FIRST REPORT.

THE SELECT COMMITTEE ON ESTIMATES have made progress in the matters to them referred, and have agreed to the following FIRST REPORT.

(1) Your Committee have made a detailed investigation into the Navy Estimates, and have examined Sir Oswyn Murray, K.C.B., Permanent Secretary to the Admiralty, Sir Charles Walker, K.C.B., Deputy Secretary, and other Admiralty representatives.

(2) In 1919 the pay of Officers and men was largely increased with the result that whereas in the last pre-war year, 1913/14, the establishment of the Navy consisted of 151,000 men and the cost for pay was £8,800,000, in the year 1923/24 the establishment is only 99,500 and the cost for pay £14,000,000.

(3) The combined increase in the pay of Officers and men amounts to 120 per cent. over pre-war rates, but the pay of the able seamen taken separately amounts to 150 per cent. over prewar rates. It must be remembered that while the able seamen have an increase of 150 per cent. over pre-war pay they still are found, in addition, their clothing and food, and a post-war marriage allowance for married men which costs the State just over £1,000,000 per annum. These increases were made on the Reports of two Naval Committees, reviewed by a Committee appointed by the Government under the chairmanship of the then Minister for Education and approved by the Government.

(4) A question was raised as to whether the pay had been increased before 1919 since the days of Nelson. A statement was put in showing the pay in 1914 and the pay in 1806. Owing to the different conditions of the Navy then and now it is difficult to draw an exact parallel. In 1918 able seamen received 1s. 8d. to ls. 11d. a day and leading seamen 2s. to 2s. 4d. ; in 1806 able seamen received 1s. 1d. per day and captains of tops 1s. 2d. to 1s. 4d. In 1806 the men paid for their own clothing, whereas in 1914 clothing was provided.

(5) It will thus be seen that though at the present moment the increase in the cost of living is about 70 per cent. the pay of the seaman has been increased by 150 per cent. in addition to which he receives a marriage allowance. All grades are pensionable after 22 years' service; as an example a petty officer would receive about 30s. a week. In the case of the officers the pay has been increased by 60 to 70 per cent. and they also receive a pension.

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(6) It was stated that with the exception of marines and stokers there was no difficulty before the war in getting officers and men for the Navy at the rates of pay then ruling, that all seamen are entered as boys, and artificers very largely as boys, and that the attraction to boys entering the Service is certainly the attraction of sea life. The state of outside employment therefore does not come in. It was further stated that the state of outside employment did affect recruiting for the marines and stokers, who entered as men, but that the pay does not have the great effect on recruiting that some people imagine.

The pay of officers is due for review on 1st July next year, but there is no guarantee that the pay of the men will be then reviewed, the Admiralty having been completely silent on the question of revision.

(7) It will thus be seen that in 1919 there was a large increase in the pay of all ranks in the Navy and that with the exception of reserving to themselves the power to review the pay of officers on the 1st July next year, no precautions were taken by the Admiralty to revise the pay of the men except with regard to the marriage allowance should wages generally fall. The revision of the pay of officers, moreover, is limited as a reduction can only be considered on 20 per cent. of their pay, that is to say that only 20 per cent. of their pay is liable to diminution. Papers were put in giving details of the rates of pay from 1806 to the present day and also tables of comparison between the present rates of pay in the Navy and the Mercantile Marine, and also a comparison with the pay of skilled and unskilled labourers and persons in civilian employment.

It may be well to point out that it was the opinion of the Admiralty representative, that the Navy like every other section of the community would loyally accept a reduction in their rates of pay provided that a similar reduction was made in all other Government and Municipal services.

(8) The Committee desire to draw attention to the fact that though the numbers of the Royal Marines have been decreased from about 16,000 in 1914 to just under 10,000 in the present year the cost of the headquarters' staff has risen from £4,369 in 1914 to £6,757 in 1923/24.

(9) With regard to the Victualling Vote (Vote 2) although the number of men in the Navy has decreased from 151,000 to 99,500, the number of the men employed in the Victualling Department has increased from 133 in 1914 to 160 in 1923/24 and the cost from £28,186 in 1914 to £55,418 in 1923/24. As an instance in 1914, there was one boatswain of the yard at £214 a year, whereas he now gets £417, and in addition to that he gets an assistant although there are fewer men to victual and clothe.

The administrative expenses of the Victualling Department have increased from £28,000 in 1914 to £55,000 in this year, and the number of victualling yard clerks has increased from 17 in

1914 to 41 in 1923/24. Your Committee was informed that this was attributable to the regrading schemes, but comparing the total number in the various grades we find that in 1914, 61 were employed as compared with 89 in 1923/24. The explanation given was that though there had been a considerable reduction in the numbers of the men in the Navy the work of the Victualling Department had considerably increased.

(10) Medical Establishment and Services. Here again there seems to have been a general increase in the cost, notwithstanding that there has been a large reduction in the number of men in the Navy. For instance there are now four surgeon rearadmirals at a cost of £8,431, whereas in 1914 there were three at a cost of £4,499. Wardmasters have increased from six in 1914 at a cost of £1,019, to twelve at a cost of £4,851, though again it must be evident that the number of patients owing to the reduction of the number of men in the Navy is less than it was in 1914. The explanation given was that owing to the demand for opportunities for promotion from the lower deck the only place in which these officers can be employed is in hospitals, and that if the prospects of promotion are increased, these people must be employed in hospitals in lieu of someone who held a much lower rank before the war.

It was stated that there was a difficulty in obtaining young medical officers at the present time, that the Navy had never been very popular with the medical profession and that at the present moment there was almost a boycott, the result being that the Service is left with a large proportion of senior to junior medical officers, and has to employ Surgeon-Commanders in hospitals, where it would be preferable to employ SurgeonLieutenants if they were available.

It would appear that a portion of the increase in the cost of the Navy is due to employing in many positions, officers of a higher rank than the position warrants, who are paid more because of

their rank.

(11) Vote 5. Educational Services. In 1913 the cost of this Vote with 151,000 men was £175,000. Now, with 99,500 men the cost is £353,000. It was explained that this increase was partly owing to the great increase in the technical training now necessary in all ranks.

The Store officer cashier and librarian at the Royal Naval College, Greenwich, received £300 a year in 1914 and now £1,076. The explanation given to your Committee was that the store officer at the Royal Naval College, Greenwich, in 1914, was a retired officer drawing retired pay in addition to his salary of £300 a year, and that now he was an active service officer. Asked why a retired officer could not be obtained this year as in 1914, it was stated that it would not be possible to get a retired officer at £300 a year to do that work now and that the principle was laid down in 1919 that Naval officers were to be given the full pay and allowance of their rank.

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In 1914 there was an instructor at £256 while in 1923/24 there is an instructor commander at £1,150, nearly five times as much as was paid in 1914. The explanation given was that the prewar instructor was a civilian, but that now the instructor is a Naval officer and the 1919 revision of pay applies to him.

At the Royal Naval College, Greenwich, there are 227 students who have a staff of 356 to look after them, made up as follows, administrative staff 39, instructional staff 58, and wages staff 259.

(12) Vote 7. Naval Reserves. The expenditure before the war was estimated at £489,900 and the figure in this year's Estimates is £572,800. Before the war the Royal Naval Reserve consisted of 1,932 officers and 17,296 men, plus 1,000 in the Newfoundland and Malta Naval Reserves, the cost being £215,000. The numbers now are 1,396 officers and 7,938 men, and the cost is £179,000, so that while before the war the cost of 20,228 officers and men was £215,000, 9,334 officers and men now cost £179,000. (13) Vote 8. (Shipbuilding, Repairs, Etc.). The increase on this Vote as compared with 1914 is from £5,646,000 to £6,694,000. This is chiefly owing to the increase in the rates of pay. The Admiralty representative stated that the approximate total cost of the two new battleships under construction was estimated at £14,000,000, or £7,000,000 each.

The cost of the staff in the Superintendents' Department in the Home dockyards has increased from £15,787 to £28,102. The cost of the Admiral Superintendents, of whom there are now four instead of three is £11,528 for the four as against £5,649 for the three. The additional Admiral Superintendent is owing to the dockyard at Rosyth.

In 1913/14 there were five coxswains in this Department at a cost of £506, whereas the same men in this year cost £1,214. These men are part of the retinue which is attached to senior Naval officers. A paper was put in dealing with the retinue of senior Naval officers at yards abroad from which it would appear that a captain in charge of a dockyard gets four cooks and stewards whereas if a commander is in charge of the same dockyard he only gets two cooks and stewards-the explanation being that the number of servants is regulated by the rank of the officer.

(14) Vote 11. It would appear that the "New Zealand," a vessel presented by the New Zealand Government at a cost of £1,700,000 was sold for £21,000. The "New Zealand " was not sold by auction, but was sold to a British firm and realized over £1 a ton, which was the rate quoted by many foreign firms. The Committee were informed that prices had appreciated since the sale of this vessel, but that as she was one of the vessels included in the Washington Agreement it was necessary to dispose of the vessel at once, and that owing to that agreement there was a glut of ships for sale which depreciated prices. (15) Vote 12. (Admiralty Office). This Vote stands at £1,134,723 as compared with £457,301 in 1914. Increase of numbers and pay in this as in other departments are the main

reasons for this increase. A paper dealing with these figures was handed in by the Admiralty.

The opinion was expressed by the Admiralty representative that economies might be effected in administration, if what was the Transport Department at the Admiralty in 1914 and was transferred to the Ministry of Shipping during the war, were handed back to the Admiralty by the Mercantile Marine Department of the Board of Trade.

(16) In conclusion your Committee are of opinion that steps should be taken to review the pay of officers and men in the Royal Navy in 1924, and that the administrative departments stand in need of reorganisation and reduction.

Appendix and Report by Select Committee on Estimates, 1923, on the Navy Estimates.

STATEMENT SHOWING THE DAILY RATES OF SUBSTANTIVE PAY DRAWN BY RATINGS OF THE SEAMAN BRANCH (C.S.) AT DIFFERENT PERIODS.