"I favour one great Imperial Navy with all the Overseas Dominions contributing, either in ships or money, and with naval stations at the self-governing Dominions supplied with ships by and under the control of the Admiralty. I, however, realise the difficulties, and recognise that Australia and Canada in this important matter are doing that which their respective Governments consider to be best; but the fact remains that the alterations that will be brought about upon the establishment of an Australian unit will alter the present position with New Zealand.

"New Zealand's maritime interests in her own waters, and her dependent islands in the Pacific would, under the altered arrangements, be almost entirely represented by the Australian Fleet unit, and not, as at present, by the Imperial Fleet. This important fact, I consider, necessitates some suitable provision being made for New Zealand, which country has the most friendly feeling in every respect for Australia and her people, and I am anxious that in the initiation of new arrangements with the Imperial Government under the altered conditions, the interests of New Zealand should not be over-looked. I consider it my duty to point this out, and to have the direct connection between New Zealand and the Royal Navy maintained in some concrete form.

"New Zealand will supply a Dreadnought for the British Navy as already offered, the ship to be under the control of and stationed wherever the Admiralty considers advisable.

"I fully realise that the creation of specific units, one in the East, one in Australia, and, if possible, one in Canada, would be a great improvement upon the existing condition of affairs, and the fact that the New Zealand Dreadnought was to be the flag-ship of the China-Pacific unit is, in my opinion, satisfactory. I, however, consider it is desirable that a portion of the China-Pacific unit should remain in New Zealand waters, and I would suggest that two of the new "Bristol" cruisers, together with three destroyers and two submarines, should be detached from the China station in time of peace and stationed in New Zealand waters; that these vessels should come under the flag of the Admiral of the China unit; that the flagship should make periodical visits to New Zealand waters; and that there should be an interchange in the service of the cruisers between New Zealand and China, under conditions to be laid down.

"The ships should be manned, as far as possible, by New Zealand officers and men, and, in order that New Zealanders might be attracted to serve in the Fleet, local rates should be paid to those New Zealanders who enter, in the same manner as under the present Australian and New Zealand agreement, such local rates being treated as deferred pay.

"The determination of the agreement with Australia has, of necessity, brought up the position of New Zealand under that joint agreement. I therefore suggest that on completion of the China unit, the present agreement with New Zealand should cease, that its contribution of £100,000 per annum should continue and be used to pay the difference in the rates of pay to New Zealanders above what would be paid under the ordinary British rate. If the contribution for the advanced rate of pay did not amount to £100,000 per annum, any balance to be at the disposal of the Admiralty.

"The whole of this Fleet unit to be taken in hand and completed before the end of 1912, and I should be glad if the squadron as a whole would then visit New Zealand on the way to China, leaving the New Zealand detachment there under its senior officer."

From the difference between the naval arrangements of Australia and New Zealand can be gathered some hints of the difference between the national characteristics of the two young nations. Australia is aggressively independent in all her arrangements: loyal to the British Empire and determined to help its aims in every way, but to help after her own fashion and with armies and navies recruited and trained by herself. New Zealand, with an equal Imperial zeal, has not the same national self-consciousness and is willing to allow her share of naval defence to take the form of a cash payment. Probably the most effective naval policy of New Zealand would be founded on a close partnership with Australia, the two nations combining to maintain one Fleet. But that New Zealand does not seem to desire. She is, however, content to be a partner with Australia in one detail of military administration. The military college for the training of officers at the Australian Federal capital is shared with New Zealand. The present Prime Minister of Australia, Mr Fisher, is taking steps towards securing a closer defence bond with New Zealand.[4]

In an aspiration towards forward Imperialism, New Zealand is fully at one with Australia. But she has the idea that the control of the Southern Pacific, outside of the continent of Australia, is the right of New Zealand, and dreams of a New Zealand Empire embracing the island groups of Polynesia. It will be one of the problems of the future for the British Power to restrain the exuberant racial pride of these South Pacific nations, who see nothing in the European situation which should interfere with a full British control of the South Pacific.