§ The expenditure (including both Original and Supplementary Estimates) borne by Naval Votes for the year ending 31st March, 1887, is £13,270,100.
§ The Estimate of Expenditure for the year ending 31st March, 1888, is £12,476,800, being a decrease of £793,300 compared with the expenditure of the preceding year. A reduction of expenditure generally implies a decrease of the effective strength of the Service with which it is connected. We are fortunate enough to be able to reverse this rule in the present instance. The reduced outlay during the ensuing financial year is accompanied by a material increase in the strength of the Navy, money being found for 62,600 officers and men in 1887℃88 as against 61,400 in the preceding year, whilst the number and power of ships in the 1st Reserve, and ready for commission on 1st April, 1888, will be much in excess of any similar provision for many years past.
§ A diminution in the amount of liabilities for vessels and engines constructed by contract is another noticeable feature in the present Financial Statement.
§ These liabilities stood at £2,680,000 in April, 1886, and are estimated to be £1,030,000 in April, 1887; yet at the end of the financial year 1887–88, including the cost of new ships and engines contracted for during that year, they will stand at the low figure of £431,000. An almost similar reduction of liability for ships building in the dockyards can be shown.
§ The large augmentation in the fighting strength of the Navy which will have been effected simultaneously with a reduction of annual expenditure and incurred liabilities may be accepted as a proof that naval finance, so far as outlay and return are concerned, is now in a satisfactory condition, and that it will be possible, under a system of judicious management, to associate for some time to come a reduction of expenditure with an increase of efficiency.