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1 June, 1911.] Declaration of London. [3rd Day. Mr. BATCHELOR—co^. if there is the possibility of ships being sunk the underwriters will raise their charges, to the great detriment of trade. So that anything which does make it more difficult in that respect is likely to cause serious damage to trade. On the other question, as to the conversion of merchantmen on the high seas, I am well aware that the Government, through its representatives, did everything it could at the Conference to bring about some alteration in that respect. I think, all the same, I ought to echo the opinion of all of us that it is a great pity they were not successful in securing some limitation. Nothing, I think, would be more likely to cause apprehension in Australia or to cause greater danger to other portions of the Empire which lie at a considerable distance from where our naval supremacy is undoubted. Nothing would be likely to cause us so much difficulty or to do so much damage as that power of converting merchantmen into war vessels without any previous notice whatever —by merely hauling down one flag and putting up another. Until some international agreement has been arrived at in that respect undoubtedly the law of naval warfare is very largely chaotic, and T think that stands out above anything else as requiring some alteration. Mr. Pearce suggests to me that I should also refer to the question of the base in Article 34 I might just say that that, of course, wants a better definition. It appears to us practically to close up the United Kingdom altogether, and if something could be done by which to make it clearer it would be a very great advantage to all concerned. I do not want to take up any more time upon this- question, but I want to put it to the Government whether it might not be possible yet before this Declaration is ratified (it is signed already), and the whole matter is set aside for probably a considerable number of years, to try and get some alteration on one or two of these points that are most in dispute, or a little clearer definition at any rate. Tf a clearer definition were obtained, that in itself would be a considerable gain. Therefore, while we do not ask the Government to decline to ratify this Declaration if, in their opinion, on the whole the advantages are much greater than the disadvantages—and that is as I understand the position the Government take up, because the question must be looked at as a whole and not merely with regard to what you are not able to accomplish : if any alteration could be made on these points it would be a good thing for the Empire generally, because it would bring about a feeling of safety, a feeling of general contentment and satisfaction where the very greatest apprehension is now felt. For instance, one cannot help seeing that opinion amongst people who appear to be well qualified to judge is very much divided. We have eminent jurists and we have men whom we are accustomed to consider very great authorities as naval experts —a large number of admirals, we have men who have studied the constitutional question, taking up opposite sides on this question, and therefore, if anything could be done at this late stage to still further obtain some advantage, T think it would be well worth doing, and that it would redound to the credit of the Government. T may say, of course, that the principal point we urge is the point I touched upon first, in the first paragraph—that in the future, if at all practicable, the Dominion should be consulted on such matters. The PRESIDENT : I am sure the Conference is very much indebted to the representatives of Australia for the extremely lucid and moderate way in which they have put forward their criticisms; and, having regard to the very technical and complicated character of some of the aspects of this subject, I think it might tend to simplify and possibly abridge discussion if I ask Sir Edward Grey to interpose now and deal at once with the points which Mr. Fisher and Mr. Batchelor have put forward, and we will go on with the discussion afterwards. Will that suit you, Sir Joseph ? Sir JOSEPH WARD : Certainly. Sir EDWARD GREY : I will try to meet the points which Mr. Fisher and Mr. Batchelor have raised, arid I would take first the points which have been raised on the merits of the Declaration which, I think, Mr. Fisher and

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