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portion of it, and were themselves drawing the interest and therefore ought to pay it back to the Government. Was that in the mind of the Accounting Officer?-I think we were anxious to make the best settlement we could with the firm.

6706. That is not answering my question. I do not wish to trap you in any way, but I want to find out what was at the back of the mind of these people. They may have been justified, and if they thought they really had a right to interest, that would vary the contract a little; that would not have been the original contract; it would have been a contract with interest?-So far as I can recollect the circumstances at the present time, they were these. When the ques

tion of interest was raised there was a difference of opinion in the Admiralty itself. Some of us thought that the firm having had the advance free of interest, it was useless to ask them for interest, but others thought that in placing the subsequent orders with the firm we might be able to get it, and so we made a claim. (Mr. Fass.) I am told that the responsibility was really the Treasury's. The Treasury thought here was a firm that had money for a longish period, and something ought to be got back for interest.

6707. I want to find out exactly what the position is. All I am going to say, and, I think, say justifiably from the point of view of contracts, is that from that point of view the contract ought to be a little firmer. I have no objection to this form of contract at all; I think it is clearly understood; but it does seem, I will not say irregular, but a little peculiar that having made that contract you should then wake up and say suddenly, "I think I ought to have some money out of this." If the firm had done any work during those six months, Sir Oswyn, one could understand that that might be a set-off, and therefore you did not ask for interest because you

thought sufficient work had been done as a set-off. Is that so?-(Sir Oswyn Murray.) No, I think that is

not so.

6708. Then no work was done at all? -I am not prepared to say that no work was done, but no work that could not be carried on to the subsequent orders that were given to the firm.

[Continued.

6709. Then that is the old story of mixing up the subsequent orders with the original contracts which were settled by cancellation?-Yes. Also, as in the case referred to in paragraph 6 of the Comptroller and Auditor Geneal's Report, in the case of these gun mountings we had not got a fomal contract at all.

6710. I think I appreciate your point. All I say it, that I think it is a little loose to have £18,500 in interest wandering about at chance.

Major Salmon.

6711. I should like to ask you this, Sir Oswyn. In the course of either making machinery, or adapting machinery, I suppose certain Officers in the Admiralty desire to patent certain ideas and designs. Is that so?-We follow the same rules as those laid down by the Treasury for all the public Services as regards patenting. If it may

be considered that it is part of the Officer's duty to invent, we do not allow him to patent as a rule. We may give him some sort of reward for a good invention, but we would take out the patent ourselves.

6712. He would not be allowed to give, say, a licence for commercial purposes of a particular patent?-He would have to give us the patent and we should decide on the merits of the case whether we would allow him to have any interest in the commercial benefit of the invention or not.

6713. Have you cases in actual operation where Officers in your department have conceived a brilliant gadget?-Oh, yes, many; and many in which we have allowed them to have the commercial benefit of the patent.

6714. That would, of course, be in their name? I think it would usually be a joint patent in the name of the Admiralty and the inventor.

6715. The royalty received from the commercial use of the patent would go to the Officer?-Yes, if we agreed that was fair.

6716. But in your case you would not have any conflicting arrangement; that is to say, a commercial use would not have to come to you to receive the benefit and use of the patent?-No, they would not have to come to us.

28 June, 1927.]

Sir OswYN MURRAY, K.C.B.

[Continued.

I see

ON VOTE 9.

NAVAL ARMAMENTS.

AND ON VOTE 10.

WORKS, BUILDINGS AND REPAIRS AT HOME AND ABROAD.

Sir Robert Hamilton.

6717. With regard to Vote 10, page 39, under Subhead B. is included £134,000 on account of buildings at Singapore in the course of the year. How much has been spent up to date on Singapore? I suppose it does not appear under any one particular head; it will be under different headings?—It would appear almost entirely under Vote 10 at present. You want to know how much has been the expenditure in subsequent years?

6718. No, in previous years up to this? -There was very little expenditure in this year, because, as you may remember, in the previous year the Government decided to suspend work at Singapore, so that this is practically the first expenditure. There had been very little before that, only a little work in clearing the ground. (Sir Malcolm Ramsay.) Page 91 gives the information.

6719. What is the estimate that the Admiralty has in view at the present time for work at Singapore?-(Sir Oswyr Murray.) It is £7,500,000. It is reduced estimate. £11,500,000 was the original estimate, and it has been brought down to £7,500,000.

a

6720. How many years is that expected to be spread over?-Over a number of years. The position was explained when Vote 10 was before the House.

Mr. Gillett.

SO

much

6721. With reference to Subhead F. on page 36, do I understand that it is merely a question of book-keeping why been the expenditure has larger? I do not really quite understand the explanation given in the note?—You mean in relation to the over-all reduction? That refers to the decision of the Government that the amount provided in the Estimates should be less than the Admiralty thought the progress of work would justify, and in this case again the Admiralty's original Estimate of the progress was more correct.

6722. Does that also apply to Subhead K on the next page? No. That is quite different, because that is not for contract work; it is for inspection and experiments, and so on. It is due to a larger payment to the War Office, as you see, for work done on our behalf.

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ON VOTE 11.

VARIOUS MISCELLANEOUS EFFECTIVE SERVICES.

ON VOTE 12.

ADMIRALTY OFFICE.

ON VOTE 13.

NON-EFFECTIVE SERVICES (NAVAL AND MARINE)-OFFICERS.

ON VOTE 14.

NON-EFFECTIVE SERVICES (NAVAL AND MARINE)—MEN.

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Yes. That was a gratuity to the inventor of a system of director firing. It was an award by the Royal Commission.

In

6725. Was it an Officer in the Service who was the inventor?-No, it was an outside inventor. He had been engaged on it over a large number of years. fact he was the first person, I think we may say, to whom this idea of director firing had occurred. The system that we use in the Navy is not actually his system, but the Royal Commission were of opinion that his pioneer work had greatly assisted us in arriving at our system, and they awarded him this rather large sum.

6726. With regard to Vote 12, could you give me the total numbers of the administration staff at the Admiralty Office in this year under consideration, 1925-26, as against 1913-1914?—The numbers in 1925, which is the year we are dealing with, were as follows: Naval officers, 264; civilian administrative, technical and clerical staff, 2,629; messengers, cleaners, packers, etc., 435; total, 3,328. In July, 1914, the corresponding numbers were: Naval officers, 152; civilian administrative, technical and clerical staff, 1,566; messengers, cleaners, packers, etc., 354; total, 2,072. 6727. An increase of well over 33 per cent?-An increase of about 1,200.

6728. That represents an increase of well over 33 per cent. ?-Yes.

6729. Making a back reference to page 10, which shows the establishment, and shows a reduction on the year, we have not, of course, before us the numbers for 1913-14 to show against the 100,000 for the year 1925-26?-The number for 1914 was 146,000, roughly.

6730. When we considered the figures given on page 10 you suggested that the reduction had been made on the point of economy. Now here is a reduction of 33 per cent. in the personnel, and yet there is an increase of 33 per cent. in the administration staff. Where is the need for that?-I do not know if the Honourable Member remembers the reply which the First Lord of the Admiralty gave to that very question in the House of Commons on the 18th November, 1925. He gave an answer which was very full, and which runs into six columns of the Official Report, explaining the fallacy of the idea that the Admiralty headquarters' numbers depend mainly on the numbers of men in the Fleet, and also explaining exactly where the causes of increase have

[Continued

arisen. There are, as a matter of fact, very few parts of the Admiralty work which depend solely or even mainly on the number of men in the Fleet. You have only to take Vote 12, showing the list of the Admiralty offices, and you can see at once the fallacy of thinking that there is a close connection between the two. Take the Naval staff who deal with the uses of the Fleet in war and with the forming of war plans. They are not dependent at all on whether the Fleet has 150,000 men in time of peace or 100,000 men. They are preparing plans for a war in which you might use for the Navy every person that the Army could spare. Then, again, take the Director of Naval Construction and his staff who build ships; their work is not dependent on the number of men in the Navy; it is dependent on the size, and complication and number of ships that it is decided shall be built or brought into use. Then take the Engineer-inChief's department; that is exactly the same. The Director of Electrical Engineering's department again has nothing to do with the number of men in the Navy. It is the same with the Director of Naval Ordnance Department. The Director of Torpedoes and Mining and his department again are entirely dependent on the advance in matériel. The Director of Naval Equipment, the Director of Dockyards, the Signal Department, the Expense Account Department, the Naval Store Department, the Civil Engineer-in-Chief's Department, the Director of Contracts, the Hydrographer, the Director of Scientific Research-not one of those departments and their staff depends to any material extent on the number of men in the Navy.

6731. Of course your reply raises the whole question of policy. But I am be ginning to look for the war clouds tomorrow on your reply. Apparantly you are upholding the maintenance of an organising staff for war purposes, and the personnel can be acquired at a moment's notice when necessary. It is a question of policy which one cannot go into, I presume?-I was only venturing to suggest that the size of the Admiralty does not depend on the number of men in the fleet. This point has been raised so many times that I have tried to find some department of the Admiralty where the work is principally governed by the number of men, and really I do not know of any except the

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department of the Director of Naval Recruiting. That is the only department that I know in the Admiralty where the work depends solely or chiefly on the number of men in the Navy. In that one department if you compare 1914 with 1925 there happens to have been practically a one-third reduction.

to

6732. Would you agree that the organisation that you have just stated is sufficient to deal with a personnel of 200,000? I do not think that if the number of men in the Navy was increased again to 150,000, or even 200,000, there would be anything like a corresponding increase in the Admiralty staff. If there were an enormous development of material as well, as there was during the war, you would have a very largely increased Admiralty staff.

6733. Might I ask you to give me the reference to that reply of the First Lord of the Admiralty, telling me the date and where it can be found?-It was a reply given on the 18th November, 1925, to a question of Mr. Bennett, M.P., and it is to be found in the Official Report.

Sir Fredric Wise.

6734. On page 46, Subhead O, is "Loss by Exchange." I see from the note that it represents Bank charges. Can vou tell me about that?-(Sir Malcolm Ramsay.) It is really discount on Bills in that particular year. That heading is divided in detail in the Estimate, which provided for loss by exchange, Bank charges, etc., and this particular item of £435 happens this year to be discount on Bills. It is not a loss by exchange.

6735. Do the Admiralty discount Bills? -No, this is the drawing of Bills. Probably it is a case of drawing a Bill abroad. It is mainly interest.

6736. On page 48, Item 4, is "Receipts from Salvage Services." Has that anything to do with the contract you have with the firm for raising the German fleet? (Sir Oswyn Murray) No, I do not think so.

6737. Following on what Mr. Briggs has asked you, could you tell us how many ships there are in the Navy now compared to 1914. Would not that have some bearing upon the administration staff? That would have a great deal more effect than the number of men in the Navy. The number of ships in the Navy at the present time, of all sorts,

[Continued.

including steam and motor boats, is 1,864 as against 2,101 in 1914. Of course we have fewer capital ships. We have much bigger capital ships, but fewer. On the other hand, we have larger numbers of auxiliary vessels.

6738. How many capital ships had you in 1914?-68 capital ships, 38 in full commission, and 30 in reserve. We have now got 16 capital ships in full commission and 2 in reserve.

6739. 16 capital ships now as against 68 in 1914?-Yes, that is so.

6740. Surely that would reduce your staff, would it not?-But as I say, when you get down to auxiliary vessels we have larger numbers now. And the equipment of the ships is very much more complicated and elaborate now. For instance, the electrical equipment of one of our new cruisers is very much larger than the electrical equipment of the "Queen Elizabeth" which was the latest battleship built before the war.

6741. Does it not take less men ?There are less men in the cruiser certainly, but the equipment and the design work and the repair work-with which work the Admiralty headquarters' staff is concerned-are very much larger.

6742. May I take you to the White Paper showing the appointments in the Public Services of £2,000 a year and upwards? I find that in the Fleet appointments there were, in 1913-14, seven Officers with £2,000 a year and upwards, while in 1925-26 there are 23. I also note that with regard to the Admiralty Naval Establishment and Naval Attachés there were four in 1913-14, and in 1925-26 there were 28. That is rather a big increase, is it not? -That comes as a result of the raising of Naval pay in 1919, which, you will remember, was greeted by the House of Commons and everyone else as a tardy act of justice to the Naval Officers. As a result of that the pay of Flag Officers was increased so that in many cases it exceeds £2,000 when serving at the Admiralty or elsewhere instead of being less than £2,000 a year. Therefore you get a great many officers brought into this table who were under the limit in 1914.

6743. You must agree that it is rather a big increase?-The increase is a large one, but everyone realises that you were giving the Naval officer a much higher rate of pay in 1919 than he had had before, and in 1919 everyone was very proud of having done it.

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6744. I am not saying whether it is right or wrong, but I am only saying that the increase appears to me to be very large. It is not a case of double or treble; it is really 11 against 51?— I can only say that it follows naturally from the increase given to the Fleet. Of course, not a large number of these officers are at the Admiralty itself.

Major Salmon.

answer

6745. With reference to the that you gave Mr. Briggs as regards the number of personnel employed at the Admiralty, one realises at once that the method of mechanical fitting up of a ship to-day is very much more intricate than in 1914, but on the other hand you are building less ships per annum, and you are maintaining less ships. In consequence of the fact that you are building less ships per annum and maintaining less ships per annum it strikes one that there ought to be the possibility of having a reduction in the number of the staff employed in the departments.

and

I quite agree that you must run the departments properly, but you have no need to run them with such a full staff?-Although we are building fewer ships in the year and maintaining fewer ships, the designs of the ships are, so to speak, much more original now. If you take our two capital ships now building, the "Nelson" "Rodney," they are far more different from any ship built in 1914 than a ship built in 1914 was from any ship that had been built, say, since 1906. From 1906 to 1914 you had the "Dreadnoughts" practically similar in type, only just increasing a little in size; but since the war all our ships have been entire departures from previous types based on war experience. Some of them, for instance the aircraft carriers, are of course absolutely new. That has meant a very much greater volume of work in our technical departments than before the war.

6746. If I follow you correctly, did the same experience apply between 1906 and 1914-that your staff varied to the same extent? No. I say between 1906 and 1914 our types were not changing much. Ships were getting gradually bigger, but they were all on the same lines on the "Dreadnought" linesbut now in the case of cruisers, in the

[Continued.

case of destroyers, in the case of capital ships, and in the case of aircraft carriers, we have struck out new lines absolutely based on war experience.

6747. One quite appreciates that point, and in certain sections of the department unquestionably there is more work entailed because of these new drawings and new designs. Everything is new, and to a large extent experimental, but there must be other sections of the department where the work is less, and we have not seen it reflected in the aggregate numbers ?-I should like to discover the sections. Our experience is that the work is always getting more complicated. Legislation is passed which throws new duties on the departments, and the conditions in trade and business are more difficult, so that all contractual work is much more complicated and difficult than it was. Labour questions are more troublesome to deal with than they were before the War. And we do not notice and by figures we do not findany diminution of work in these directions. The number of papers that we register in the Admiralty, which show in a general way the interest that the public are taking in the Navy, and the number of communications that we have to consider, is larger now than in 1914. The number of Parliamentary questions we get with regard to the Navy is also larger than it was in 1914.

6748. Does it not all go to prove this: that it may be necessary to overhaul the actual system in which you are trying to carry out a principle that was very good when you had a sort of routine work, and when you were building ships of a similar character. Probably you are doing that, probably you are overhauling your present system to see whether you cannot simplify it. Perhaps with all these new ships your system is so intricate or difficult that it entails a very large staff?-We are constantly trying to simplify our system, and with a good deal of success. We are doing a good deal in replacing clerical staff by machines. A good deal is being done in that direction where it can be done. But there is no doubt that the work gets more complicated and does not get less. I might say that even this Committee rarely sits in any year without putting some new obligations on us in the way of what we are to do or not to do in financial matters, all of

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