CHAP, X] MILITARY AND NAVAL DEFENCE 1277
of 2,575 tons, and two torpedo gunboats of 750 tons and
1,500 horse-power, and its special function was the protection
of the floating trade in Australasian waters. Three cruisers
and one gunboat were to be kept permanently commissioned,
and the rest in reserve in Australasian ports, but ready for
commission whenever occasion might arise. The vessels
were to remain within the limits of the Australasian station,
which was defined in the agreement, and were to be employed
in time of peace or war within such limits, in the same way
as the Sovereign’s ships of war are employed, and beyond
those limits only with the consent of the Colonial Governments.
 The prime cost of the vessels was to be defrayed
from Imperial funds, but the Colonial Governments paid
interest on the prime cost at 5 per cent. up to a maximum
of £35,000 a year, and were to contribute not more than
£91,000 a year for the annual maintenance of the vessels.
The agreement was confirmed by Acts of the Colonial Parliaments
 and of the Imperial Parliament ; it was to last for
ten years, and thereafter to continue until determined on
two years’ notice. The agreement was further extended
after the Colonial Conference of 1902} and was then ratified
by Act No. 8 of 1903 in the Commonwealth of Australia, to
which in 1900 the control of naval forces passed on federation,
 and in New Zealand by Act No. 50, 1903. The new
agreement provided, after modification by a later arrangement,
 for one first-class armed cruiser, three second-class
cruisers, and five third-class cruisers, and a Royal Naval
Reserve of 25 officers and 700 seamen and stokers. One
ship was to be kept in reserve, three to be partly manned
for drill purposes for training the royal naval reserve, and
the remainder to be kept in commission and fully armed.
Australasians were, as far as possible, to man the three drillships
 and one other vessel, but they were to be officered by
Royal Naval and Royal Naval Reserve officers. One-half
of the annual cost of maintenance was to be borne by the
Dominions, but not more than £200,000 was to be paid
by Australia and than £40,000 by New Zealand, sums
* See Parl, Pap., Cd. 1299; Commonwealth Act No. 8 of 1903.
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