CHAPTER II.

THE NAVY ESTIMATES AND THE SHIPBUILDING PROGRAMME.

The foregoing general explanation of the methods of Admiralty business - of Board meetings, the personal intercommunication between the several Lords, the transmission of papers, and the record of affairs transacted, with other like matters, will, I hope, be useful and interesting. There is, however, much else of importance which I have set before myself to explain. I propose now to show, as far as is possible, within the space at my disposal, how the Admiralty Board conducts that great business which is committed to its charge. I cannot do better than say here what I said in the first chapter of this volume, that our naval administration exists for the constitution, maintenance, and disposition of the fleet in its material and personal elements, that it is the organizing force which, under the Cabinet, shapes and directs our maritime policy for safeguarding the interests of the Empire. I may here allude incidentally to a fact of which I think few are aware. It is that, of all the great departments of State with which the Admiralty is brought into communication, it usually - save in the event of combined naval and military operations - has least concern with the War Office. Outside the sphere of purely naval occupations I estimate the proportion of work done by the Navy for other Departments as follows: the Foreign Office, one half, and the Colonial Office, one quarter; the remaining quarter being divided in the proportion of one-tenth each to the India Office and the Board of Trade, one-twentieth only of the whole falling to the War Office.

I have dealt so extensively with the question of responsibility that I shall advert to it only incidentally here. The First Lord is, and must be, responsible for the Admiralty business and the conduct of our naval affairs, as a Cabinet Minister at the head of the naval administration. It was stated in the report of the Hartington Commission that the constitution of the Department possesses more the character of a Council with its supreme and responsible head than of an Administrative Board. "The Minister is the sole person who should be held responsible by Parliament and the public, and the responsibility of the members of his Council, both for administration and advice, should be directed to him. On the First Lord alone should rest the responsibility of deciding on the provision to be made for the naval requirements of the Empire, and the existence of a Council should be held in no degree to diminish that responsibility."

The consideration of these naval requirements is, in fact, the corner-stone of the whole matter. Upon it the Navy Estimates are based; without it those Estimates would be meaningless. But this consideration involves another. Our fleet is not a new creation inspired by the needs of a single year. It has expanded under expanding conditions. Hence the Navy Estimates must be largely based upon those of previous years. They are, in fact, those Estimates modified by the new conditions which have arisen.

But there is another modifying circumstance, in a certain sense of larger significance. It is not necessary to disguise the fact that the first step that is taken in preparing the Navy Estimates is to place them upon a financial basis. This, said the Commission of 1888, is the first step which governs the whole proceeding, namely, the amount of money to be spent. Under a constitutional system of government such as our own, this condition cannot but exist. The ultimate responsibility rests with the Cabinet. The policy of the Government, its relations with other countries, the character of its interests, and any new duties or responsibilities it may assume, together with the ability of the taxpayers to furnish sufficiently large supplies, are all matters that enter largely into preliminary discussion upon the Navy Estimates. It is for the Government, having heard the counsel of its naval advisers, to bear the responsibility for the sufficiency of national defence. "The estimates and the strength of the Navy," said Rear-Admiral Hotham before the Select Committee, "are matters for the Cabinet to determine." "Expense," said Sir Anthony Hoskins, "governs everything." This last was, of course, an axiom of practical expediency.

Now, apart from the expansion of empire, which should necessarily impress upon the Cabinet the need of larger defensive means, the chief condition modifying the Navy Estimates is the naval progress of foreign countries. It has been tacitly accepted as a basis - I need not here stop to inquire whether a fully sufficient one - for the increase of our fleet, that it shall be equal in strength to that of the two Powers next strongest. As Sir Anthony Hoskins said, before the Select Committee on the Navy Estimates, 1888, so many considerations enter into the calculation of our naval sufficiency with reference to the nations with which we may be at war, the means they may develop, and the form our warfare may take, that it is not possible to lay down any very definite rule. But whether this ratio, or any other, be accepted, it must always rule our shipbuilding programme, and with it nearly every vote in the Estimates. It is here that the Naval Intelligence Department comes into play, the accurate information it has amassed being at the disposal of the First Lord and the Board as a needful factor in the estimation of our naval requirements.

It is certainly within the province of the First Sea Lord to initiate suggestions to the First Lord as to the shipbuilding programme of the coming year. Sir Arthur Hood (Lord Hood of Avalon) has stated that when he was First Sea Lord, he considered it his duty to consult with the Controller on the subject of the shipbuilding programme, and that it was their work in conjunction to put forward proposals which would meet the requirements of the coming twelvemonths. That scheme, he said, would go before the Board, and would be thoroughly considered, and the Board would either approve or disapprove, as it judged best. But Admiral Hood did not disguise the fact that financial considerations must weigh largely. "We know from years past what sums can be allowed, and it is no use our recommending to build a large number of vessels which we know cannot be allotted by the Government and by Parliament, and we take the whole question into consideration on this basis." If any of the naval members of the Board should be discontented with the extent of the shipbuilding programme which they are allowed to put in hand, there remains to them the remedy of protest or resignation. The resignation of the naval members of the Admiralty Board would be a serious blow to any government, and the possibility of such an occurrence has sometimes operated favourably for the naval interests of the country. But, in practice, an individual member of the Board may not always feel justified in resignation. He may think it better for the interests of the country to carry on his work unbroken, than to emphasize his protest by a resignation which would not in any degree advance his views. In a general way, therefore, I may say, in the language of Admiral Hood, that the First Sea Lord and his colleagues endeavour to meet the requirements of the Service in the best way with the money which they know will be allowed by the Government. The Board, in short, works for the interests of the country, and it must necessarily work with the tools which are placed in its hands; but it is, of course, known, from the spasmodic manner in which our shipbuilding progress has been made, that the financial policy of the government has not always permitted steady advance in naval affairs. At the same time, it was in evidence before the Select Committee of 1888, that no complete scheme, showing what were the naval requirements of the country, had been laid before the Board, apart from the financial limits laid down by the Cabinet, at any time within the knowledge of those most conversant with Admiralty affairs.

Here, of course, in regard to responsibility, a very large question might be opened up. The Board may be guided by what it believes to be the naval needs of the Empire, or it may be guided by considerations that are purely financial. There is an antithesis between the two conditions, and it must rest within the discretion of the several members of the Board how far they will be guided by two things that are in their essentials totally different. Nor is it easy to see what responsibility could rest upon the Board if disaster occurred through the want of ships which had been denied to the Admiralty by the financial policy of the Government. But I must say again that the final responsibility rests largely with the First Lord. Like the members of the Board, he too, as a member of the Cabinet, has the remedy of resignation if overruled by his colleagues in what he believes the vital interest of the country; but, like them again, he may consider it wiser to do the best that is permitted to him, than to endanger the Cabinet of which he is a member. Lord George Hamilton, First Lord in 1883, told the Select Committee on the Navy Estimates that, if it were represented to him by his colleagues that a certain expenditure was indispensable for the efficiency of the Service, he would recognize that all financial considerations should be put on one side. "This," said the Commissioners, "is, in fact, the common-sense view of the matter, and it is difficult to see on what other footing the control of the Navy expenditure, consistently with responsibility to Parliament, could be placed. But your Committee are of opinion that the responsibility of the Board of Admiralty and the Government respectively would he more clearly defined and accentuated if the wants of the country were carefully considered, and a programme drawn up and submitted by the First Lord on behalf of the Board to the Cabinet, before any decision is taken as to the amount of money to be spent during the year."

I cannot do better than cite, as a general illustration of the methods of procedure in regard to the Navy Estimates, the account given by Lord George Hamilton of the course taken in regard to the Estimates and shipbuilding programme of 1888. I do so because it is an excellent illustration of the manner in which the Navy Estimates are prepared, and because it was given by a First Lord who took a very large part in the constitution of the fleet which we now possess. He said that in June, 1887, the Director of Dockyards made a report to the Controller, showing the amount of labour which would be required during the forthcoming year to complete the work in hand, relating to ships ordered to be built, or under repair. The expenditure of the previous year was the basis of his consideration, and the calculation of the amount of labour which would be absorbed by existing work, enabled the Director of Dockyards to estimate the margin that would be available for new shipbuilding operations. Another report to the Controller was furnished by the Director of Naval Construction, dealing both with the expenditure in the dockyards and upon contract-built ships; and that report was also made upon a financial basis. We read that the Director of Naval Construction presented on this occasion a list of the ships he proposed to lay down, with a further list of the constructions he projected for the next four years. The First Lord, having weighed these reports, discussed them with the Controller and the First Sea Lord, and asked them to draw out a programme which, in their judgment, was best adapted to the wants of the Navy, for he was not certain that either would acquiesce in the recommendations of the Director of Naval Construction. Sir Arthur Hood has said that the discussion between the First Sea Lord and the Controller is the most important step in the whole matter.

These officers considered the question put to them, and proposed an alternative programme, which was laid before the Board, accompanied by illustrative documents. All the papers relating to the proposals of the Director of Naval Construction were circulated among the individual members of the Board, and the alternative proposals put forward also went before the Board, so that every member had the best opportunity of being acquainted with the whole question in all its aspects, even before the Board met to discuss it, and several meetings took place before a final decision was arrived at. "It is absolutely necessary," said the First Lord, "to fix the shipbuilding programme on a financial basis, if proper arrangements are to be made for the employment and distribution of the labour in the dockyards, and the purchase of stores in time. By no other process could the officers who have to purchase these stores receive information in time, so as to enable them to get the full value of competition in the open market." At the same time, Lord George Hamilton told the Committee that the decision of the Government as to the amount of money to be provided in the Estimates had been taken before the shipbuilding programme was prepared, though he did not regard that decision as irrevocable. The meaning of placing the Estimates upon a financial basis is that the officers are directed to prepare them on the expenditure of the preceding year. The Select Committee, which heard this and much other evidence on the question, was content with the procedure in this matter. It expressed the opinion that the decision upon this most important question, according to the financial basis originally laid down, had been arrived at with the fullest knowledge, with great care and deliberation, and in such a way as to bring to bear upon it the experience and capacity of all the members of the Board who were concerned. The formulation of shipbuilding programmes, in relation alike to the replacing of ships that become obsolete, and to the provision of continuous work in the dockyards, does not, of course, depend upon the necessities merely of the forthcoming year. It looks further into the future, and takes account of years yet to come. The Naval Defence Act of 1889 did much to conduce to a continuous naval policy, and the programme afterwards adopted by Lord Spencer, though its full details were not announced, had reference to an extended period.

I have now made clear the methods of Admiralty administration in regard to the formulation of the Navy Estimates and the shipbuilding programme. We may see how the Naval Lords, co-operating with the Civil Departments under their superintendence - the Director of Naval Construction, the Engineer-in-Chief, the Director of Naval Ordnance, the Directors of Dockyards, Victualling, and Stores, and, I may add, the Director of Naval Intelligence - deal with the larger aspects of the colossal business in their charge.

Another very important and related matter which comes before the Board is the selection of types and classes of vessels. Generally speaking, the idea of the ship to be constructed will be thrown out by the naval members of the Board, and the Controller will direct the Chief Constructor to prepare the designs. When these have been prepared, the Controller and the First Sea Lord will express their views upon them, as to whether they fulfil the requirements of protection, armament, coal-endurance, and general fighting efficiency. The design, so far, is in the nature of a sketch, and as such, with the remarks of the two Lords indicated, it goes before the Board, accompanied by a full consideration and explanation of the details. The Board will then generally criticise the design upon various points, and, if it should be approved in its general character, it will be dealt with by the Director of Naval Construction, and will again go before the naval members of the Board, all the facts being circulated among the members, and not until the whole Board approve of the design can that ship be built or ordered. And again, when the ship has been put in hand, no changes can be introduced into her, either by the designer or the constructors, without the express sanction of the Board. I have so thoroughly dealt in the last part of this book with the duties of the Director of Naval Construction, and of his associated officers of the Controller's Department, in relation to the work of shipbuilding and ship-designing, that I need not here enter into it further. Suffice it to say that the system is of a closely-jointed character, and that the chain of responsibility is maintained in regard to the character of all new ships.

Just as the Admiralty Board considers the shipbuilding programme and the types of vessels - and I may add, other vital matters in its charge, such as shore works, docks, fortifications, and the preparation of offensive and defensive plans of warfare in view of possible operations - so does it consider the wants of the Service in regard to the personnel. For ships building officers and men must be provided, and ships in commission must have companies, so that Vote A of the Navy Estimates, which is concerned with "Numbers," is very closely related to the shipbuilding programme, and to the distribution of the fleet decided upon by the First Sea Lord. As I have explained, the work of manning is committed to the Second Sea Lord.

It is easy to see that Vote A wilt largely rule the preparation of other votes. Vote 1, for wages of officers, seamen, and boys, Coastguard and Royal Marines, is, in fact, based upon it. The Victualling and Clothing vote, too, depends very largely upon it. In preparing his estimate, the Director of Victualling takes into consideration the maintenance of the reserve stocks at the various victualling yards, calculated upon the vote for men, which is necessarily at the foundation of his estimate. He has to take into account the reserve stores, and the quantities that will be consumed. This matter I dealt with at some length in the chapter upon his Department. The sections of Vote 8, too, for shipbuilding, repairs, maintenance, etc., depend almost wholly upon the shipbuilding programme, and the refitting and reconstructive work going forward. The Director of Stores, for example, prepares his estimate on the information received from each yard as to the quantities in stock, the average expenditure in issues of past years, and the probable expenditure in the ensuing year, not only of principal articles, but of every individual article of all the numerous varieties in use. The professional officers of the Dockyards estimate the quantities necessary to meet requirements - having before them a preliminary outline of the work to be done during the ensuing year in repairs and in advancing or completing ships - and the number of men to be employed, having regard also to the average consumption in the previous year. I will not go any further into the details of this matter. The executive heads of the Civil Departments, having before them the general lines of the policy adopted by the Board, frame the several estimates of the votes which are committed to them, after a minute and careful consideration of all the conditions likely to affect the needs of the year. In the appendix will be found a statement of the votes, and of the officers by whom they are prepared, which will make the matter sufficiently clear.

The Estimates having been prepared in the manner I have suggested, and in relation to the instructions of the Board, are discussed at Board meetings before being finally approved. Every member of the Board is furnished with the Estimates in due time, so that he may consider and confer in relation to them before the Board meets for discussion. The heads of Departments are then called upon to explain the votes with which they are concerned. The Accountant-General, who holds a considerable office in regard to the final shaping of the Estimates, as regards the financial basis of them, is instructed to be present at the Board meeting at which the votes receive final approval. It is provided that this arrangement shall not in any way interfere with the heads of Departments bringing before the Board any question that may arise in the preparation of the votes which the Departments control; but the Board requires the concurrence of the Accountant-General to each vote before it is approved. Necessarily, as a financial officer, the Accountant-General is concerned with the financial character of the Estimates, which, as we have seen, has an important relation. It does not, however, call for weighty deliberation on his part, his function being to give final shape to the votes which have been prepared. While I am referring to the Accountant-General, I will touch incidentally upon a special matter concerning the money voted. It is provided that, before any such money can be applied to any purpose other than that for which it was voted, that officer's consent is necessary. This does not seem to me a sufficient guarantee. It has happened before now, for example, that money voted for ammunition has been otherwise spent, and that ships considered desirable to be commissioned have been found destitute of special kinds of ammunition. Here a danger suggests itself, but if the re-allocations of money voted were a Board matter there would be a stronger guarantee against its recurrence.

I have now explained, in a general manner, how the work of the Board is conducted, year by year, in view of the provision of money. The first step in the work of the Board is to procure from Parliament the "sinews of war," and, having obtained the necessary supplies, to see that they are expended well. It remains for me, therefore, in the next chapter, to show, in a general manner, how the money provided is laid out.