This sea-board of the continent, the rim of which alone is or is likely to be thickly settled is 8000 miles long. A country so situated and populated is manifestly exposed, in an unusual degree, to naval attack. It is this sense of exposure which has in large measure promoted the idea of Federation among the colonies themselves. It has stimulated the work of harbour defence, important for the whole Empire as for Australia itself. It has led to the joint arrangement between the mother-land and the various colonies for an addition to the Australian Squadron. The terms of this arrangement are worthy of note. The various colonies jointly agree to contribute the sum of £126,000 per annum, partly as interest on the capital employed in construction, partly towards the maintenance of a certain number of armed ships to be reserved exclusively for service in Australian waters. To carry out this arrangement the amount invested by the mother-country in the ships, seven in number, already constructed and in active service, has been close upon a million sterling. The skilled officers and trained seamen are also supplied from the Royal Navy. It is specially agreed that any expense incurred beyond £126,000 shall be borne by the Imperial Treasury, that the ordinary strength {211} of the Australian Squadron shall not be reduced on account of this local addition to naval defence, and that during the ten years over which the arrangement extends the seven ships cannot be withdrawn from Australian waters. Surely no young country with an increasing necessity for coast defence due to enlarged wealth and commerce ever secured it on terms to compare with these. No better illustration could be given of the advantage which the colonies may derive from joint action with the mother-land. The Australasian colonies aspire, and reasonably aspire, to dominance in the Pacific. That manifestly depends on having at command the naval power which can be best secured by co-operation with the Empire. The creation of substantial interests in the heart of the Pacific, such as would be involved in the construction of cable, postal and commercial routes, linking Australia and New Zealand with Canada in one direction, with the West Indies and Great Britain in another (when the Panama route is open), interests which the whole Empire would be concerned in securing, would do more than anything else to give effect to Australian aspirations.