4—Nauru Island.

The unique disposal of the small island of Nauru calls for some explanation. It was claimed by Australia on the ground of the right of conquest, a small party from an page 207Australian light cruiser having landed and taken formal possession of the territory. Mr. Massey, on behalf of New Zealand, urged a form of control different from that proposed by the Council of the allied powers in respect of the former German colonies in the Pacific. He pointed out in the course of memoranda to the Colonial and Foreign Offices, and also to the British Empire delegation, that Nauru differed from other enemy possessions in that it did not present any problem as regards the development of backward inhabitants. The island contained rich deposits of phosphate rock, which had been worked first by a German company and, later, by a British company under lease. The value of the deposits was estimated by experts to be considerable. In view of the pressing necessity for the supply of phosphates to producing countries, such as New Zealand and Australia, he suggested that the island should be held under a form of mandate which would conserve the interests of both, and also of Great Britain. The Colonial Office thought that the mandate should go to the British Empire so that all their interests might be considered. To this Mr. Massey was willing to consent. Australia's representatives objected, urging that their forces had taken possession of the territory. The reply to this was that the island was seized for the Empire and not for any part of it. The Council adopted the views of the British Colonial Office, and New Zealand's plenipotentiary.

The main points of the subsequent agreement arrived at between the British Government, the Government of the Commonwealth of Australia, and the Government of the Dominion of New Zealand are these:—The administration of the island is to be vested in an Administrator to be appointed for the first five years by Australia and thereafter by the three Governments; all expenses have to be defrayed out of the proceeds of the sale of the phosphates; the title to the phosphate deposits is to be vested in a Board of Commissioners, while the present interests of the Pacific Phosphate Company shall be converted into a claim for compensation at a fair valuation; compensation to be paid proportionately by the three Governments; the Commissioners must dispose of the phosphates for the agricultural requirements of the page 208United Kingdom, Australia, and New Zealand at a fixed price f.o.b., so far as these requirements extend; surplus output may be sold at the best price obtainable. The allotment of proportion of supply is 42% each to Great Britain and Australia, and 14% to New Zealand, this allotment to be readjusted at the end of every five years.