There is a sensational but unconfirmed rumour in London that practically the whole of the German Fleet at Scapa Flow has been sunk by their crews. The German flag was hoisted at the outset.

The report was exaggerated, but the British Admiralty states that certain of the interned German ships at Scapa Flow have been sunk and abandoned by their crews. The latter will be detained in safe custody. They were attending to the upkeep of the vessels during the internment under the terms of the armistice.

It is stated that the Germans sank 46 out of 72 warships, including nine or ten battleships, all five battle-cruisers, five to eight light cruisers, and 27 to 49 destroyers. The total tonnage sunk approximates 400,000 tons. The largest ship sunk, the Bayern, is of 28,600 tons. The fleet is worth 70 million pounds.

The German ensign was hoisted on all the ships before they were sunk. The Baden is now flying the white ensign over the German flag. The first warship was sunk at midday, the others settling down until 4.30 in the afternoon. When the last dreadnought turned turtle, several Germans swam to the Island of Gaint.

Arrangements were made to board the German ships on Monday in the event of peace being signed. Thus they would have passed into the possession of the Allies. The largest ships have been sunk in a depth of 120 feet.

The newspapers are aghast at the Scapa Flow sensation, and demand an inquiry, pointing out that the ships were placed in the custody of the British Navy as trustee for the Allies.

The military authorities have begun the distribution to the next of kin of all who have fallen in the war of a scroll bearing the following inscription:

"He whom this scroll commemorates was among those who left all that was dear to them, endured hardness and faced danger, and finally passed out of the sight of man by the path of duty and self-sacrifice."

A Royal letter accompanies each scroll.

The official correspondent with the Australian Imperial Force telegraphs: Already peace is having her gentle way on the scarred surface of some battlefields. Summer flowers deck many graves, old women are seen filling shell holes and men ploughing where last year guns roared day and night. The original inhabitants are drifting back to their villages, and patiently rebuilding from the ruins.

A strange sight is the many new homes built in the old ruins, with battered walls towering above new corrugated iron roofs. The German prisoners are working everywhere, and also many companies of Chinese, rolling up neat bundles of wire in the Hindenburg line.

Mont St. Quentin is little changed, with the Elsa trench plainly visible, containing much soiled equipment. Round Belle Eglise the country is cleared of wire, while the valley between the Somme and Amiens, also the Villers Bretonneux road, last summer alive with guns, is now resting quietly beneath cultivation. Ploughmen pass up the hillside of Blangy-Tronville, familiar to the infantry supporting the Villers Bretonneux line last year. Not a single brick marks Pozieres, but the concrete top of the Gibraltar dug-out shows the battle site. The famous machine gun trenches one and two are lost in a mass of grass-grown shell holes.

Solitary tree stumps indicate Courcelette. Gaudecourt, bringing memories of the Somme winter of 1916, shows grass-covered brick mounds where houses stood. At Bullecourt, the "OG" trenches one, and two, where the Australians entered the Hindenburg line in 1917, are plainly visible, with huge traverses. Noreuil village is totally gone, with the famous sunken road under reconstruction, although many shelters are still standing. Above Morcourt, where the Fourth Division advanced in August 1918, the ploughman's voice mingles with the lark's song, and old women are seen quietly filling the shell holes.

Everywhere famous landmarks are disappearing, although it will be many years before the country assumes full peace conditions.

Mr Fisher, the High Commissioner for Australia, publishes a denial of the statement in the London papers that English wives of soldiers receive a hostile reception in Australia. He states that marriages are occurring in greater numbers than transport is available for.

There were 7000 wives and 3000 children at the time of the armistice, and there were 200 marriages in a recent week.

Sir Ronald Munro Ferguson, the Governor-General, on Tuesday received an official message announcing that the Germans had agreed to sign the Peace terms unconditionally.

Mr Watt, the Acting Prime Minister, said: "The Government will send its peace message to the people when celebrations are conducted throughout the Empire. Today I will say that such a triumph of the navies and armies of the Empire and its Allies, and the statesmanship of the Peace Conference, asks from us a deep thankfulness. 'Time hath, my lord, a wallet on his back, wherein he puts alms for oblivion,' said old Ulysses.

"If all the evil things of the war that should be forgotten are forgotten, the wallet will be full. There are others that must never be forgotten, but indelibly written on the minds of our people.

"Chief amongst these are the enduring faith of our fighting men and war workers through the darkest days of the war in the justice of our cause and its ultimate triumph, now happily won, and the strong conviction that forty years of mechanical preparation for war would not weigh against the simple but resolute spirit of a nation strong in its sense of human right."

The announcement of Germany's acceptance of the terms of peace as dictated by the Allies has been followed by the publication of the official proposals in regard to the celebration of the signing of the terms.

During the days of war, people often talked of the great doings there would be on Peace Day. It was to be a day of great rejoicing on account of the lifting of the terrible burden. That day came when Germany accepted the armistice terms on November 11, 1918. It was that cable message which lifted the burden and excited such a wonderful spontaneous outburst of enthusiasm.

No official program could bring about such demonstrations as were then witnessed, and in the minds of the children of today Armistice Day will always live as the Peace Day which was talked about while the war was going on.

It is, however, only right that the actual signing of the Peace terms should be made the subject of some celebration.

It is at present proposed that the function be held early in August.

The arrangements must be subject to the position in regard to the influenza epidemic. It would be criminal folly to bring together masses of children or adults under such circumstances as those which prevail today.

Everyone hopes that by the date of the celebration the position will be vastly improved, but all the arrangements must be made subject to health considerations.

There is also the matter of expense to be considered.

There is no justification for the adoption of any official program involving the expenditure of large sums of money. No expenditure could recreate the position on Armistice Day, and therefore it would be impossible to again excite the enthusiasm which swept over every part of the Commonwealth. That was the day when the people rejoiced. They made their own arrangements and gave vent to their feelings in the way they chose.

The coming ceremonies will be of a much more formal character. They will, no doubt, be recorded in the pages of Australian history, and it is right that the children should be given some little memento of the day.

The end of the first phase of the struggle has come and the nation has now to face the second phase, which is the problem of reconstruction under the vastly altered world conditions as a result of the war. Peace Day should take the form of a solemn covenant to build a nation worthy of the tens of thousands of Australians who laid down their lives.

The position which has to be faced now that the war is over contains some stupendous problems, and the strength and wisdom of Australian nationhood will be largely decided on the manner in which those problems are solved.

It is reported from Paris that owing to no communication having been received from Germany it is not expected that the Peace Treaty will be signed until Saturday or Monday.

The Allies are astonished that they have not been informed of the names of the German signatories of the treaty. Marshal Foch and the Allied Army Chiefs have been warned to remain on the alert.

The Allies will probably send an ultimatum to Germany demanding the immediate appointment of plenipotentiaries. It is reported from Berlin that the Foreign Minister refuses to go to Paris to sign the Treaty.

Field-Marshal von Hindenburg has resigned the command of the German Army.

The official correspondent with the Australian forces telegraphs: Few Australians are unfamiliar with Armentieres, for on first coming to France they were usually sent to that sector for experience in the front line. In 1916 many happy moments were spent there, although within easy shelling distance. But next year it was completely ruined.

Many civilians are now returning, and the first estaminet is quaintly named "A la Renaissance," while a tiny butcher's shop is built in the ruins of a large house. Visitors arrive daily, and a postcard shop indicates returning civilisation.

The village of Fleurbaix has been entirely destroyed, although the people are rebuilding their homes from material in the trenches and gunpits. The cemetery is in good order, with substantial crosses and all graves named.

In front of Fromelles the breastworks are still in good condition.

The position of the front line is the same as when the Australians charged in July, 1916, and felt hats and equipment were picked up in No Man's Land. Delaporte and Delance farms have quite disappeared, but plenty of water is visible in the old German lines. At Hyde Park corner, familiar to every soldier who fought in the Ploegsteert section, Chinese are busy demolishing the famous catacombs in that labyrinth of underground dugouts.

The country round Messines Ridge is a confused mass of shell holes and old trenches. The latter are being filled in by Chinese labour, which is also removing the revetments that cost so much anxiety and so many lives to put in. The only thing now heard on that terrible battlefield is the lark's song, with the distant voices of chattering labourers.

Mount Kemmel stands one bald ruin, destitute of all trees.

On opposing Ypres two shattered walls indicate the famous Cloth Hall, but a small White Hotel is busy attending to visitors.

Round Zonnebeke Lake prisoners are working on white houses, showing brilliant red tiled roofs, springing up near the ruined church and along the main road.

At Polygon Wood Australians are seen working the foundations of the memorial of the Fifth Division.

It is officially announced that the Germans will sign the Peace Treaty.

The German delegation has been appointed, and is expected to arrive at Versailles on Saturday. The military revolt in Germany has been averted.

The generals have replied favourably to Herr Noake's request to support the Government. General Groener, Chief of Staff, has withdrawn his resignation until the crisis is over.

It is reported from Berlin that the counter-revolution is asserted to have been planned in the event of the peace terms being accepted.