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randum (published in England on Dec. 5 as a parliamentary paper) drawn up by the Admiralty for the information of the Canadian Government as to the existing international situa- tion from a naval point of view; and Mr. Bordenread this out.

As regards the three Canadian battleships now to be added to the navy, Mr. Borden pointed out that, under the Admiralty, the Empire now had what he had convinced himself was the most thorough and effective naval organization in the world, of which it was the best Canadian policy to make use. The hazardous and costly experiment of building up a separate naval organization for Canada was quite unnecessary, and in any case could only provide a poor and weak substitute. In the present emergency the Canadian ships were best employed as part of the Imperial navy under the Admiralty of the mother-country:

" Those ships will be at the disposal of His Majesty the King for the common defence of the Empire. They will be maintained and controlled as part of the Royal Navy, and we have the assurance that, if at any time in the future it will be the will of the Canadian people to establish a Canadian unit of the British Navy, these vessels can be called by the Canadian Government to form part of their Navy, in which case, of course, they will be maintained by Canada and not by Great Britain. In that event, there will, neces- sarily, be reasonable notice, and indeed, Canada would not desire or suggest the sudden withdrawal of so powerful a contingent from any important theatre in which the naval forces of the Empire might be exposed to severe and sudden attack. In the meantime I am assured that special arrangements will be made to give Canadians an opportunity of serving as officers in these ships. . ..

" The ships will be built under Admiralty supervision in the United Kingdom for the reason that, at present, there are no ade- quate facilities for constructing them in Canada. The plant required for the construction of dreadnought battleships is enormous, and it would be impossible at present to have shipbuilding in this country on such a scale. In any case, only half could be built in Canada, because the machinery for armour and guns would, necessarily, be constructed or manufactured in the United Kingdom. The addi- tional cost of construction in Canada would be about $12,000,000 for three, and it would be impossible to estimate the delay. No one is more eager than myself for the development of the shipbuilding industries in Canada, but we cannot, upon any business or economic considerations, begin with the construction of dreadnoughts, and especially we could not do so when these ships are urgently required within two or three years at the Outside for rendering aid upon which may depend the Empire's future existence. According to my con- ception, the effective development of the shipbuilding industries in Canada must commence with small beginnings and in a businesslike way. I have discussed the subject with the Admiralty, and they thoroughly realize that it is not to the Empire's advantage that all shipbuilding facilities should be concentrated in the United Kingdom. I am assured, therefore, that the Admiralty are prepared in the early future to give orders for the construction in Canada of small cruisers, oil-tank vessels, and auxiliary craft of various kinds. The plant required is relatively small as compared with that which is necessary for dreadnought battleships, and such an undertaking will have a much more secure and permanent basis from the business standpoint. For the purpose of stimulating so important and necessary an industry we have expressed our willingness to bear a portion of the increased cost for a time at least. I see no reason why all the vessels required in future for our Government service should not be built in Canada, even at some additional cost. In connexion with the development of shipbuilding I would not be surprised to see the establishment of a high class of engineering works which will produce articles now imported and not at present manufactured in Canada. Therefore, although the sum which we propose to devote for necessary naval aid at this critical juncture is to be expended in Great Britain, yet we believe that this step will result, under the conditions which I have described, in the very marked development of more than one industry in Canada, and that, even from a purely material standpoint, the step has much to commend it."

The Canadian expenditure now proposed was, in Mr. Borden's view, a moderate one, regarded not as the beginning of a system of periodical contributions, but as an emergency aid at a moment of crisis:

" If we should neglect the duty which I conceive we owe to our- selves, and if irreparable disaster should ensue, what will be our future destiny? Obviously as an independent nation or as an impor- tant part of the great neighbouring republic. What then would be our responsibilities, and what would be the burden upon us for a protection on the high seas much less powerful and less effective than that which we enjoy to-day? Take the case of one nation whose territory, resources, population and wealth may fairly be compared with those in Canada. The naval estimates of Argentina for the four years from 1909 to 1912 inclusive amounted to $35,000,000 (7,000,- ooo). No information is available as to the exact proportion of the

last-mentioned sum which has been appropriated for naval pur- poses, but it is understood that the far greater portion is for naval construction. It is safe, therefore, to estimate that during the past four years Argentina has expended for naval purposes not less than from $65,000,000 to $70,000,000 (13,000,000 to 14,000,000). The Federal and State expenditure of the United States comprises a total outlay for armaments of between $250,000,000 and $300,000,000 (50,000,000 and 60,000,000), or at the rate of $2.75 per head. Similar expenditure by Canada would mean an annual outlay of some $20,000,000 to $25,000,000, or between $80,000,000 and $100,000,000 during the same period.

" It is apparent, therefore, that the aid which we propose to bring at this juncture is of a moderate and reasonable character. For 45 years as a Confederation we have enjoyed the protection of the British Navy without the cost of a dollar. ... So far as official estimates are available, the expenditure of Great Britain on naval and military defence for the provinces which now constitute Canada during the igth century was not less than $400,000,000 (80,000,- ooo). Even since the inception of our Confederation, and since Canada attained the status of a great Dominion, the amount so expended by Great Britain for the naval and military defence of Canada vastly exceeds the sum which we are now asking Parliament to appropriate. From 1870 to 1890 the proportionate cost of the North Atlantic Squadrons which guarded our coasts was from $125,000,000 to $150,000,000 (25,000,000 to 30,000,000). From 1853 to 1903 Great Britain's expenditure on military defence in Canada runs closely to $100,000,000."

As regards the voice which it had been arranged that Canada should have on the Committee of Imperial Defence, Mr. Borden said :

" With increasing power and influence there has necessarily come, by sure and gradual steps, a certain development in our relations with the United Kingdom and the other dominions. ... In this constitutional development we are necessarily confronted with the problem of combining cooperation with autonomy. It seems most essential that there should be such cooperation in defence and in trade as will give to the whole Empire an effective organization in these matters of vital concern. On the other hand, each dominion must preserve in all important respects the autonomous Government which it now possesses.

" The responsibility for the Empire's defence upon the high seas, in which is to be found the only effective guarantee of its existence, and which hitherto has been assumed by the United Kingdom, has necessarily carried with it the responsibility for and the control of foreign policy. . . . When Great Britain no longer assumes sole responsibility for defence upon the high seas she can no longer under- take to assume responsibility for and sole control of foreign policy, which is closely, vitally, and constantly associated with that defence in which the dominions participate. . . . The great dominions, sharing in the defence of the Empire upon the high seas, must neces- sarily be entitled to share also in the responsibility for and in the control of foreign policy. Not only His Majesty's ministers, but also the leaders of the opposite political party in Great Britain, have explicitly accepted this principle. . ..

" I have alluded to the difficulty of finding an acceptable basis upon which the great dominions cooperating with the mother- country in defence can receive and assert an adequate voice in the control and moulding of foreign policy. We were brought closely in touch with both subjects when we met the British ministers in the Committee of Imperial Defence. That committee is peculiarly con- stituted, but in my judgment is very effective. It consists of the Prime Minister of Great Britain and such persons as he may summon to attend it. Practicaljy all the members of the Cabinet from time to time attend its deliberations, and usually the more important members of the Cabinet are present. In addition, naval and military experts and the technical officers of the various departments con- cerned are in attendance. A very large portion of the work of the Committee is carried on by sub-committees, which often are com- posed in part of persons who are not members of the general com- mittee itself, and who are selected for their special knowledge of the subjects to be considered and reported upon. The amount of work which thus has been performed during the past five or six years in particular is astonishing, and I have no doubt that it has contributed largely to the safety of the whole Empire in time of peril.

" The Committee is not technically or constitutionally responsible to the House of Commons and thus it is not supposed to concern itself with policy. As so many important members of the Cabinet are summoned to attend the Committee, its conclusions are usually accepted by the Cabinet and thus command the support of the majority of the House of Commons. While the Committee does not control policy in any way and could not undertake to do so as it is not responsible to Parliament, it is necessarily and constantly obliged to consider foreign policy-and- foreign relations for the obvious reason that defence, and especially naval defence, is inseparably connected with such considerations.

" I am assured by His Majesty's Government that, pending a final solution of the question of voice and influence, they would welcome the presence in London of a Canadian minister during the