§ At the Colonial Conference, held in London during 1887, a special agreement was entered into between the Home Government and the representatives of the Australasian Colonies, under which a joint financial responsibility was established between the contracting parties for the creation and maintenance of a sea-going squadron of ships of war to protect the commerce of the Empire in Australasian waters. The peculiarity of the arrangement consisted, not merely in the establishment of a financial partnership between England and Australasia for this specific purpose, but in the apportionment of the liability so incurred. The Mother Country engaged to bear the whole cost of building, arming, and equipping the squadron; on the other hand, the Colonies undertook, when the vessels were commissioned, to meet the whole cost of their maintenance and manning up to a maximum of £91,000 annually during time of peace, and to pay in addition a sum of £35,000 annually for ten years, as a contribution towards the original cost of construction. The type, size, and special qualities of the vessels to be built will be hereafter described, but they will cost, when complete, between £800,000 and £900,000. Special provision 888 889 will be made to meet this liability under Act of Parliament, the clauses of which will explain the financial arrangement proposed. It is estimated that £450,000 to £500,000 will be required to meet the cost of building these vessels during the financial year 1888–89, and a somewhat lesser sum during the following year 1889–90, to complete and render them ready for commission. The ships will be thus built and completed in two years. At the end of that time, the ships being in commission, an annual sum of £91,000 towards maintenance will be paid by the Colonies as an appropriation in aid of Navy Votes, and Naval Funds will for ten years subsequently receive this assistance; and in like manner the Imperial Exchequer will be credited for ten years with an annual payment of £35,000. By promptly performing our portion of the bargain, and paying for it in two years, the Navy will be augmented at the end of that period by seven efficient modern sea-going ships, and naval funds will then have a contribution for ten years to come in reduction of the sums annually voted by the Imperial Parliament. On the termination of the ten years the vessels will become the exclusive property of the British Government.