Of all the subjects of imperial importance the most abiding interest attaches to the navy. And two things with regard to the navy force themselves with special urgency at the present time on the minds of all who are really in the habit of thinking imperially. One is the enormous height to which naval expenditure in this country has now reached. The other is the problem of discovering a sure test by which we may satisfy ourselves whether all this expenditure is really justified or not.

I venture to sum up the naval position thus:
1. The two-Power standard, whatever may have been its usefulness ten or fifteen years ago, has ceased to have an intelligible meaning now, and it has not, in fact, been applied.
2. Many elements of naval strength, some but not all of which are indicated in this article, have been uniformly left out of account in the current estimates of relative position.
3. The whole naval defence of the vast British Empire, numbering 400 million inhabitants, falls, less 1 per cent., upon the forty-one millions, mostly poor people, of the United Kingdom.
4. However defective may be the hitherto accepted standards, it is extremely difficult to suggest an alternative standard.
5. Our system of naval expenditure, such as it has been for the last ten years, undoubtedly involves increased expenditure in the aggregate, unless we reduce the shipbuilding vote.
6. As we have long declared that our naval budgets are determined by the naval budgets of the rest of the world, and as other nations make, or would if challenged make, the like declarations for themselves, the only hope of relief from a ruinous competition in naval expenditure would seem to rest on international agreement.
7. Both parties in this country agree in declaring such an agreement to be eminently desirable. The sole point of difference is the question who should begin. The minority in opposition, which within a few months may be the majority in power, has voted, practically without any dissent, that our supreme position in naval strength makes it the duty of Great Britain to take the initiative.