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 under the control of the Commander-in-Chief on the Australian Station, and are not to be taken from Australian waters without the consent of the Colonies. 4. By reason of the new agreement, no reduction is to take place in the Imperial Squadron on the Station. 5. The vessels shall consist of five fast cruisers and two torpedo gunboats; of these, three cruisers and one gunboat are to be always kept in commission, and the remainder in reserve. 6. (a) The first cost of vessels is to be paid out of Imperial Funds, (b) The Colonies are to pay the Imperial Government interest at 5 per cent, on the prime cost, such interest not to exceed £35,000. (c) The annual charge for maintenance is to be borne by the Colonies, but this is not to exceed £91,000. 7. Imperial Government to replace any vessels lost. 8. Agreement to last for ten years. 9. In time of peace two vessels of the Squadron to be in New Zealand waters.

COLONIAL SHIPS OF WAR FOR HARBOUR DEFENCE, ETC.

Cerberus, double screw, iron armour-plated turret ship, 4 18-ton M.L. guns, 4 Nordenfeldts, 3,480 tons, 1,660 h.p.

Nelson, training ship, 22 guns, 1 Gatling, 2,730 tons, 500 h.p. Commander, R. M. Collins.

Albert, steel gunboat, 4 guns, 2 Nordenfeldts, 350 tons, 400 h.p.

Also, 3 armed steamers, carrying 6 guns, 2 Catlings, and 4 Nordenfeldts; 3 torpedo boats, and 3 torpedo launches, carrying 14 Whitehead torpedoes, 2 Hotchkiss guns, 1 Nordenfeldt, and fitted with spar torpedoes.

Protector, cruiser, 6 guns, 920 tons, 1,641 h.p.