Almost the last recorded words of Mr. were a spirited protest against the [unclear: gard] of Australasian interests display-[unclear: by] Britain in the settlement with [unclear: re] the New Hebrides difficnlty, and [unclear: ning] of the perils which must menace [unclear: British] Empire in Australasia from the [unclear: nce] in latitudes so close to our own [unclear: many] settlements belonging to other [unclear: pean] nations. Thirty or 40 years be-[unclear: aim], when the future of the Pacific [unclear: to] loom on the horizon, Sir George [unclear: planned] a confederation of the is-a time when they could, had we have been "all-red," but the [unclear: e] met with little favour and scant [unclear: sy] in London. To the Colonial [unclear: such] dreams as these were distaste-[unclear: and] those who dreamed them were [unclear: en]. These great colonial Imperial-[unclear: have] gone, and those in power to-day [unclear: an] indifference and want of [unclear: loresight] [unclear: grad] to island interests that are diffi-[unclear: to] imprehend. If Sir George Grey [unclear: had] his way, the British Hag would [unclear: perhaps], have been flying across [unclear: Pacific] from east to west, for all these [unclear: might] have been ours, and Kip-will-known lines have been no but an actuality—

Never was isle so little.
Never was sea so lone.
But over the scud and the palm tree
An English flag was flown.

[unclear: Other] nations have taken the gifts that [unclear: fused;] other flags fly where ours [unclear: asked] for other nations are busy [unclear: ng] their trade find extending their [unclear: ions]. And New Zealand's hold on [unclear: lands] is being loosened, and our trade [unclear: dually] slipping away.

Our Foreign Neighbours.

Mr. Deakin, the Federal Prime Minister, when in London last year, made an allusion in a speech at the Pilgrims' Club to the propinquity of European Powers in the Pacific being likely to prove a source of serious apprehension in the future. "We have," he remarked, "some European neighbours in the South Seas who would not have been there if the British Government had listened to early warnings." And a glance at the map shows that he might have said a good deal more on the subject without overstating the position. France has New Caledonia, the Loyalty Islands, the Society Islands (Tahiti). the Paumotu Group, the Marquesas, and several smaller groups, while she exercises a powerful influence in the New Hebrides. Germany owns the Bismarck Archipelago (comprising New Britain and other large and valuable islands), and a large slice of New Guinea, part of the Solomons, the two largest islands of the Samoan Group, the Marshall Islands, and the Carolines, Pelew Group, and Ladrones, the three last-named being sold by Spain to Germany after the Spanish-American war for a cash bid of about £850,000. America has got Hawaii. Tutuila and other islands in the Samoan Group, Guam in the Ladrones, various scattered islands in the North Pacific, and the Philippines. Practically every atoll has been located and pre-empted by one or other of the great Powers, and there is no use in our crying over spilt milk now.

It is obviously possible that Great Bri tain's placid acqlicence in the gradual approach of foreign nations toward Australasia may cost us a heavy expenditure in defence some day, but leaving that as-poet of the question for the present, what are Australia and New Zealand doing to strengthen their footing in this teritory that ought to be so largely our own, and to promote a more intimate association with the islands in sentiment and action?

Strenuous Competition.

We have been told often enough what Franco and Germany are doing, We know, for example, how in the New Hebrides France enconrages her subjects by subsidie and superior transport facilities, and further assists them by allowing their produce into Noumea practically duty free; and how Germany, by means of subsidies to shipping and colonisation companies in steadily pushing her way into the island trade.

How, first of all, is Australia meeting her competitors? Mr. Deokin, Mr. Reid, and other Australian statesmen have at various times talked vaguely of a "broad policy of dealing with the islands"—these words have been used by Mr. Deakin a dozen times—-but no serious attempt has ever been made by him or any of his predecessors to formulate such a policy, and the heavily protective Federal tariff still applies to British Pacific islandy the same a to foreign countries. And yet—and it does not say much for New Zealand commercial enterprise—though Australia's attitude in regard to the islands is thus actually repellant, she is garnering much more of their trade than New Zealand, with all its advantages. Take Fiji, with which Auckland more than any other city of the southern hemisphere ought to be regarded us geographically en rapport, and what do we find? The figures for 1907 show that the total imports into that colony were valued at £600,000, of which Sydney contributed £450.000, and the total exports were valued at £900,000, of which £275,000 went to Sydney. Now a steamship service with Melbourne is to be established, which will mean still more trade for Australia, and still less for New Zealand. Take Tonga, right at our very doors, whose trade up till a very years ago was almost exelusrvely New Zealand's and here again we find that New Zealand's connection is gradually diminishing, and that more strenuns compitors are now providing the bulk of the requirements of this little island kingdom. Last year Tonga's total imports were valued at £97,820, of which goods to the value of £42,969 were supplied bv New Zealand, £36,670 by Australia (as against £22T000 in 1904 and £32,000 in 1905) and £14,627 by Germany, the last-named figures [unclear: includig] German goods obtained via Samos Even in the Eastern Pacific—even it the Cook and other islands which have [unclear: been] annexed by New Zealand, and whose [unclear: merchants] should be able to hold the field against all- comers-Australia on the one side and Tahiti and America on the other are slowly but steadily making headway.

There never was a grander opportunity for a rapidly-expanding country such [unclear: as] New Zealand undoubtedly is to find a market for its products and mamufacturd has at its own doors, and our merchants have only themselves to blame fur allowing this opportunity to slip.

New Zealand's Position.

It is an extraordinary position that Australia, with her high tariff wall against island produce, should be able with the foreigners to collar the trade that should rightly belong to New Zealand, which admits island produce free, whether it comes from British or from foreign possessions, and has the additional advantage of being much closer to Fiji, Tonga, Samoa, and the Eastern Pacific than Australia. Why is it? Practically the only things that island people now buy from us are produce and meats. Scarcely any manufactured articles are exported. "Things are too dear in New Zealand,"the island trader will tell you if asked why he doesn't make more of his purchases at the place where he sells his fruit. The Sydney man, the German, the American, and Frenchman work on the lines of small profits and quick returns, but the New Zealand merchant want to get rich all of a hurry. This, at any rate, is what the island people say, and after a study of the price lists, and failing to find any other satisfactory reason by which the dwinding away of the trade can be explained, I am compelled to come to the same conclusion Why things should be so much dearer here than in Sydney, I am not going to attempt to explain.

In the matter of freights, however, it should here be pointed out New Zealand gets no advantage ovar Australia—as far as Fiji, Samoa, and Tonga are concerned—though she lies so much nearer to those island. One would naturally think that to carry good, say, to Tonga, which is only a four days' run from Auckland, would coat less than to carry them for 14 days from Sydney, But curiously enough, it doesn't, This preferential treatment of Australian goods, for that is what it amounts to, operates very unfairly against New Zealand. The Union Steam Ship Company, as everyone known, has a monopoly of this trade, and, being a New Zealand company, the favouritism shown to Australia is one of those things that is hard to understand. There page 5 [unclear: ve] indeed, quite a lot of freight a [unclear: noma] for the carriage of goods to [unclear: Rarora] where the Union Company has no petition 40s per ton is charged; to twice the distance, where there is [unclear: spetition], the rate is only 35s. The [unclear: reply] in Rarotonga cannot, of couirse, [unclear: in the] equity of this. Lots of other in-case could be given.

Mutual Concessions.

Since New Zealand admita their produce free [unclear: duty], Fiji. Samoa, Tonga, Tahiti, and [unclear: the] other islands that benefit by this [unclear: conmison] might fairly be asked to lower the [unclear: posts] on at least some of the articles that we supply. In this way New Zealand merchants would be placed in an [unclear: excepcially] advantageous position over other competitors, and by reducing the margin of their profit a little might easily, since [unclear: trade] would naturally flow this way, build [unclear: up a] vast commerce with these islands, [unclear: giving] employment to our seafaring [unclear: population] are opening fresh channets for [unclear: enterprise]. And there is no reason why we [unclear: could] not go further afield. At present [unclear: ur] trading operations are confined to the [unclear: preps] near at hand, Why not—and to [unclear: the] wise this one hint should be sufficient—why not exploit the New Hebrides (which [unclear: ce] actually belonged to New Zealand), New Caledonia, the Solomons, and the [unclear: samerous] other groups and detached islands, whose trade is worth having now, and will be more so later on?