Whitehead torpedoes, with one 3in. breech-loading rifle-gun, four quick-firing, and the three Por. and two machine-guns.] That the crews of the vessels be changed every three years. [Note. —The Admiral estimates that this would involve an annual charge of £8,300 ; but he remarks that as probably only some of the " Archer " class vessels need be kept in commission, and the torpedo-vessels would probably be kept with reduced crews and be held in reserve, in such case the cost of maintenance would be greatly decreased.] That the several colonies will continue to arrange for local defence ; and that after joint consideration and decision as to any sea-going vessels of war they may desire to add to th/j squadron on the station, that such vessels should not be subject to any divided responsibility as to their movements within the Australasian waters; but that they, in common with the squadron on the station—of which, indeed, they would form a part—should be solely and entirely under one responsible head. That should it not be the desire of the colonies to renew the arrangement now made, at the end of the named period (ten years), it should then come to an end, and the vessels become the property of the Imperial Government. That the vessels agreed upon should be provided, furnished, and manned by the Imperial Government at i;s cost. That the colonies pay all costs of maintenance during the term of the agreement. Maintenance to include such items as are mentioned in paragraph 7, and included in revised estimate in telegram from Admiralty of the 25th April, 188(5. The proportional payment by each colony to be based on population. A special Appropriation Act to be passed in each colony to provide for its annual contribution. Annual Cost op Maintenance.—Based on estimate given in telegram of 25th April, 1886, from Admiralty, London, to Admiral Tryon. War Fooling. Maintenance expenses of five vessels of the "Archer" class, at £25,456 £127,280 Maintenance expenses of two torpedo-catchers, at £11,029 ... ... 22,058 Annual cost of triennial change of crews... ... ... ... 3,300 £152,638 Peace Footing. Maintenance expenses of three " Archers," at £25,456 ... ... £76,368 Maintenance expenses of one torpedo-vessel ... ... ... 11,029 Exchange of crews ... - ... ... ... ... ... 1,800 £89,197