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Rh any person gifted with the least degree of sagacity might have foreseen—the expected claimant made his appearance on the scene. The news flashed along the electric wires in all directions that the German flag was floating over several points along the north-east coast of New Guinea, and on many of the adjacent islands. Fuller information showed that the German Government had formally annexed the whole of the territory marked off by Lord Derby as lying outside the area of the British protectorate, together with the islands of New Britain, New Ireland, and many others in that extensive archipelago. It must be recorded, to vindicate the truth of history, that this intelligence caused a movement of strong indignation in the minds of the Australian Colonists, and vigorous protests against the action of the German Government were addressed by the Australian Agents General to the Imperial Authorities. The feeling of resentment was all the more keen, because the guarantee to pay £15,000 a year towards the expense of the protectorate had been given under a distinct understanding that the whole of New Guinea, excepting the part claimed by the Dutch, should be annexed. Lord Derby, moreover, up till the very hour of the declaration of the German occupation, had denied all knowledge of any such intention on the part of any Foreign Power. With reluctance the Australian Colonists accepted the limitation of area imposed by his lordship; but it was only their fervent loyalty to the British connexion that prevented them from marking in a very emphatic manner their sense of what they held to be a most unjustifiable surrender of the Imperial rights on the part of the Secretary of State for the Colonies.

Arrival of Sir Peter Scratchley.—Sir Peter Scratchley arrived in Australia at the beginning of 1885. His first task was to secure the consent of the several Colonial Governments to share in the payment of the stipulated subsidy for the maintenance of the protectorate. He visited each of the Colonies in succession, and after some demurs on the part of one or two of the governments had been overcome, succeeded in his object. He next chartered a fine steamer, the "Governor Blackall," from the Australian Steam Navigation Company, and on the 20th August sailed for the seat of Government.