From his earliest meetings with Howard Vincent in January 1893 to his discussions with Robert Meade in March and his close study of George Sydenham Clarke's papers on the voyage to Melbourne, Hutton busied himself considering exactly how he might initiate a federal defence scheme or system for Australia. Success in this regard would make a mark and his reputation. He was therefore, in his ownwords, ‘determined to risk all in my efforts … to bring about [such] a scheme’. It was an ambitious objective. Much stood in Hutton's way. The issue of a federal defence plan for the Australian colonies had been under discussion from the time of the Carnarvon Commission, but little had eventuated. By 1893, in addition to political inertia, colonial parochialism and lack of funds that had long acted to stifle such an initiative, the apparent closeness of political union encouraged opposition to interim defence measures. So too the fundamental question of who or what would control a federal military force in the absence of political union had never been adequately addressed. The idea of a British federal military commander, as suggested by Bevan Edwards, was out of the question. Nor, without executive authority (or even representation from New South Wales), could it be the Federal Council. Indeed, Sir Henry Parkes, for one, believed that the establishment of a federal defence system would take more effort to effect than political Federation itself. Once set on a course, however, as he had already and amply demonstrated, Hutton possessed an ability to ignore any and all realities that suggested otherwise. His efforts to use his time in New South Wales to achieve this federal purpose, and perhaps even leverage success in this regard towards imperial ends, was no different.

Hutton's immediate reform agenda for the New South Wales forces and his mounting friction with Dibbs did not allow him to press the federal issue in the initial period of his command, although developing an effective military system in the colony that could serve as a federal model was an important early step.