§ MR. COBDEN
* rose to move certain Resolutions in regard to the great extension of the Government Manufacturing Establishments. He said, I regret that, owing to the necessity which lay on many of us to postpone the notices of Motions which we had on the paper a fortnight ago, I was not able to bring this subject earlier under the notice of the House. The Question is important, not only in a financial sense, but in its bearings on the defence and security of the nation. In advocating the view that the Government of the country should not undertake to manufacture for itself that which can be purchased from private producers, I am advancing no new doctrine in this House. On the contrary, this has always been the policy of the House, and the opposite system pursued during the last few years has been in defiance of the reiterated expressions of the opinion of Parliament. I might go back to the celebrated speech of Edmund Burke on economical reform, who so long ago as 1780 laid down in language which it is impossible to surpass, the reasons why the Government should not resort to the manufacture of its own supplies, but should depend on the competition of individual manufacturers. In 1828, before the Reform era, a Committee of the House of Commons put forth a Report in which there is a paragraph to this effect—The Committee are not disposed to place implicit reliance on the arguments which have been urged by some public departments against contracts by competition, and in favour of work by themselves. The latter plan occasions the employment of a great many officers, clerks, artificers, and workmen, and not only adds to the patronage, but to the appearance of the impor- 1908 tance of a department. Nor can the Committee suffer themselves to feel any prejudice against the contract system, by references to some instances of failure. They believe that most cases of failure may be attributed to negligence or ignorance in the management of contracts, rather than to the system itself.Now here is the gist of all I have to say. I shall only amplify this passage, and in doing so I hope I shall not be accused of more illiberality towards the officials than was exhibited by the Committee of 1828. On various occasions this question has been partially raised in reference to particular articles, and an exceptional ground has always been alleged why we should give, for some special branch of production, a preference to the Government manufactories. The consequence has been that step by step the departments have taken upon themselves an immense increase of manufacture. I have asked myself how is it that while we have for twenty years, in our commercial policy, been acting on the principle of unrestricted competition, believing that that is the only way to secure excellence and stability of production, and when the private industry of the country is more equal than ever it was to the demands of the Government, how is it that the departments have been allowed to raise up these gigantic Government monopolies? I believe it is in consequence of the weakness of the Executive Government. For many years past there has, I fear, been very little control exercised by the Treasury, over the various departments of the Government, and the rein being loosened the heads of departments have taken the power into their own hands, and embarked in vast manufacturing undertakings, contrary as I cannot but believe to the intention of this House and the country. The result of my experience is, that there is little use in the House undertaking by Committees to correct the failures of the Executive Government. By interfering in the management of the details of the Government you infallibly do more harm than good. You lower the Executive in the estimation of the permanent officials; and you attempt what is impossible, for the departments laugh at the idea of Parliament superintending the details of the administration. Moreover, the Government by allowing Parliament to attempt to control these details, virtually abandons its own duties and responsibilities, During the last few years we have had Committees of this House on 1909 Ordnance, on plating ships, and on various other branches of Executive administration connected with the safety and defence of the country. In the early years of my experience in Parliament, when I Sir Robert Peel was Prime Minister, he would have resisted the appointment of such Committees as tantamount to a Vote of Want of Confidence. He would have said, "If you think the administration is not satisfactorily conducted by me, then you must find somebody else to undertake it." My view is that the House can interfere with great advantage in prescribing the principles on which the Executive Government shall be carried on; but beyond that it is impossible for the Legislature to interfere with advantage in the details of the administration of the country. The principle I advocate is that the Government should not be allowed to manufacture for itself any article which can be obtained from private producers in a competitive market; and that, if we have; entered on a false system in this respect, I we ought, a3 far as possible, to retrace our steps.
To give the House an idea of the extent to which the system of which complain has grown, I will quote a few figures. In 1849–50 I sat upon a Committee to inquire into the Ordnance, and we found that the I whole amount of wages then paid to artificers and labourers in the United Kingdom and the Colonies on the Ordnance Votes was £141,330. This year I find that we; have voted in corresponding Votes for the wages of our manufacturing establishments, including the clothing factories, a sum of £584,000, being more than four times the amount of the sum voted in 1849–50. The wages voted for the gun factory at Woolwich this year were £144,000, which exceeded the wages for all the departments in 1849–50. Down to and including the Crimean war, the British Government never east an iron cannon, or made shot or shell. Our ordnance was purchased from the Carron Works in Scotland, from the Low Moor Company, or from the Gospel Oak Works, of Messrs. Walker. At the outbreak of the Crimean war my right hon. Friend the Member for Limerick (Mr. Monsell) was Secretary to the Ordnance, and I am afraid that I must charge him with having deposited the nest-egg which has produced the pernicious brood of which I am complaining. From the evidence given by the right hon. Gentleman himself in 1854, I find that he and Captain Boxer 1910 of the Laboratory Department at Woolwich laid their heads together and said, "If we spend £7,000 in putting up machinery we can make our own fusees and bouche our own shells." That was the beginning of those acres of costly machinery which may now be seen at Woolwich. No very long time elapsed before Captain Boxer said, "We are now prepared for making fusees and Douching faster than we can get shells; therefore, let us make shells," and accordingly they laid out £10,000 in the erection of machinery for casting shells and shot. There is a very interesting narrative in the evidence before the Sebastopol Committee, and I find that the right hon. Gentleman was arraigned before that Committee for acting without the consent of his Colleagues. I do not blame him for that. We were at war, and he and Captain Boxer displayed a commendable energy; but I mention these facts to show you how establishments of this kind grow. The next step, after setting up machinery for casting shot and shell, was to erect turning and boring machinery for making the guns. It was resolved that instead of obtaining cast-iron cannon from the Low Moor Company, they should purchase from that concern solid blocks of iron, and bore and turn them at Woolwich. Another suggestion immediately followed:—"We bad better cast our own guns rather than buy these blocks from Low Moor," and so the machinery was set up for that. Now came a difficulty. There are, as I have said, but two or three concerns in England from which it is safe to buy ordnance, of which the Low Moor Works are one, and the Gospel Oak Works of Messrs. Walker another. When casting a 68-pounder at Low Moor they not only take selected qualities of their own iron, good as it is, but they use coal of a particular kind, fresh from the earth, to smelt it. That firm would not sell pig-iron to the Woolwich establishment, and the result was that, having got the machinery for casting the guns, there was no iron fit to cast. They went into the market and purchased the ordinary kind of pig iron, and they made about 100 guns, but it is believed that not one of the hundred ever went into the service. They were pronounced rotten and were never used. After £200,000 had been spent in this way, the establishment at Woolwich for casting guns was abandoned.
Then came the second part of the performance. It had become necessary that 1911 the Government should obtain a supply of rifled cannon. No sooner did this necessity arise than there were men of genius such as Mr. Whitworth, Sir William Armstrong, Captain Blakeley, Mr. Lancaster, and Mr. Lynall Thomas preparing to supply the want. The reasonable course would have been to have said to these inventors, "Go on and improve your system. Manufacture some guns, and to whichever is most successful, we will be your customer;" but the establishment at Woolwich wished to secure the manufacture of rifled ordnance, and those in authority—some of them in very high authority—seem to have lost their heads altogether, and to have gone almost crazy over Sir William Armstrong's gun. An illustrious Duke is reported to have said that Sir William Armstrong's gun could all but speak, and another eminent officer declared it was equal to anything in the tales of the Arabian Nights. I will venture to offer a suggestion. When we have in future to make a choice of ordnance, our high officials in the army should pursue the same course they do when they hold a court-martial—let the younger officers speak first—because when the Commander-in-Chief utters such an emphatic approbation it is hardly likely that junior officers will be found to dissent. I would further suggest that the authorities should in these matters follow the commercial system, and not begin to praise and puff an article before they buy it. The result in this instance was, that Sir William Armstrong—then Mr. Armstrong—resolved to make a present of his patent to the War Office. And a very costly present it was. It was assigned over to the Secretary for War, and an arrangement was entered into which to this day I can hardly understand. It seems that Sir William Armstrong was to receive, for ten years, a sum of £2,000 a year for superintending the working of the patent. That arrangement was antedated three years, and £6,000 was paid down, upon which he became superintendent of the Royal gun factory, and chief engineer of the rifled ordnance department. A business was set up at Elswick, in Northumberland, by the War Office—an establishment which previously belonged to Sir William Armstrong—and we made advances in a mysterious manner to the extent of £85,000. Immediately afterwards our officials at Woolwich set up a manufactory of the same kind, and they set it up apparently with a view of controlling the price at 1912 Elswick. It is most amusing to see the naïveté with which the leading men at Woolwich came before the Committee appointed by this House, and tried to show that they were producing the gun cheaper at Woolwich than at Elswick, forgetting that the two were one and the same concern; that they were both started by the Government with the nation's capital. The Committee were evidently unable to understand the accounts of the Woolwich factory, and in their report they passed a resolution begging them to amend them. I believe that the right hon. Member for Limerick will admit that this is a fair statement of the origin and progress of the rifled Armstrong gun. It was to be made of wrought-iron, was to be breech-loading, and built up on the coil principle with bars of forged iron. It is no disparagement to Sir William Armstrong, who is a man of great mechanical genius, to say that the general impression of scientific men has been unfavourable to his invention—unfavourable to the breech-loading principle, and unfavourable to the material of which he proposed to construct his gun. But the point to which I desire to call the especial attention of the House is this, that the Government set up a manufacture and installed as its head the author and patentee of a particular gun. The consequence was that Mr. Whitworth, who was then in the field, found that he had virtually to submit his gun to the inspection and approval of his great rival. There were other men as well who were candidates, but I mention Mr. Whitworth especially, because every one who knows him will allow that he is one of the very foremost practical mechanicians of the age, and everybody will admit that any system which excluded that gentleman from competition in a matter to which he had devoted his attention must be a wrong system. It was not merely the mechanicians who were thus excluded. The general impression was, and is, that the great problem to solve is not so much a pattern of rifling or a form of gun, as the material from which a gun is to be made; and we have for the last ten years been travelling in a direction which will no doubt ultimately land us in this position, that we shall have it in our power, whenever we find it advantageous, to apply steel to every purpose for which we now use iron. Mr. Bessemer was in the field with his invention for cheapening steel. We have it in evidence before the Committee on Ordnance, from Captain Scott, that Mr. Bessemer told him 1913 he should have liked the Government to try his principle of homogeneous metal, which he and many others believe will be found better than wrought iron, but that when he found Sir William Armstrong in possession he gave up the idea. There is also evidence that the Messrs, Walker, of Gospel Oak Works, who produced some of the best cast iron guns, made the same remark, that finding Sir William Armstrong in possession, they should abandon the manufacture of guns. Well, a Committee of this House upon Ordnance was appointed and sat in 1862–3, and I must say that on reading the details of the evidence taken before it I was astonished at the levity with which that evidence was allowed to pass into oblivion without having been brought under the notice of the House. I call my right hon. Friend the Member for Limerick, who was Chairman of the Committee, to account for the omission; and the other Members of the Committee are not altogether without blame. The evidence adduced before that Committee was of the most important and even the most portentous character; for it transpired that we had between 2,500 and 3,000 guns upon the principle of Sir William Armstrong; that there is a confessed expenditure of 2½ millions on these guns; but I believe it was very much more; and it was admitted that 100 of these guns, of the largest size, were made before a trial or experiment was entered into. That there may be no cavilling about what the result of that Committee was, I will read a few words. The Duke of Somerset, the head of the Admiralty, in his evidence said last year—The whole science of gunnery is in a transition state, and when I was this year asked what gun I approved for the navy I was obliged to say that I really did not know.Recollect, this was after nearly 3,000 guns had been made on the Armstrong principle. His Grace also declared that we had nothing better now for close quarters than the old 68-pounder made at the Low Moor Works. And the Committee report—unanimously, I suppose—that the old 68-pounder is, therefore, the most effective gun in the service against iron plates. The Committee finally say—The Armstrong 12-pounders, although stated by some of the witnesses to be too complicated a weapon for service, are generally approved;" but that "the preponderance of opinion seems to be against any breech-loading system for larger guns.1914 They recommend that the different systems should be experimented upon. And they also recommend that the accounts of the Woolwich gun factory should be kept in a more intelligible manner. ["No!"] These are not their words, but that is their sense. They say they cannot understand the accounts, I would just add a few words from a naval officer who has given considerable attention to this matter. Writing on the 30th of last June, Admiral Halstead thus summed up—The result is that the largest and most costly fleet of the world, intrusted with the security of the largest maritime empire, has long been presented to all but England's eyes without a gun fit for the special warfare of the day, and with special guns fit for no warfare whatever.I ask, is that a satisfactory state of things in which to find ourselves after spending, perhaps, three millions of money, and making nearly 3,000 of these guns? Admiral Halstead, in another letter, calls this "the great blind jump of 1859." What has been the result of the Committee? The consequence is that you have had set up at Shoeburyness a stunning competitive contest between Sir William Armstrong and Mr. Whitworth; and thus, after this vast outlay of public money upon the invention of one of the competitors, you are trying which of the two has got the best gun. There might, however, be some consolation in this, if the Armstrong guns were now really being tried against Mr. Whitworth's; but what is the fact? If I am rightly informed, the original gun which we took up and have got in stock—that is, the service gun—is not the gun which Sir William Armstrong is trying. I am toll that the original breech-loader, of which we have nearly 3,000 on hand, has been abandoned in this competition, and that there is another gun of an improved construction substituted. I saw it stated in a report of the trial in The Times the other day that the original breech-loader is withdrawn from the competition. That is not a very consolatory circumstance in the condition in which we find ourselves. I beg the House to consider what is meant when we are told that we have no naval gun. We have 12-pounders for the field if we chose to go to war in New Zealand or China; but you are not to reckon on the contingency of an enemy landing here to fight you. When I speak of your having no naval guns, I mean guns to fight with. I observe that Captain Cowper Coles talks of the Armstrong 110-pounder as something 1915 to do for a chase, or, in nautical phrase, "to tickle up a runaway." Now, let us realize the full force of the admission that we have no gun adapted for modern naval warfare. The hon. Member for Stirling (Mr. Caird) stated the other day—and we could have no higher authority—that half the people of this country during the last three years have been fed with grain and food brought from abroad. We are in the position of a garrison depending for subsistence upon our communications being kept open. If after all your expenditure you have no guns for your ships to contend with against an enemy, do you suppose that your foe would be so foolish as to attempt an invasion with a view of fighting you on land? No, if they had the command of the sea they would blockade us and starve us into submission. Our life as a nation depends on our having the mastery of our communications by sea. And yet this is the way in which those who govern us take care to keep open our communications. Well, the whole secret of the failure is this:—The Government do not understand the functions of a buyer; the whole difficulty of their position arises from their not being able to fulfil the duty of a purchaser, in a common-sense and judicious manner. The true course to have pursued with all these scientific men, when they came with their improvements in artillery, was to have encouraged them to go on, and to have promised their custom to the most successful, or, perhaps, a very small amount of help at starting. I believe that Sir William Armstrong only asked for £12,000 to begin with, and that Mr. Bessemer would have commenced making his steel guns with £10,000; and I have no doubt that for loss than £100,000 the Government might have set half-a-dozen establishments to work, competing for the prize of supplying them with guns. That is a matter which the Government will never comprehend till this House insists that they shall buy their commodities instead of making them. If they are not capable of buying their commodities in the market, do you suppose they are competent to fulfil the far more difficult task of manufacturing them? I wish to show you the position in which we, as a nation, are placed by these proceedings. We are in danger of seeing foreigners supplied with better armaments than ourselves from our own private workshops. The very individuals whom the Government have rejected and would not have dealings with have set up manufactories of ordnance 1916 for themselves. Mr. Whitworth has founded an ordnance company for the manufacture of guns. I am told that Sir William Armstrong, having closed his connection with the Government at Elswick, and received £65,000 as compensation, has set up a manufactory of guns at Elswick; and, being no longer connected with the Government, I am told that he is actually manufacturing his 600-pounders for Foreign countries. Within a quarter of an hour's drive from this spot, I saw, a few days ago, an establishment where steel guns—600-pounders—are being bored; and this firm, which was rejected by the Government, is, I am told, receiving orders for these monster guns by the dozen, while you are in this experimental mood down at Shoeburyness over the 70-pounder and the 110-pounder. I have now said all that I intend to say respecting this gigantic ordnance failure.
Then, as a still farther proof of the necessity for the Government to know how to exercise the functions of a buyer, let me refer to small arms as an illustration. Down to about ten years ago, we bought all our muskets from contractors. The Government did not make a rifle even during the Crimean war. I may here remark that the ordnance supplied during the Crimean war was of a very satisfactory character. The ordnance and small arms were supplied by private contractors to the army and navy, and they were spoken of in the highest terms in the Report of the Sebastopol Committee of 1855, which, at the same time, contained condemnations of the commissariat, of the medical, and other departments. As I have said, previous to 1855 we bought our small arms from private contractors. How does the House think the Government managed their purchases? I mention this as an illustration of their incompetency as a buyer. If hon. Members refer to the evidence given before the Small Arms Committee of 1854 they will find that the Government were in the habit of buying their muskets in component parts. They contracted, at Birmingham and Wednesbury and other places, for the stock with one maker, for the barrel with another, for the lock with a third, and so on, until they had about a dozen separate contracts for the component parts of a musket. All those various parts were sent to the Ordnance Depot, and from that depot they were given out to a distinct body of contractors, named "setters up," who fitted them together and made up the 1917 musket. Thus they who completed the musket never came in contact with the contractors for the component parts—a system most ingeniously contrived to prevent all improvement. Mr. Whitworth and Mr. Nasmyth, both eminent men, who were examined before the Committee, spoke of the absurdity of this practice, when large capitalists were ready to undertake to supply the completed article. The Government complained that they could not get muskets fast enough, because there were sometimes strikes among the workmen. They were asked in return, "Why do you not give orders to capitalists, who will set up machinery for making the entire musket?" and it was shown that the system of contracting for the separate parts multiplied the risk of delays from strikes, because if, for instance, the men struck who made the locks, they put a stop to the supply of the complete musket. The Government, however, could not be made to comprehend this, and what was the remedy they proposed for the grievance of which they complained? Instead of improving their mode of purchasing, they thought it would be easier for them to manufacture muskets, and therefore the Ordnance Department came before the Committee of 1854 with a plan for erecting an enormous Government manufactory of rifled small arms at Enfield. The Committee were decidedly against that project, and I am glad to see present the hon. Member for North Warwickshire, who was a Member of that Committee. They said, "If you wish to see better machinery introduced for the manufacture of small arms, that is one question; but it is quite distinct from the question whether you are to have a Government factory;" and, in their Report, they speak decidedly against the Government setting up this enormous establishment, because, they say, you will thereby extinguish private trade, which it would be well to preserve for your future necessities. The result was that the Government sent to America to procure machinery. Colonel Colt, the American, had been in this country for twelve months at that time, and he had set up his machinery; but the Government rather than encourage a Birmingham or a London house to enter into the trade to supply them, rushed into what has become the Enfield rifle manufactory. That establishment which then contained sixty or seventy workpeople has since grown into the employment of from 1,200 to 1,500. I am not about to con- 1918 tend that the rifle factory at Enfield has, up to the present time, done its work badly, or that it has not been profitable. If you set up machinery which is almost self-acting, and if you give it constant employment, it is not easy to make a concern otherwise than profitable; but, while doing this, yon have been driving out of the trade all those who would have set up the manufacture upon an independent and more durable basis. But the future of this establishment cannot be estimated from the past, for what is now becoming the fate of the Enfield factory? You have no longer full work for it, for you cannot continue to make the one pattern which you have been continuously at work upon—the pattern of 1853. A Committee has decided that Mr. Lancaster's rifle is a better weapon; public competition showed that Mr. Whitworth's was superior; and the consequence has been that the noble Lord the Member for Haddingtonshire (Lord Elcho) has moved, in the present Session, the rejection of the Estimate for making Enfield rifles, because they were of an inferior kind, and therefore the manufacture ought to be suspended. If, then, these rifles are to be discontinued, and others are to be made, you will be confronted with the difficulties which await you in every Government manufactory where you are your own and your only customer. During this transition period, as your production falls off, the cost of each article increases, owing to the larger proportion of the permanent fixed charges which it has to bear. To evade this, and also in order to find employment for your workpeople, you will always be liable to the temptation of going on making things which you do not want, in order to employ the people about you, and the result will be that you will be overstocked with articles which your better judgment would induce you not to buy, if you had to purchase them in the market from private producers.
I have said I do not mean to argue that making one article, and having constant employment, this Enfield establishment has not paid itself. But here are the balance-sheets relating to the rifle factory and the gunpowder manufactory adjoining, which have been laid upon the table, and upon which I wish to make one or two observations. I see they are signed "Hartington," as Under Secretary for War, but I would advise the noble Lord not to put his name to any more of these balance-sheets, as I can assure him they would not pass the 1919 Bankruptcy Court. They are not creditable to him, and they are still more discreditable to a commercial nation like this, of which, he is a representative. I wish to call attention to some facts connected with these balance-sheets. In that which is dated the 31st of March, 1863, it is stated that the articles produced in the year cost at Enfield £199,177, while if they had been purchased from the trade the cost would have been £356,378, showing a saving of £157,201. Among the items are 71,590 rifles, for which it was stated the private trade would charge 63s. 1d. each. Now, a gentleman who is at the head of the trade in Birmingham informs me that a tender was actually made this year to the Government to supply rifles at 50s. each, or 13s. 1d. less than it is said the private trader would charge. Then, again, it is stated that 13,780 short rifles made at Enfield would have cost 94s. 1d. if bought of the private trade. The same gentleman informs me that a contract was made last January for the Turkish Government through our War Office, to supply the same weapons at 65s. 9d., or 28s. 10d. less than is said here to be the trade cost. Then there are 13,000 carbines put down as costing 63s. 7d. in the private trade, but which this gentleman tells me could have been had for 50s. The amount of these overcharges upon these three items alone is £75,000. It may be objected that the balance-sheet is for 1862–3, while the prices of the private trade which I have quoted are for this year. I put that point to the gentleman on whose authority I have spoken, and he said the articles might have been had at about the same price last year, if anybody had applied for them.
I find that you can never make the conductors of these Government establishments understand that the capital they have to deal with is really money. How should it be real money to them? It costs them nothing, and whether they make a profit or a loss they never find their way into the Gazette. Therefore to them it is a myth—it is a reality only to the taxpayers. Throughout the inquiries before Parliamentary Committees upon our Government manufactories, you find yourselves in a difficulty directly you try to make the gentlemen at the head of these etablishments understand that they must pay interest for capital, rent for land, as well as allow for depreciation of machinery and plant. There is an immense capital 1920 employed in the Enfield Rifle Manufactory. The fixed and floating capital invested in materials, buildings, machinery, and land, appears from the balance-sheet to amount to £350,000. The private manufacturer, of course, in the shape of cither rent or interest, would charge himself on the whole of the amount, or if he did not he would soon find himself in the Gazette. There is more than want of self-respect in the departments which publish such accounts. It is an insult and an outrage to private trade to pretend to show by such fallacious balance-sheets how much the articles cost, and how much they would have cost if they had been bought of private traders, and to make it appear that we have had all these rifles for £199,177, while if we had bought them of private traders we should have had to pay £356,378, or £157,201 more. The whole amount of wages paid during the year was £135,700, and we are asked to believe that there has been a saving of £157,201 as compared with what would have been paid to private manufacturers. Now, we all know that for everything but labour the Government go to the same source of supply as private manufacturers do. They have not as yet established coal or iron mines of their own, and for all raw materials they have to go into the market and buy on the same terms as private establishments buy. Yet the Enfield Rifle Factory professes to have saved more than the whole amount spent in wages during the year! We all remember the story of the two gipsies who sold brooms. Says one of them to the other, "I can't conceive how you afford to sell your brooms cheaper than I do, for I steal all my materials." "Ah!" says the other, "but I steal the brooms readymade." Now I should like to know from the noble Marquess (the Marquess of Hartington), whom I shall persist in holding responsible for these accounts, to which he has appended his name, how he manages this great feat of commercial legerdemain.
Turning over two pages in this Report on the Government factories, I come to the Waltham Abbey Powder Manufactory. That is an establishment with 160 acres of land upon which they profess to grow wood for their charcoal, with water-power of immense extent, with large buildings for business and for dwellings, and, of course, with a great amount of machinery. Their business is not a large one. They return themselves as having produced in the year 14,526 barrels of powder, which they value 1921 at £34,747. Then, after the usual memorandum that this is exclusive of interest of capital, depreciation of plant, &c., they show that these 14,526 barrels of gunpowder if supplied by private makers would have cost £79,933, so that they have effected for the Government a saving of £45,185. Now I say, that for a country calling itself a commercial nation to have such accounts published and signed "Hartington" is monstrous; and it only shows the utter valuelessness of anything that the noble Marquess may say at that table on this subject. The noble Marquess has shown that he possesses too much ability to make these statements on his own authority; but it is clear that he recites anything that is put into his bands, and therefore what he may say at the table is not worth the slightest attention. Now, let us see how all this is managed. The capital represented by buildings, water-power, machinery, and rolling stock is £300,000, and no [interest is charged on that. The land is worth £20,000, but there is no item for rent. Nothing is allowed for rates and taxes, and nothing for insurance. Now, I asked a very well-informed gentleman what the custom was in the private trade with regard to the charge for insurance on a gunpowder manufactory. Of course the Royal Exchange, or the Phœnix Company, would not like such risks. So I find that private traders are in the habit of allowing about 25 per cent for insurance. Nothing of the sort is allowed for here. Enough has probably been said to show that the system on which these Government manufactories are conducted is wholly unsound, that there is an utter absence of responsibility, that there are none of those motives for saving money or avoiding losses which private individuals have; and that, wanting the motives which are necessary for human action, it is impossible that these establishments can be carried on properly.
Let me just touch for a minute upon another matter—the great clothing establishments. Earl De Grey and Ripon, as the head of the War Department, is not only the largest manufacturer of ordnance and of small arms, but he is the most extensive tailor in the world. [Laughter.] You laugh, but all these tailoring transactions are carried on in his name, and he is responsible for everything. [Laughter.] You laugh at the idea that Lord De Grey should overlook all these details; but is it not a serious thing for the country to have 1922 an immense business of this kind carried on virtually without control? About ten years ago, the system of clothing the army was changed, and instead of clothing-colonels we had clothing by contract. For a few years that system continued, and the right hon. Gentleman (General Peel) introduced an improvement in the purchasing department. Down to this time the custom was to contract for the clothing by piecemeal, getting the buttons, braiding, and clothing separately; but the gallant Officer had contracts made for the whole garment. We were told in evidence before the Army Organization Committee by the gallant Officer, by the Commander-in-Chief, and by another witness, that the system worked very well. But there was a plot all this while to divert the manufacture of army clothing from private makers into the hands of Government officials. The plot was stealthily carried out. A small establishment was first set up at Woolwich for making clothes for the Artillery and Engineers. That establishment was to go no further. Then a small manufactory was started at Vauxhall for making clothing for the Guards. As one more illustration of the fallacious grounds on which these Government manufactories are established, I will give a brief extract from the evidence given before the Committee on Contracts, which sat in 1858, by Sir Benjamin Hawes, then permanent Under Secretary at the War Office—and we all know that a permanent official often knows more than his chief. He handed in what he was told to give as the cost price of a soldier's garment. There happened to be a man of business on the Committee, my hon. Friend the Member for Newcastle-under-Lyne (Mr. Jackson), and he, mistrusting the calculation, took the subject in hand, and cross-questioned the witness—You have given the Committee the actual cost to the Government of the clothing and the making of the clothing for one man?—Yes. Independent of all departmental charges, and so forth?—Yes. These charges would be plus salaries?—Yes. Plus interest of capital?—Certainly. Plus rent?—Certainly. Plus damage and every other contingency?—Yes. And carriage and ink, and pens and paper, and all necessaries for conducting the business?—Yes. Therefore that is not a fair return of what it costs the nation, because if you have to pay those charges in addition, those prices are not the actual cost to the country?—They (are not. So that the return is a fallacious one?—It is not a complete one.I will read another extract from the evidence of the same witness. In justice to my late friend, Sir Benjamin Hawes, I must add 1923 that he never contemplated the creation of a Government clothing establishment on its present gigantic scale. Alluding to the manufactory of clothing for the Guards, which had been established the previous year at Vauxhall, he recommended only a slight extension of the factory, so as to supply a regiment or two of the Line. He is asked—As I understand you, it is not proposed that that establishment should be extended so far as to make all the clothing for the army, but only a portion of the clothing of certain regiments, in order to give you a test as to the price?—Certainly; I hope never to see a great Government establishment for clothing the army. The more such establishments are used for the purpose of obtaining information and obtaining models the better; but I look with some apprehension upon all great Government establishments.…. It is very desirable that a Government establishment should produce the minimum, and the private trade of the country should produce the rest.At the very time this evidence was being given, when the House would have refused to sanction a large extension of the clothing establishment, the plot was all laid for getting into the hands of the War Department the manufactory of the clothing of the whole army, with a slight exception. An enormous building has been erected at Pimlico—put up, I believe, upon most costly ground, the item of ground-rent being between £2,000 and £3,000 a year—and they now make there the clothing of every regiment, and manufacture everything, with the exception of the tunics, for about fifty battalions, which comprise, perhaps, one-tenth of the whole supply of clothing for the army: I suppose this exception is maintained in order to enable the noble Marquess to tell this House that the Department has not a monopoly. The accounts rendered of this Clothing Department are most fallacious. I find that about £15,000 a year for fixed charges and interest of money have never been brought into the account at all, and that there is no allowance for rates and taxes. Taking into consideration the waste and fraud to which an establishment for a trade like that is so peculiarly susceptible, when the materials used are cut up into pieces, I must say that it is one of the most unwise and injudicious undertakings that could have been entered into, I have already said, you never find with respect to those establishments that anything is put down for rates, taxes, lighting, or charges of that kind. There is a fallacy in this. If the tailoring business is carried on by the Government, somebody else is deprived of it, 1924 who would have paid rates and taxes, including the income tax. Let us suppose the extreme case, that all the manufactures of the country were carried on by the Government, and that they were all exempt from taxation, how would the Chancellor of the Exchequer get his revenue?
I now come to the management of the Royal dockyards, to which the remarks I have made apply with greater force than to any other department. We have had repeated debates on that subject, and Committees and Commissions have reported on it without end. The tendency of our debates during the last few years has been to prevent, if possible, the Admiralty from continuing to make things which we knew were of no use—to prevent them from building wooden ships, when everybody knew that iron ships would be wanted—and great three-deckers, when all scientific men were aware that they would be mere slaughter-houses if opposed to modern combustible missiles. What, in the meantime, has been the tendency at the Admiralty? The heads of the dockyards have been endeavouring to counteract Parliament by securing votes for timber in every possible way, and even by buying timber with money voted for iron ships, in order that, having the timber on hand, there may be an excuse for using it for the purpose of building obsolete vessels of war. I have spoken plainly with respect to the right hon. Member for Droitwich and the noble Lord the Secretary of the Admiralty, and I hardly know which to blame the most for bringing in Estimates which they must have known entailed an improper waste of money. I blame the noble Lord most, because I know that he knew better. But, after all, there is probably something to be said on the other side. If you win have these enormous establishments employed for one customer only, you are always in danger, in seasons of transition, of having a great number of workpeople thrown out of employment. This operates on the feelings of humane men, responsible for their subsistence, and induces them, under the guidance of their feelings, and against their bettor judgment, to manufacture articles which ought not to be made at all. There is no doubt that we have been spending millions of money on the construction of valueless vessels, and that you have from 50 to 100 great wooden ships which ought never to have been in existence, and will never be of any use, but which were in great part built because you have a sys- 1925 tem which compels you to find employment for your men. If, instead of being builders, you had been buyers of ships, does any one suppose that you would have purchased one of those obsolete and useless wooden vessels? I speak to hon. Gentlemen on the other side of the House in the confidence that they will co-operate with me on this occasion. They are said to favour large Votes for the military and naval services. But no party in the Mouse is interested in the waste of public money on these establishments. They find me but little disposed to vote money for the army and navy; but I am always for paying the men well, and I would give them more money than they get now, though I should certainly be satisfied with fewer of them; but you cannot indulge in more liberality towards the men while you tolerate the waste and extravagance of keeping up these large manufacturing establishments; for all these charges come under the head of army and navy, and swell up in the eyes of the country the amount expended on the services.
I wish to ask why we should not take advantage of the present time, when passing from wooden ships to iron ships, and do with the bulls of vessels what you do with your marine steam-engines—buy them, keeping up the Government dockyards only, as far as might be wanted, for repairs. Where would be the risk or inconvenience from such a change? Do you think that the shipbuilders in private yards could not perform the work as satisfactorily as the Admiralty? There are, I believe, at this moment, upwards of 500,000 tons of shipping building in private yards; and during the last year there have been building in this country fifteen ships of war, of an aggregate of nearly 40,000 tons, for the Governments of the following countries:—Denmark, Italy, Spain, Russia, Turkey, China, Prussia, Peru, Portugal, and two j rams supposed for the Confederate States. With the exception of a small vessel of 500 tons, which is of wood, all these ships, I am told, ate being built of iron. Do you suppose that the private builders who are constructing ships to this enormous extent cannot build the hulls of your vessels of war? Why, you already procure from private manufacturers the most important part of your steamers, that which requires the greatest skill and the most reliable probity in its production. You get your steam-engines wholly from private establishments. I remember sitting on a Committee 1926 upon the Navy in 1848, when we were just in time to prevent the Government dockyards from commencing the construction of steam-engines. The rule laid down, and ever since acted upon, was that the Admiralty should repair their engines but not make them. This has been found to succeed most admirably; it is the only branch of your naval construction about which you never hear any complaint. No Committees of this House have been called for, no blue-books have been required, for improving the construction of marine steam-engines. The difficulties in the dockyards have been in connection with the building of the hulls of ships. Why should not the plan which has worked so well with the engines be equally applicable to ships? This is a most opportune time for making the change, just when the armour-clad vessels are coming into use. At the present moment you have no means of making iron-plates for the armour-ships, but I have no doubt that if the House permitted, the authorities of the dockyards would get up plans for having iron rolled in those establishments.
There is an old plea for maintaining these Government establishments upon a small scale, on the ground that you may be able to manufacture a little so as to serve as a test and a check upon contractors. Such a course might have been to some extent unobjectionable formerly, when there were few competitors; but we live now in a time when such a check is unnecessary; for are not great shipbuilders, great gunmakers, and large tailoring establishments, better checks upon each other, through the force of competition, than you can possibly be upon them? If the accounts in the Government establishments are honestly made out, then you will find that the Government, carrying on a small business without the usual motives for economy, produces things at a very dear rate, and the contractors will expect to be paid at this price, which you say should be the model one. If, on the other hand, the accounts are made out like those to which I have referred, and private producers are expected to compete on such terms, then every respectable manufacturer will throw aside the invitations for contracts with disgust and scorn, and refuse to have anything to do with such departments. But is not the fact of the perfect success of your marine engines, without any such check as is proposed, a sufficient answer to this plea? Surely the great waste which 1927 we know to have been so long taking place is a sufficient motive for a change. I was talking the other day to an eminent practical shipbuilder on this subject, and this is the substance of what he told me—There has been expended in wages to artificers, naval stores, for the building, repairing, and outfitting of the fleet, steam machinery, and ships built by contract, new works, improvements, and repairs in the yards, from 1859 to 1863 inclusive (five years), £24,350,000. Taking into account the values of all the iron-clads built and building, and giving a large sum for useless constructions of wooden ships, and making a liberal allowance for equipment and repairs, still there will be left more than ten millions out of the above sum for the expenditure of which a private shipbuilder could assign no rational purpose.I remember the noble Lord the Secretary to the Admiralty saying, some time back, that he could not trace several millions of the Estimates, in any results to be discovered in the dockyards, and I suppose my friend the shipbuilder has been engaged in a similar search.
It has been said that if we retain the powers of production in our Government establishments, and a war breaks out, we shall have the means of bringing all these powers to bear on the preparation of our armaments. There is, I think, a great deal more to be said on that score, in favour of my plan of giving the work to private establishments. If our private shipbuilders were employed by our own as well as by Foreign Governments, then we should have a dozen or a score of large firms engaged in constructing ships of war not only for ourselves, but for half the world. In the same way if the Government merely kept the factory at Woolwich for repairs, or let it, and gave orders to private houses for the supply of their artillery and ammunition, you would have half-a-dozen or half-a-score, as the case might be, of great establishments producing these articles for our own and Foreign Governments. In the present very low state of civilization, in which no country feels itself safe, particularly if a weak Power, but when, fortunately for humanity, there is a principle developing itself in mechanical science which gives a great advantage to those who act on the defensive, especially against an aggressor from a distance, I am inclined to think there would be constantly a very great demand for munitions of war by foreign countries—South America, for instance, Japan, and others, who would arm themselves in order to be safe against attack. And I am not prepared to say 1928 they would not do well in thus arming themselves, because the stronger a Power is the less temptation does it offer to outrage. What, then, if you pursued the course I recommend, would be your position? In case of a war breaking out you could prohibit the exportation of ships of war and munitions of war, and you would be instantly put in exclusive possession of the whole of the resources of all the private establishments which were previously working not for you alone, but for Foreign Powers as well; while, on the other hand, the Foreign Governments would find themselves cut off from the supplies on which they had been relying. I can imagine no contrivance by which you could place yourself in so advantageous and economical a state of preparation for war as this.
There is, however, another reason why the two systems of partially manufacturing for yourself as a Government, and partly purchasing from private traders will not harmonize. The heads of your manufacturing departments must virtually be the buyers of such commodities as their departments want. Colonel Dickson, the head of your rifle manufactory at Enfield, or somebody under him, practically makes all the purchases of small arms; and there have been repeated complaints from Birmingham of the unfairness of a rival manufacturer being constituted the "viewer" of the rifles supplied by private contract. At Woolwich there was an extraordinary example of this state of things, when Sir William Armstrong had to judge the quality of the productions of his competitors. The head of a manufacturing department has always an interest in giving a preference to his own productions or inventions, and disparaging those of outside rivals. There was the case, for instance, of Captain Cowper Coles's turret ship. That was the invention of an outside man; and there is no doubt there has been an unseen but a felt reluctance on the part of the dockyard people to carry it out speedily. I live near Portsmouth, and have myself observed what has been going on. It is nearly four years since Captain Coles proposed his plan to the Government. It is more than two years since they began to cut down and plate the Royal Sovereign, in order to convert it into a turret ship. In the meantime Mr. Reed comes into power. I will not say a word in disparagement of that gentleman. I have no doubt he is a man of talent. We, who sometimes complain of routine, have no right to object 1929 to an outside man stepping into a high place in the service on account of his assumed abilities. Mr. Reed, however, must be more than a man, he must be an angel, if he did not feel that his importance and value at the head of the construction department of the navy would be enhanced by his producing something which should be better than Captain Cowper Coles's invention, and should be completed earlier. So he sets to work on the Research. I am no authority on these matters; but I hear an universal opinion that Mr. Reed's immovable square battery is anything but an improvement on Captain Cowper Coles's revolving turret. The world have decided that question, as is shown by the course taken in America, and by the orders received here from foreign countries. But what are the facts? Mr. Reed's vessel, the Research, though designed later than that of Captain Cowper Coles, was launched and at sea considerably in advance of the Royal Sovereign. Now, I am not making any attack on individuals; I am only illustrating the working of a system. If instead of a construction department in your dockyards, you had a buying department, then Mr. Reed, or Admiral Robinson, or whoever were the heads of it, would seek out such men as Captain Cowper Coles, or the hon. Member for Birkenhead, and confer with them, would look abroad and avail themselves of inventions and improvements as they arose, without any feelings of rivalry arising from their own personal interest as inventors.
Before I conclude, I must impress on the House the absolute necessity there is for a thorough reform of the buying department of the Government. Do not call it a contract department. That is the old name which was used as an excuse for ignorance and incompetency, when officials gave out contracts according to a red-tape rule, taken, perhaps, from a pigeon-hole where it had lain for fifty years, and scarcely to be understood by the modern manufacturer. If a firm was doing a prosperous business with private customers, it would have nothing to say to such a contract, and it went to some one who had nothing better to do, and who hoped he might possibly make something of it. A person sent me from Manchester a copy of the specification for a tender for tarpauling, in which the most minute particulars were set forth in a tone of dictation, that, if it were not ludicrous from its ignorance, would be really insulting to any respectable manufacturer. 1930 It was just such a circular as a man of large business would throw into his waste-paper basket; and it contained a requirement that the canvas should be sent for inspection before being tarred. So that, as my correspondent said, he was expected to send all the canvas from Lancashire to London, and then to convey it back again, when, if it had been required that a strip should have been left untarred, it would have answered the purpose. Why should they not have devised a means for clearing off part of the tar themselves? This is a specimen of the way in which the Government contracts are entered into. I would have all that altered. But my plan involves no disparagement of the services of those able men now in your employ; you will want all the brains you have in your constructing department for your buying department. I have no doubt that Colonel Boxer, Mr. Reed, and the other heads of the different manufacturing departments, would make most excellent buyers. If they are not competent for that I would employ men who are, and I would pay them on a far higher scale than you pay the heads of your departments, for you cannot have men fit to be trusted to go into the market and buy things in the way in which they ought to be bought unless they are placed in a position to be above all temptation. Therefore, I would have men of the utmost capacity; but I should lay down this condition, and insist upon it—that if you cannot in England buy what you want, it is you yourselves who are to blame and not the producers of the country. England is now sending abroad £150,000,000 sterling worth of productions every year. There is not a shilling's worth of that produce that would be bought here if it could be obtained better and cheaper elsewhere, and yet it continues to be bought in larger quantities every year. If you hear anything disparaging to our modern mode of conducting business, that such and such articles are not made so strong and durable as they were at former times, laugh at all such shallow criticisms. The manufacturers here produce for others just what they wish to buy, although, in consequence of the more rapid changes of fashion, it is certainly not the habit of our daughters to wear silk dresses of the strength which were worn by their grandmothers. Then I say that, if in a country which produces every year £150,000,000 sterling of manufactured articles for exportation, the Government fail to obtain 1931 the £10,000,000 or £15,000,000 sterling worth of goods which they want, be assured that it arises entirely from their incapacity to buy them. You must have men selected for their ability to buy the commodities you want. If you consult such great wholesale houses as Leaf's and Morrison's in the City, whose buyers purchase millions' worth of articles in the course of the year, they will tell you at once, "We can do with comparatively inferior men to sell our goods, but we get the best men we can to buy them."
I will conclude with a remark in reference to the present state of our armaments. When I consider what has been done in the Armstrong guns, and our armaments generally, I regard it as a deep discredit to the Government of the country, and of itself it ought to compel a change in the system. You have invited this disgraceful state of things by undertaking to do that which you ought never to have attempted. We are governed in this country—I do not use the word invidiously—by a class, and it is a very narrow class indeed, which forms the personnel of our administrations. I do not complain of that, inasmuch as our manufacturing and trading community do not seem disposed to educate their sons to compete for the prizes of official life; but I wish you to bear in mind that by such a neglect and mismanagement as you have fallen into in regard to your artillery and ships you may produce the most serious consequences. I know of nothing so calculated some day to produce a democratic revolution as for the proud and combative people of this country to find themselves, in this vital matter of their defence, sacrificed through the mismanagement and neglect of the class to whom, with so much liberality, they have confided the care and future destinies of the country. You have brought this upon yourselves by undertaking to be producers and manufacturers. I advise you in future to place yourselves entirely in dependence upon the private manufacturing resources of the country. If you want gunpowder, artillery, small arms, or the hulls of ships of war, let it be known that you depend upon the private enter-prize of the country, and you will get them. At all events you will absolve yourselves from the responsibility of undertaking to do things which you are not competent to do, and you will be entitled to say to the British people, "Our fortunes as a Government and nation are indissolubly 1932 united, and we will rise or fall, flourish or fade together, according to the energy, enterprize, and ability of the great body of the manufacturing and industrious community." The hon. Member concluded by moving his Resolution.
§ COLONEL BARTTELOT,
in seconding the Motion, begged to thank the hon. Member for Rochdale for the able and temperate manner in which he had brought the subject under the notice of the House. As guardians of the public purse, it was their duty to see that the money voted was properly, fairly, and honestly expended. He thought that the taxpayers of the country would read that debate with pleasure, because they would see that the House was not inattentive to the way in which the Votes were expended by the Government. If they attended to that point the democratic revolution hinted at by the hon. Member would be averted by the independent Members of the House. He wished to call attention not only to the question, whether the money voted by Parliament had been properly expended, but also to the question whether the results of the expenditure were such as the country had a right to expect from the outlay. In the first place, he had to remark, that notwithstanding all the money we had spent, they had not a gun—certainly not a naval gun—such as a great nation like ours ought to have. Considering the amount spent in the dockyards we were not so well provided with iron-clads as we ought to be. Long since the Admiralty were warned that wooden ships would be of little or no use; nevertheless the Admiralty persisted in building them and had neglected to provide a number of iron ships sufficient to cope with the navies of other nations. In 1854 the Duke of Somerset (then Lord Seymour), in speaking on the Ordnance Estimates, stated that the opinion of several Members of the Government was that it was not advisable that the Government should be manufacturers, except to a small extent—that the general system ought to be one of contract, and that no one believed in the cheapness of Government establishments. Circumstances had certainly not changed since then, and what was objectionable in 1854 was quite as objectionable in 1864. Of late years a manufactory had sprung up at Pimlico, upon which a vast sum of money had been expended with the most unsatisfactory results. It was true our infantry regiments were better clothed than they were some years ago; but that 1933 might have been as well accomplished by contractors under proper superintendence—the expense was nearly double; and with regard to the cavalry regiments the new system had entirely failed. In Ireland there was a contractor who competed with Pimlico, and whose price for a tunic was 16s. 4d.; but he had been informed that whatever his price might be the Government would produce the article at a penny lower. It was the duty of the House to see whether or not the Government manufactories could manufacture at a cheaper rate than private individuals, and if not to adopt some better arrangement. When the Crimean war broke out numerous establishments of this kind sprung up, owing, in the first instance, to the outcry that arose because the gunboats were found to be rotten. In the panic that existed during the Crimean war recourse was had to contractors for building gunboats. Called upon suddenly, the contractors had to build them of the first wood they could lay hands on. These boats were placed high and dry in the yard at Haslar, and a Vote was taken to put them under cover. He had himself gone to see them, and had put his stick through the bottom of one of them; on which an old man in the yard remarked that that was not wonderful, as the boats were out of their element. So that was a useless expense. It was, he thought, the duty of the House to inquire whether the work done in the Government yards could not be done better and cheaper by our private shipbuilding firms. He thought that the recommendation of the Dockyard Committee deserved attention, and whether instead of increasing their dockyard accommodation, they might not subsidize some of the large shipbuilding concerns, and help them to construct large graving docks. Supposing one of those graving docks to cost £100,000 for a subsidy of £15,000 or so towards that sum, we might easily secure a prior claim to the use of the dock in the event of our going to war. In that way we should possess all the facilities we required for the repair or construction of our men-of-war. No one in that House, with perhaps the exception of the Secretary to the Admiralty, could tell the cost of any ship that was built. No account was laid before the House as to the particulars. The same observation applied to the Ordnance Department, and the Pimlico establishment. They ought to have laid before them such accounts as any private firm would place before its partners every 1934 year, showing in all its details the cost of everything manufactured, taking into consideration the outlay upon land, buildings, machinery, and charging 5 per cent for floating capital. Unless that were regularly done, they would have no accurate mode of comparing the cost of the articles made by the Government establishments with the contract prices for the same things. At present the head of each department got the money he wanted—it was expended—and often articles were manufactured which, when peace came, were useless, and were then sold. The taxpayers of the country had a right to know that their money was properly expended. Moreover, unless these public establishments paid taxes the returns would be fallacious, because they interfered with the setting up of private manufactories, which would otherwise have been paying large sums into the Exchequer. The noble Lord the other night lauded himself on account of the prosperity of the country, but the noble Lord had not told them what had been expended during the last five years. During the last five years they had spent £350,000,000. The present Parliament had been called a prodigal Parliament, but that word was more applicable to the Government than to the Parliament. There was ample room for retrenchment and economy, and it was not too late for the Government to mend their ways. Reform and Retrenchment used to be the watchwords of the noble Lord and his Friends. Whatever he did with Reform, he hoped the noble Lord would stand to the principle of a wise retrenchment. If the noble Lord would only turn his attention in that direction he would deserve the thanks not only of the House but of the country.
That the recent great extension of Government manufacturing establishments calls for the attention of the Government. That it is expedient that steps he forthwith taken to place each separate establishment as nearly as possible on the footing of a private manufacturing concern or a public company, by taking a valuation of the fixed and floating capital employed, including the value of the land; and that upon this basis there be an annual stock taking; when, after making all the customary deductions for depreciation of buildings, machinery, and plant, interest of capital, rates and taxes, and other charges, such a price be charged to the Government Departments for articles supplied as shall preserve the capital intact, and that these accounts, with a balance-sheet, be laid annually on the table of this House.
§ MR. MONSELL
said, he wished to address a few remarks to the House, as the 1935 hon. Member for Rochdale (Mr. Cobden) had specially alluded to what had occurred during the time he (Mr. Monsell) had the honour of holding office in the War Department. His hon. Friend had passed an undiscriminating censure upon all Government manufacturing establishments. In that sweeping censure he could not concur, because there were marked distinctions between various establishments; but in some points, and especially in that part of his speech which referred to the Armstrong guns, he entirely agreed with him. The question was put to him by the hon. Member for Rochdale, why he, as Chairman of the Committee upon Ordnance, had not brought forward a Motion upon the subject in the present Session? His reply was, that the Government had now done precisely that which, under the circumstances, it appeared to him it was their duty to do—they had entirely abandoned the manufacture of the large guns, and had instituted, as the Committee recommended, a series of experiments in order to find out which was the best gun. It was to be regretted that those experiments had not taken place before the enormous expenditure upon Armstrong guns had been incurred; but as the Government had now taken that course he did not feel himself called upon to make any Motion upon the subject. There was one difficulty which presented itself at the outset of the hon. Gentleman's observations. The hon. Gentleman called in question the accuracy of all the calculations and the balance-sheets that had been submitted by the different departments, and he accused the Treasury of having taken no part in arranging these balance-sheets upon a satisfactory system, so as to reveal to the House the true cost of the articles produced by the different establishments. To that statement he (Mr. Monsell) must give an emphatic denial. In every step he took while he had the honour of holding office—and the amount expended was large, £600,000 in machinery, a large 6um in buildings to contain it—in every step he took he had the inappreciable advantage of being in close communication with Sir Charles Trevelyan, who was then at the Treasury, than whom nobody could be more competent to form a judgment on such matters. A Committee was appointed by the Treasury to go to Woolwich to investigate the system of accounts, and after a close inspection they reported it to be entirely satisfactory. He might remark that the Trea- 1936 sury was rather a fault-finding department, not very much disposed to take too favourable a view of the proceedings of other departments. But beyond the Treasury there was an office within the department itself—the Accountant General's office—where every transaction was investigated in the closest manner. In addition to all these examinations a Commission was appointed a few years ago, on which the hon. Member for Manchester (Mr. Turner) was a member. That Commission thoroughly investigated the system of accounts, and expressed complete satisfaction with them. He had dwelt upon this point because he wished to show that his hon. Friend had no ground for the charge he had made respecting the accounts. The fact was, the hon. Member had got hold of a principle which he considered as of unvarying application, and which he could best illustrate by a reference to Hume's Essay on Miracles. Hume said it was more easy to believe that the evidence was wrong or mistaken than it was to believe that the miracles had occurred; and so the hon. Member for Rochdale declared that it was more easy to believe that all the people who were most conversant with the subject were ignorant and were deceived than it was credible that the Government could manufacture articles in an economical manner, and with benefit to the country. It must strike every one that the question of cost, although important, was not the only, nor even the principal consideration. The real question was this—"Do the manufacturing establishments at Woolwich and Enfield contribute to the honour and dignity of the country; do they add to its strength, and are they to be considered in the same category as iron-clad ships and fortifications? Are they an important part of the defences of the country?" Certain principles had been laid down by his hon. Friend in which he entirely concurred, and one was that articles in ordinary use that were capable of being rapidly produced and effectively tested should be procured as a general rule from the private trade. Again, he quite agreed with his hon. Friend that if Government establishments were not carried on upon a good system they must be failures. But he said that these establishments produced articles that did not enter into ordinary use, and were, as a rule, conducted on good principles. The system laid down when he was in office was the wise system of individual responsibility. 1937 Absolute and entire control was given to the head of each department, who was allowed to select those men whom he considered most fitted for the work on which they were to be employed. His hon. Friend had inferred that Government encouraged manufactories in a great measure in order to obtain patronage. Now, the Government in this instance had given up patronage. They said to the head of the department—"We hold you individually responsible for the work you perform. Choose your own instruments, and remember that after we have given you that authority we have a right to look to you for everything." He admitted that the clothing department, developed to its present extent, sinned against the principle which had been laid down, that the State should not supply articles which could be easily got and tested. In that matter he thought the Government were wrong. As to the accounts, though in his opinion they were well kept, he thought that Parliament ought to be made acquainted with every detail connected with them, and that the watchful eye of Parliament was essential to the working of the system in order to see that the departments did not degenerate into the state they were in before the Crimean war. Now, he thought the best way of answering the charges of his hon. Friend would be to state what was the condition of things at the breaking out of the Crimean war. His hon. Friend had given the House to understand that everything was going on well at that time. Speaking from personal knowledge, he could say that the very reverse was the fact—that the system of having no Government establishment, or very small ones, completely broke down; that the then existing establishments were most inefficient, and that if a war had been carried on demanding any great expenditure of ammunition and of the different appliances of war, the system would have broken down disgracefully, and we should have been very near some serious disaster. With respect to the question whether we were well supplied or not with military stores at that period, he would first refer to the supply of shells. Mr. Anderson, who was then inspector of machinery in the Royal Arsenal at Woolwich, reported that at the commencement of the war the several factories were carried on as a general rule, with most unproductive implements, and he went on to express his belief that the old system was very inadequate to 1938 supply the demands of the service. His hon. Friend said that not a single shell manufactured at Woolwich was fired at Sebastopol. This was a complete error. A large number were fired there, and he hoped that they did good service. But now look at the contracts for shot and shell entered into during 1854–5. An order for 200 tons was given, and they were to be delivered in two weeks; but they were really not delivered till January, 1856. A similar agreement was made with another firm, but there was no delivery till June, 1855. Another firm undertook to deliver 150 tons of shot and 150 tons of shell by the 7th of January, 1855, and the same quantity weekly afterwards. The first delivery took place in June, 1855. In another case six months' delay took place. There was no reason to suppose that things were altered now. It might be supposed that in a manufacturing country like ours it would be easy to obtain a sufficient supply of shot and shell. Experience showed that it was not so. We were now secure, for a quantity of shot and shell equal to the whole of that expended at Sebastopol might be produced at Woolwich within six weeks, and the whole of the cartridges fired during the siege might be produced in three weeks. Surely the safety and the influence of this country were increased by such a change? In talking of the expense of keeping up the departments, his hon. Friend had made no allusion to the fact that, as we had the means of producing so readily this vast quantity of matériel, an enormous saving was effected, because it was now no longer necessary to keep such immense supplies in store. When his hon. Friend talked of interest upon machinery and plant and so forth, he might have instanced this saving. Another point to which his hon. Friend referred was the manufactory of small arms at Enfield. He was surprised at his hon. Friend's remarks upon this head, because he thought the whole world acknowledged the complete success of that establishment. His hon. Friend entirely broke down in his attempt to show any error in the calculations at Enfield. As only one article was manufactured there, the calculations were easily made, and unless there was the grossest dishonesty on the part of Colonel Dickson, one of the most honourable of men, the true state of the case must of necessity appear in the balance-sheet. At the breaking out of the Crimean war the difficulty in procuring small arms from the trade in 1939 England was such that the Government were obliged to submit to the disgrace of ransacking the world for the purpose of procuring them. They sent to Liege, to America, to St. Etienne. Orders were given for 20,000 small arms within some limited period, and they were not supplied for months and months afterwards. The same difficulty was experienced in getting 2,000 artillery carbines, and an enormous length of time elapsed before they were supplied. He would come now to the question of cost. The Miniérifle manufactured at Enfield cost 37s. 1d.; the contract price from the trade was 65s. His hon. Friend said that some gunmaker had stated that he could produce it for 50s. But had any gunmaker ever done so? If there was, it was only because of the Government establishment at Enfield. Was anybody so "green" as to think that gun-makers, if the Government depended only on them, would not do now what they had done in 1852, 1853, and 1854, and charge the same prices which they had charged then? But his hon. Friend had said, "Oh, but you are going to change your pattern of rifle." However that might be, he could inform his hon. Friend that nothing could be easier than to change the machinery at Enfield in such a way as to produce the new pattern, and that a change of pattern would be attended with much less expense than if the Government had no factory at Enfield. His hon. Friend had talked about the smallness of the establishment prices being caused by the omission from the estimate of the taxes and the rent of the land; but he ought to have put down to the credit of the department the saving which they effected by producing an article for 37s. 4d., which otherwise would cost 65s. When they took into account that on an average 50,000 or 60,000 rifles were made every year and in some years 70,000 or 80,000—[General PEEL: More than that]—it would be found that the saving effected would pay two or three times over for the cost of the factory since it had been established. It was only a one-sided view of things which his hon. Friend took, for he could not believe it possible that an establishment provided with the best machinery could produce the same articles infinitely cheaper than they could be produced at Leeds or Birmingham. That brought him to a very important matter—the cost of shell—and he was glad to see that his hon. Friend had just entered the House. Colonel Boxer had 1940 distinctly stated before the Military Organization Committee, of which the right hon. and gallant General (General Peel) was a Member, that in the course of some two or three years there had been a saving in the cost of shells produced at the factory of more than £200,000. Over that Committee presided Sir James Graham, and he was unable to break down Colonel Boxer's evidence on that matter. [Mr. COBDEN: It is ridiculous to compare times of peace and war.] Well, then, his hon. Friend admitted that in time of war Government factories were good things. If not, what did the interruption mean? He maintained that the £200,000 saving had paid three times over for the expenses of the foundry, and whether that saving was effected in time of peace or war made not the slightest difference in the world. As to the contractors, the shell supplied at £9 a ton, they charged £14 for on the breaking out of the war, and then they did not supply as fast as was required. The Woolwich and Enfield establishments were as much a part of our defences as our fortifications and iron-clads. But in the eyes of his hon. Friend everything was black in the Government establishments, and the contractors were white as snow. It was a remarkable fact which was stated by Sir Benjamin Hawes, referring to the time of the Indian mutiny, that the greatly increased power given by the Government establishments had compensated for the absence of stores. He (Mr. Monsell) was therefore borne out in the statement which he had made, that the existence of these factories rendered it unnecessary for us to keep enormous supplies of stores, which otherwise would be indispensable. His hon. Friend then passed to the question of the Armstrong guns. But it had been distinctly proved that, so far from the establishments at Woolwich having been a cause of expense to the country in the production of these guns, both guns and ammunition were produced there more cheaply than at Elswick. Then the hon. Member said that an enormous sum of money had been spent on a cast-iron gun foundry without producing a single serviceable gun. This was not the fact. Only a few cast-iron guns were made, because soon after the foundry was completed the Armstrong gun was introduced into the service, and that with the exception of the moulding and the casting boxes, costing £6,700, the whole of the building, machinery, and so 1941 on was applied to the manufacture of the Armstrong gun. The assertion that the cast-iron guns produced there were expensive, because just at the time they were getting into work the system was changed, was as absurd a thing as to say that the Charing Cross Railway was a failure, because during the few months it had been at work it had not produced enough money to pay the cost of construction. The only loss on that gun factory had been £5,664. But what were the conditions under which it started? His hon. Friend seemed to think that it was some invincible desire on the part of the Government to extend their factories which led to the establishment of this factory. But the real reason was that the 13-inch mortars when tried against Sweaborg had burst, and so also had two others; and on the 5th of September, 1855, Colonel Wilmot, a most able officer, wrote to this effect, that he was firmly convinced, in common with most officers who had considered the subject, that it was absolutely essential to the security and efficiency of the service in this most important particular, that England, following the example of other nations, great and small, should have a foundry for iron ordnance on such a scale as might enable the Government to feel certain as to the supply of serviceable ordnance. The cost of the building, erected in consequence, was £60,707, of the machinery £37,500. The whole was afterwards applied to the Armstrong factory, which produced guns so much more cheaply than elsewhere; and the whole loss was only £5,664, although 249 guns had been cast in the factory. With regard to the clothing department, he had already admitted he should be glad to see it reduced to smaller dimensions. There were, however, certain articles the goodness of which could not be tested unless the process of manufacture was watched, and these articles ought to be manufactured by the Government. He was anxious that the House and the public should be acquainted with the true state and condition of the Government manufacturing establishments, and the cost at which the various articles were produced. Considering the interest which the subject excited in the public mind, he should look with the greatest satisfaction on the appointment of a Royal Commission to inquire into this subject and make a report. [Mr. COBDEN intimated his dissent.] He should like to see his hon. Friend 1942 upon the Commission. The late Sir James Graham had the same prejudices as the hon. Gentleman with regard to Woolwich. But he paid a visit to Woolwich, he looked into the matter for himself, and the result was that he changed his opinion. If his hon. Friend would only sit on a Commission he predicted that the same result would follow. It was of the highest importance to this country that the Government should have in their own hands the means of manufacturing the appliances of war. He had in this matter felt his way step by step. He began when he was in office by establishing a small foundry, and then when he was satisfied with the results he went on to a larger one. He believed that the Woolwich factory was not only a source of strength to this country, but that it had also saved the country large sums of money, and instead of discouraging by his criticism the able officers who presided over it, his hon. Friend ought rather to have given them the credit they deserved. He believed that the experiment which he (Mr. Monsell) had made had succeeded, but it would not have been a success except for the remarkable ability and zeal of the heads of departments at Woolwich.
§ MR. ALDERMAN ROSE
said, he could not agree with the hon. Member for Rochdale—he thought it would be extremely bad policy for the Government to throw itself unreservedly into the hands of contractors. In the matter of guns the Government had of late years become their own manufacturers, and by that means we had obtained what was for the time the best weapon in the world. He was intimately acquainted with the commander of the Buffs in China, and that officer had told him that a number of Frenchmen had at one time got into a position of considerable difficulty, that he had offered to dislodge the enemy, that the French officers had treated that as an impossibility in consequence of the distance which separated the two forces, but that he had brought the Armstrong gun into play, and to the astonishment of our gallant Allies had completely succeeded in that object. When the Crimean war broke out there were miles of Low Moor iron guns in store at Woolwich. That gun, however, was found so defective and unsuited to the wants of modern science that the Armstrong gun was produced. The latter gun was so great an improvement that the Government did quite right to purchase the pa- 1943 tent, and to manufacture it for themselves. He (Mr. Alderman Rose) thought that great advantages had accrued to this country by the manufacture of the Enfield rifle in the Government factories. The hon. Member for Rochdale said the small arms ought to be manufactured at Birmingham, where a musket used to go through twelve different hands. But there was a great advantage in completing all the parts of the process under the same roof, and to have the manufacture under control, so that the Government might produce any number they required. He thought that the amount saved by the Enfield factory had not been fairly and candidly represented by the hon. Member. Then it was said that the Government ought to depend upon private dockyards for building the ships they wanted. They did depend upon private yards for the gunboats required during the Russian war. He believed that the Admiralty required impossible conditions from the private builders. He was credibly informed that when they were applied to to send in contracts for the gunboats they frankly replied that the timber specified in the conditions did not exist—that it must be got through Russia. They were nevertheless told to send in their contracts, and to do the best they could, and the authorities would "carry them through." He believed the officers had not the candour to explain these circumstances when complaints were made that the gunboats were built of unseasoned timber, and not otherwise according to contract. It was extremely desirable that we should not be wholly dependent on private contractors; and we were manifestly in an improved position when we could ascertain by practical experience the cost of every article we required. The result of the Crimean war was to produce a strong opinion in the minds of some people, and apparently in that of the hon. Member for Rochdale among others, that war could be carried on by contract. In his opinion that was altogether an erroneous idea, because in war you had not the conditions which existed in time of peace. A Government to carry on war with effect ought to be self-supporting, self-sustaining, and self-reliant. As a means of checking and controlling expenditure, the contract system was of great value, but it was not desirable that the Government should become entirely buyers instead of manufacturers.
said, he believed the lucid and admirable speech of the hon. Member 1944 for Rochdale would sink deep into the minds of the people, and by its delivery he had added to the debt of gratitude which the country already owed him. His hon. Friend had confined himself principally to the economical view of the question. He (Mr. White) should address himself to its moral and political view. He gave his most unqualified adhesion to the principles which his hon. Friend had laid down as to unrestricted competition. He regarded the existence of manufacturing establishments of such magnitude as those which the Government now possessed as a positive anachronism, and a contradiction of those principles of unrestricted competition of which we were supposed to be the great representatives throughout the world. Great as was the wastefulness of this system, it was but trifling compared with the political and moral evils resulting from it. Our bureaucratic system created an accumulation of discontented officials—for where could you find an official who was not discontented? That House was continually pestered, vexed, and besieged by the petitions of Government officials. Make a man a Government servant and you made him a discontented man for the rest of his life; and yet these places were such objects of ambition that people were always to be found struggling for what they thought the euthanasia of a Government employment. It was the duty of honest statesmanship to eradicate this growing bad principle from the minds of the people. In the year 1780 Mr. Dunning moved his memorable Resolution as to the growing influence of the Crown; but since then the public establishments and the number of Government servants had greatly increased. He was old-fashioned enough to look with great distrust and jealousy upon any augmentation of the power of the Executive by the multiplication of offices and the increase of their patronage. In the year 1822 the number of employés in the Civil Service was 18,500; in 1862 it was 43,163. During the 40 years which elapsed between those dates, the population of the country had increased at the rate of only 40 per cent, while the increase in the number of civil servants had been at the rate of 120 per cent. During the last 10 years the population increased 10 per cent and the civil servants 20 per cent. When we looked at the increase in connection with our army and navy, and the number of Englishmen employed in the public service in India, it would be found that we had at 1945 the present time 130,000 men more engaged under Government than we had ten years ago. Now, all undue increase of the power of the Executive was attended by a proportionate diminution of the legitimate influence of the people. Our ancestors could use scarcely any term implying greater reproach to a man holding any office or situation under the Government than to call him a "placeman." Lord Brougham, he might add, remarked in a debate which took place in 1822, that he spoke the language of the Constitution when he asserted that placemen were objects of distrust; and yet the manufacturing system, which was the subject of the present discussion, produced those placemen in the largest possible degree. He, for one, was of opinion that no man would venture to say that the public money was judiciously employed or frugally expended as matters now stood, and he maintained that it was the duty of the Government to limit as far as possible the tendency to keep up over grown establishments. He hoped that next Session some such system as that suggested by the hon. Member for Rochdale would be adopted, with the object of repressing this growing evil.
wished to make a few remarks on the subject before the House, in consequence of the observations which had fallen from the hon. Member for Rochdale with reference to the course taken by the Government of Lord Derby in the construction of wooden ships of the line and frigates. The House should bear in mind the state of the question as regarded iron-plated ships at that time. When the Government of Lord Derby succeeded to office not a single armour-plated ship had ever been tried. A vessel of that description—La Gloire—was being built in France, but she was the only one at the time even in contemplation. It was true that some iron floating batteries had been constructed during the Crimean war, and we followed the example, and sent two of these vessels to the Block Sea. Their performances, however, were unsatisfactory. So far, therefore, as practical experience went, the Government of Lord Derby had then no encouragement to embark in the con struction of armour-plated ships. Under the circumstances it would, indeed, have been nothing short of insanity to enter upon their wholesale construction. At that time it would have been a jump in the dark. The Government of Lord Derby did that which was a good deal wiser— 1946 they built the Warrior, and thus made a very successful experiment; and after that the present Government built the Black Prince, the construction of which had been ordered by the Derby Government. It might be said that, as matters stood, they ought to have stayed their hands and done nothing. But what, he would ask, was the state of our navy at that time? About the period to which he was referring, a very remarkable paper appeared in the columns of The Times, extracted from an encyclopædia which was published at Leipsic, in which the writer, a German, spoke in terms of regret of the decline of the English navy, observing that France, with her enormous military power, was actually superior to us on the sea. And that was the fact. When Lord Derby's Government came into office in 1858 it was stated before a Committee called the "Treasury Committee," that France was equal to us in screw line-of-battle ships and was superior to us in frigates. Now that, it was felt, was not a safe or a satisfactory state of things for this country—for the hon. Member for Rochdale himself admits that our navy should always be superior to that of France—particularly when the aspect of our foreign relations was borne in mind; for it was the period at which the French colonels were beseeching their Emperor to allow them to appear at the Bar of the House of Commons and dictate the course of legislation which it should adopt. The Government of Lord Derby would in such a position of affairs be, in his opinion, most culpable if they had not done something, and they accordingly, by a complete and economical process of conversion, obtained a considerable force of line-of-battle ships and frigates. By that means they restored England to her proper place as a naval; Tower. The engines supplied to the ships then converted were of so admirable a description that when they became obsolete the engines would be available for armour-plated vessels. He should be glad if all our ships were armour-plated; but if now, unfortunately, we should be engaged in a; war with France, we had not a single wooden line-of-battle ship which we should not be obliged to send to sea, for it was impossible that we could with our armourplated ships defend our commerce, and we must, therefore, use the former until they were replaced by the latter. As to the question of building vessels in our dockyards or by contract, he perfectly admitted that the case was one in which the 1947 introduction of iron made a very material alteration. Formerly, in the case of wooden ships, the worst thing that could be done was to build them by contract; but it was a question whether iron ships could not be built as well and cheaper by contract. Many years ago, when he held office under the late Sir Robert Peel, he found that the cost of a line-of-battle ship built in the dockyards, the average age of each vessel being taken at 25 years, was £70,000 for building, and £40,000 for repairs in 25 years; whereas the contract vessels cost £55,000 for building and £59,000 for repairs in 12 instead of 25 years; so that the latter cost £114,000 in 12 years, while the former cost only £110,000 for more than twice that time. He must also express his belief that the work done in the dockyards was, as a general rule, better executed than that done by contract, and therefore contract-built ships were not necessarily cheaper than dockyard ships. He hoped, however, to see the contract system with regard to iron ships extended. With regard to our naval guns, he must say that the Admiralty did not appear to be fortunate in that respect, and he trusted they would dining the recess give their earnest attention to ascertaining the best mode of arming our ships of war. He agreed with the hon. and gallant Member for Wakefield (Sir John Hay), that the kind of gun required was a 12½ton gun, which would fire either round shot or the rifled elongated shot.
§ MR. CHILDERS
said, he thought the House was much indebted to the hon. Member for Rochdale for the clearness with which he had brought his views on this subject before the House. For himself, having been barely three months in office, it would be presumptuous in him to give a decided opinion either one way or the other on so important and interesting a question, and his only object in rising was to submit a few facts and considerations to the House by way of suggestion to guide them in their decision on it. In regard to the manufacturing establishments in the dockyards, the hon. Member for Rochdale seemed to lay down the principle that we ought to repair and not to manufacture—that we ought to do with regard to the hulls of our ships what since the Committee of 1848 had been the rule with marine engines—purchase them new from private makers, and only repair them. Before coming to a conclusion on that point it would be well to see what actually was 1948 purchased from the private trade and what was manufactured in the dockyards. As a rule our ships were manufactured in the dockyards, and the Government put on board of them all articles necessary for their equipment; but in coming to look more nearly into the matter and considering what articles were manufactured in the dockyards and what purchased, it would be seen that there was a great distinction to be drawn which made the matter not quite so simple as the hon. Member had represented it. Our wooden ships, with very few exceptions, had all been built in the dockyards; but coming to the present state of things, when we were building armour-ships, it would be seen that there was a great limitation to building in the dockyards. Beginning with the Warrior, there were now either built or building twenty-five armour-ships, of which twelve were iron and thirteen were wooden ships plated. Out of twelve iron ships ten had been constructed in private yards, and only two in the Government dockyards. The wooden ships, plated with armour, had been built in the dockyards; but nearly all of them were originally wooden line-of-battle ships which had been converted. In the Government dockyards we manufactured wooden masts, sails, ropes, boats, copper sheathing, capstans, mixed metal articles, bolts, lead pipes, a few boilers for engines, and a few propellers. For the iron ships, on the other hand, the whole of the armour-plates were purchased from the private trade. Iron masts, iron beams, wire rigging, large pieces almost exclusively, anchors, chain cables, all heavy forgings, and all engines and boilers for new ships were manufactured by the private trade. So that at present with regard to a large part of the fittings of these ships they were purchased from the private trade. What had led to this diversity of practice? The hon. Member for Rochdale laid it down as a sort of canon that nothing which could be bought in an open competitive market should be manufactured in the dockyards. But the soundness of the rule was open to great doubt; and he did not think that any such general rule could be laid down decisively. The Government might have several firms willing to supply them with the articles they required; but, on the other hand, if the Government was the only purchaser of those articles, would they be quite sure of getting fair play, and would they derive all the advantages of competition? There 1949 was also another consideration. The lives of the crews, and even, it might he, the vital interests of the country might, under certain circumstances, depend on the efficiency of the component parts of one of Her Majesty's ships, and in view of such a contingency the mere consideration of expense sunk into nothing. Therefore to the hon. Gentleman's rule must be added these exceptions—that the Government should not be the only purchaser of the articles, and their quality must be such as to stand some test which would not destroy them. The further exception must be made, that we ought to manufacture such articles as could not readily be supplied in time of war. The question of comparative cost was, no doubt, important; but with respect to the manufacture of the hulls of armoured ships there did not exist up to the present time fair means of com parison. There were now five iron ships afloat armour-clad on the principle of the Warrior and the Black Prince, all of which had been purchased from private yards; and the only ship of the kind which the Government was building, the Achilles, was not yet finished. There was not, therefore, as yet a sufficient basis on which to calculate the relative cost, Respecting the wooden ships, iron-plated, no fair comparison could be instituted. The nearest approach to a comparison possible to be made was between the iron-armoured ship the Hector, built in a private yard, and the wooden converted ships, the Royal Oak and Prince Consort. The Hector, of 4,089 tons, cost £286,718; the Royal Oak, 4,056 tons, and the Prince Consort, 4,045 tons, cost respectively £259,658, and £249,064. But there could be no conclusive comparisons until they had ships in the same condition built in the Government and in the private yards. There was another serious question, and that was as regards the time occupied in construction, and, as far as that went, the evidence was in favour of the Government dockyards. Of the iron ships at present incomplete, the Valiant was to have been completed in March, 1863, but she was not yet finished. The Prince Albert was to have been completed in June, 1863, but she was not yet delivered. The Minotaur and Agincourt were also incomplete at the appointed time. He did not mean to say that the contractors were to blame for the delay, and it might be turned to account by enabling us to take advantage of the latest improvements. He wished to call the attention of 1950 the House to the experience that might be derived elsewhere. There was no country like England for the ample supply of iron, for cheapness of labour, and for other circumstances facilitating the construction of ships; but, at the same time, it must be admitted that the United States with respect to wooden vessels were ahead of this country, and before the year the English commercial marine was being gradually driven out of the field by the effective competition of American ships. Consequently, American experience could not altogether be set aside in respect to the building of ships in public and in private yards. The following were extracts from a Report of the Secretary to the Navy in the United States, dated December, 1863:—In order that we may have at our command a navy which shall fulfil these unexampled and exacting conditions of efficiency, a commensurate public establishment for its construction and preparation is indispensable. A navy yard on a large scale, and in many respects of a new plan, amply furnished with all the proper facilities and aids for its operations, where machinery for steamers can be manufactured, iron vessels constructed, iron armature made and tested, and repairs of every description executed, is an absolute necessity. In view of these facts I had the honour on successive occasions to urge this matter upon the attention of the last Congress, and the omission of that body to take even the preliminary measures towards the procurement and formation of such an establishment is a misfortune which the country is now made to feel. The limited facilities for manufacturing and repairing steam machinery at the public navy yards render them totally inadequate to meet a moiety of the demands upon them. Even with the aid of private establishments, no inconsiderable portion of our naval force is waiting, unemployed, and detained from active service to the injury of the country. Proposals were issued for an iron-clad ship of the largest class (under the authority contained in the Appropriation Bills), but the cost, as shown by the propositions received for a ship of the necessary magnitude, was so great that it was deemed advisable to enter into no contract involving so large an expenditure, except by the express sanction of Congress. There are no parties in this country fully prepared to build iron vessels of the magnitude and description proposed, and the present high prices of material and labour unavoidably enhanced the cost. The Government itself is unprepared to execute any such work, having no suitable yard and establishment, and is consequently wholly in the hands of private parties to demand what they think proper, and prescribe their own terms. On former and repeated occasions, and elsewhere in this Report, the Department has fully expressed its opinion of this policy, and the necessity why the Government should be prepared to build iron vessels and the necessary machinery of the largest class. Prompt and judicious action by the legislative branch of the Government upon this subject is, in my judgment, urgently needed, and will, when it shall have been 1951 had, be carried into effect by this Department with all possible activity.Then came another Report from the Secretary to the American Navy, dated May, 1864, which was even stronger than that to which he had just referred. That functionary stated—I subjoin a schedule of iron-clad gunboats of light draught in the process of construction, which, in anticipation of the state of things which now exists, were designed for service in the sounds and rivers of North Carolina, and the shallow interior waters elsewhere on the coast. These boats were contracted for as soon as it was possible to do so after the necessary appropriations for their construction were made by Congress, and it will be seen by the data given that most of them were to have been completed last year—some of them as early as September. Not one has yet been delivered, and it will be some weeks before one can be made available for service. I have felt it my duty on repeated occasions to call the attention of Congress to the necessities for a yard and establishment where iron and armoured vessels could be constructed for the Government, but the preliminary steps for such an establishment have not yet beer, taken. In the meantime, the Department and the Government are wholly dependent on contractors, who, if they have the will, do not possess the ability, to furnish these vessels promptly. Conflicting local controversies in regard to the place which shall be selected and benefited by the proposed important national establishment for an iron navy, such as the present and future necessities of the Government require, have contributed to delay action on this important subject. Having in view economy as well as the public necessities, I have at no time recommended that the number of our navy-yards should be increased on the Atlantic coast, but it is my deliberate opinion that no time should be wasted in establishing at a proper place a suitable yard where iron ships can be made and repaired. We feel its necessity in the emergency which has called forth the present inquiry, and not a single contractor is able to meet his engagements, even for one of this class of small vessels. In the event of a foreign war with one or more of the principal maritime Powers our condition would be most unfortunate, with no Government establishment for the construction or repair of armoured vessels such as modern science and skill are introducing. The omission to make provision for such an establishment, on which the Government can always rely, is to be regretted. Had we such an establishment at this time, I should not have been compelled to make this exhibit of a want of light-draught armour-boats for such an exigency as that which now exists in the waters of North Carolina, nor is it probable that the exigency would have occurred.He thought that those extracts pointed to this conclusion—that in America the application of the principle embodied in the Resolution of the hon. Member for Rochdale as sound for this country had proved to be unsound as applied to that country. With respect to France, the orders given 1952 to private yards had unquestionably placed the French Government in considerable difficulty, for they were suffering from the imperfect delivery of ships. He did not wish at the present time to carry this question further; but as far as the experience of other nations was concerned, it did not point in the direction of the Resolution before the House. It did not, however, follow, that because such a course of proceeding did not suit the Americans, it would not suit this country; but he did not believe that the experience of large establishments even in this country pointed to the conclusion, that those who required a very large plant must in no case be manufacturers of that plant. In the railway world it had been found expedient for companies to undertake not only the repair but the manufacture of a considerable part of their plant. The largest Company of all, the London and North Western, manufactured their entire plant, and with perfect success. With regard to the accounts generally, he did not understand the hon. Gentleman to express any distinct disapprobation of the system. His remarks related solely to the manufacturing accounts of the War Office, for which his noble Friend the Under Secretary was ready to answer fully. As a very great improvement had recently been made in the accounts of the Admiralty it would be a pity to introduce another change until the new plan had had a fair trial. The principle which the hon. Member laid down was that before arriving at a correct statement of the cost of an article an allowance should be made for the interest on capital, depreciation of plant, and other charges which would fall on a private contractor. That was true; but the primary object of the Admiralty accounts was to exhibit the result of the cash transactions, and the introduction of these uncertain elements suggested by the hon. Member would tend to diminish their usefulness in this respect. He proposed however, during the recess, to see whether they could not, on the first day of the next financial year, take stock of their plant in the factories and manufacturing establishments; and attach to subsequent accounts statements embodying the allowances for interest on capital, wear and tear, and so on the footing of ordinary mercantile accounts. To the cost as exhibited in the rate book could then be added the increase attributable to interest, depreciation of plant, and other expenses. The House would thus be put 1953 in possession both of the cash accounts and of manufacturing accounts, based on strict commercial principles. More than this he was not now prepared to undertake, but he need hardly say that his inclination was to put the business accounts of the transactions on the Admiralty on the same footing as other business, so far as it could be done without producing fallacious impressions.
said, he had never hesitated to express his opinion of the impropriety of carrying the Government manufacturing establishments to their present extent. At the same time he thought that they should be maintained to such an extent that the Government would not be altogether dependent upon private enter prize when any emergency should occur. The whole weight of the argument seemed to be to him on the side of the hon. Member for Rochdale. His hon. Friend had instituted a comparison between the cost of constructing ships in the Government yards and by private contract, and nobody could say that he had overstated his case; and he had also shown that the present system of keeping the accounts was a perfect absurdity. What, then, must the case have been when there was hardly any reckoning at all. His hon. Colleague (Mr. Monsell) had given as a reason for not depending altogether on private manufacturers, that when shells were wanted during the Crimean war the contractors took advantage of the necessity of the occasion by increasing largely their price; but that was not the fault of the contractors—it was the natural consequence of the principle of supply and demand. If a war were to break out to-morrow the Government would be compelled to increase the wages of even their own dockyard labourers, as well as to pay an increased price for the materials. The hon. Member for Pontefract (Mr. Childers), in his defence of the Admiralty, quoted the Report of the Secretary of the United States Navy in support of his views; but it should be recollected that it was the interest of all Government officials to favour their own institutions—and, moreover, the circumstances of the United States were peculiar owing to the suddenness of the emergency, so that he (Colonel Dickson) thought that that part of the hon. Gentleman's arguments fell to the ground. Turning to the clothing establishment at Pimlico, to which he had devoted considerable attention, he found that it had increased to a greater extent 1954 than could be readily conceived. Between the years 1858–9 and 1862–3 there had been spent in repairs and buildings £51,892, and for machinery £4,859. The amount paid as wages for labour in that establishment was upwards of £44,000, and for superintendence the charge was £15,000, or nearly 35 per cent. At the clothing establishment at Woolwich exactly the same rate of increase was going on It might be said by the noble Lord (the Marquess of Hartington) that the army was better clothed now than before these establishments were set up. Well, nothing could be worse than the clothing was previously; but they must not attribute the improvement of the article to these establishments. They must attribute it to the fact that the eyes of the country were opened by the Crimean war, and that the public began to care for that army of whose existence they seemed before almost entirely ignorant, or, at all events, to care but little. Then the noble Lord said that the clothing was cheaper. But that was owing to the decreased price of cloth. When the red drummers' cloth was first introduced into the army its cost was over 9s. per yard; but, according to the last contract, the price was only 6s. 6d., so that the diminution of cost must be attributed to the enterprize of the manufacturers. He gave the officers who conducted these establishments credit for zeal and a desire to render them efficient; but they could not expect matters to be carried on on strictly mercantile principles when they were directed by officers who had no mercantile experience. He maintained that the system would be much better carried on if they trusted in a great measure to private contract. On a former occasion he was assured by the late lamented Sir George Lewis, that it was not intended thus to swallow up all the army clothing in these establishments, and that it was intended to give out the trousers to private contract; but, up to this time, the only articles not manufactured there were the tunics for fifty battalions. His right hon. Friend (Mr. Corry) said that ships could be better built in the public dockyards than in the private yards; but his own opinion was that some of the finest ships they had seen had come out of private yards; and he instanced the Himalaya. He thought these Government manufacturing establishments were carried on to an absurd extent—that they ought to have for greater recourse to private en- 1955 terprize—that the system of accounts particularly required revision, and that the enormous waste and extravagance which had taken place lately was highly culpable and reflected very much upon themselves, He would support the Motion of the hon. Member for Rochdale.
THE MARQUESS OF HARTINGTON
I shall detain the House for only a short time; but I feel bound to make a few observations in consequence of the hon. Member who brought forward the subject having alluded to me somewhat personally in connection with the question. It seems to me that the hon. Member has selected a rather extraordinary period for bringing this subject under the notice of the House. He has had on the paper for a long time the notice of his intention to call the attention of the House to the great extension of our manufacturing departments. I think his notice points to "recent" great extension in these departments; but I believe that, on reference to the Estimates and accounts for the last ten years, it will appear that this year we have spent less for buildings and machinery, or any extension of these establishments, than in any other year of that period. The hon. Member sat still while the Government were largely increasing their buildings and machinery, and it is only when they have reached a limit which it is not contemplated by any one to extend, he calls attention to the fact that our manufacturing departments have extended. What the hon. Member proposes to do I can scarcely discover. In order to make a primâ facie case he was obliged to fall back on the assertion that the Government were not only bad manufacturers, but had been driven to manufacture because they were such bad buyers. I cannot but think he did not support that assertion by any distinct proof. He brought forward two cases, one of them that of small arms; but he did not at all enter into the question whether the inability of the Government to buy on favourable terms was owing to an inherent defect in their arrangements, or to the fact that there must always be great difficulties in the way of Government purchasing on good terms which do not exist in the case of purchases by private individuals or private companies. It is the disposition of contractors—and I do not mean to say they are worse than other people—to supply articles cheap rather than good; and I do not see how it is possible to guard the interests of the public, and the lives of 1956 our soldiers and sailors, which may very often depend upon the excellence of the articles supplied to them, except by a minute and rigid inspection of the articles contracted for. It is to that close and rigid inspection, I believe, the contractors object. At the conclusion of the war it was alleged that the contractors were harassed and vexed by needless requirements on the part of the heads of departments; that, owing to their ignorance of business and their want of commercial habits, they worried the contractors by all sorts of needless objections. As far as the Government could, they removed that source of complaint. They did what the hon. Member seems to suggest. They secured the services of a gentleman known for the integrity of his character, and also for acquaintance with commercial matters; and I can assure the House the system which prevails in the departments is not an old one, but a new one. There is now an Inspector of Contracts, whose duty it is to see that the contractors are dealt with in a commercial manner, and not harassed by a vexatious and too stringent inspection. It is possible that still further improvement may be made in that direction; but still I say that I cannot Bee how the interests of the public are to be protected without a minute and stringent examination of the articles supplied by contract. The right hon. Gentleman the Member for Limerick (Mr. Monsell) answered very satisfactorily all that part of the statement of the hon. Member for Rochdale which referred to the great extension of our laboratory during the time of war. It is all very well for hon. Members to say, that during the last few years the manufacturing resources of the country generally have so extended that private manufacturers must be capable of supplying the Government with whatever they may require; but there are facts to prove the reverse. At the time the war in the Crimea was going on there was hardly a sufficiency of warlike stores in the arsenals, and the Government called for contracts for all the warlike materials they wanted, totally regardless of price. They were perfectly willing to pay any price the contractors might demand; yet those stores which were absolutely required could not be got. The hon. Gentleman referred to shells which he said had never been fired. The right hon. Gentleman the Member for Limerick has shown that to be a mistake; but supposing it were not, what would it prove? 1957 The war might have continued and extended; and if that had happened, would it not have been a matter of the last importance to have our army well supplied with ammunition? As to the extension of the laboratory at Woolwich, without now going into the cost of it, I must say that was a work of absolute and positive necessity. It was a matter of absolute necessity to erect these buildings and purchase that machinery, because the articles were wanted and could not be got in any other manner. The right hon. Member for Limerick has, I think, successfully defended the establishment of the gun factory at Woolwich. A good deal has been said with respect to the Armstrong guns; but I cannot see how the mere fact of possessing a Government manufactory renders us answerable for any failure in those guns. The hon. Member for Rochdale says the proper course would have been to invite Sir William Armstrong, Mr. Whitworth, Captain Blakeley, and other inventors, to make guns and supply them to the Government; but if that had been done the Government must have been prepared to take any description of guns which might have been sent in. The hon. Member admits that he is not acquainted with military affairs; but he must be aware that it is essential that the armament of the country should be of a uniform description, and not an armament consisting partly of Armstrong guns, partly of Whitworth guns, partly of Westley Richards' guns, and partly of Captain Blakeley's. The hon. Member seems to think that the Armstrong guns I have proved a failure; but if that was the case, which I do not at all admit, it would not be the system of having manufacturing departments that would be answerable for it. The hon. Gentleman says it was a great mistake to subsidize the Elswick Works, and he pointed to the fact that Sir William Armstrong, who had been connected with those works, became the superintendent of the factory. I am not here to say whether that was a good arrangement or not; but, again, it has nothing to do with the system of having manufacturing departments. Of course it was competent for the Government, having decided that they would adopt the Armstrong gun, to ask for tenders for making it; but the hon. Member is mistaken if he supposes that tenders in such a case would have come in in any number. What was the case with regard to the old cast-iron guns? In the face of open competition there were 1958 only two, or at the most three, manufacturers who ever supplied cast-iron guns to the Government at all. That was not on account of the prejudices of the Government, but simply because only two or three firms thought it worth while to go to the necessary expense of obtaining the right sort of iron. In the case of the Elswick Company we must either have guaranteed the repayment of a certain portion of the expenditure in plant, or we must have ordered from the Company such a supply of guns as would have repaid them for their first outlay. It is not unimportant that from the first day that the manufacture of the Armstrong gun was commenced, Sir William Armstrong and others engaged in the manufacture have been constantly improving it; but if we had entered into a large contract we should have been obliged either to content ourselves with guns according to the first sample, or to pay the Company an enormous sum in the shape of compensation. I will not enter at any length into the case of the Enfield Factory, but I have referred to the debates [see v. 144] which took place at the time that factory was established, and I find that the only persons who objected to it were the hon. Member for Warwickshire (Mr. Newdegate) and the late hon. Member for Birmingham (Mr. G. P. Muutz). Of course the reasons which induced those Gentlemen to oppose the erection of the Enfield Factory are obvious. The hon. Member for Rochdale says, the reason we did not get rifles as rapidly from Birmingham as we wanted was that the Government had such an absurd way of contracting for them. He says they contracted for each portion of the arm separately, and that great delay arose in putting them together. But that was not a system invented by the Government; on the contrary, it is the system in use in Birmingham now, and in every other place where firearms are manufactured. Indeed, it is absolutely necessary, if the Government is to exercise an efficient inspection over the rifles supplied to the troops, that that inspection should be made before the rifle is finished, and should take place in every stage of the construction of the weapon, The Birmingham trade was asked to supply rifles; but it did not supply anything like the number required, and papers which have been laid upon the table will show how very far short of those promises the performances of the trade were. It is sometimes said that the Government are behind the trade in introducing im- 1959 provements into machinery; but it was the Government and not the trade who brought over the improvements from America. The Government, having determined to establish a factory, sent over inspectors to America, who brought back the machinery, and this having been put up at Enfield, was soon copied by the trade at London and Birmingham. There is one establishment which has found no friend in the course of this debate, and that was the clothing factory at Pimlico. The hon. Gentleman who last spoke seems to have taken all the expenses of that establishment, and put them down as the expenses incurred in working the factory. That is not so, as a great part of the expenses is not incurred for the factory, but for the establishment at Pimlico for the inspection and storing of clothing. When we gave up the system of clothing the army through the agency of the colonels of regiments, it became necessary that we should obtain a supply by contract or else manufacture ourselves. If we get them by contract we must have some place to store them in, and some efficient establishment in which they could be inspected, and a large portion of the expenses set down for the Pimlico factory is chargeable to the Pimlico clothing establishment as a whole. It has been said that the price of clothing has been reduced since the establishment of the factory. That is quite true; and it is erroneous to attribute that to the decrease in the price of cloth. In 1859 there were three contractors who made infantry tunics, and the average price was £10s. 8d. the price of cloth being 7s. 10d. a yard. In 1862 the price of a tunic was 16s. 6d., the price of cloth being 7s. per yard. Therefore, allowing for the diminution in the price of cloth the contractor's price was 3s. less in 1862 than in 1859. The Pimlico factory was not established without a full inquiry and due deliberation. With regard to the Woolwich factory, I may remind the House that the Commission appointed to inquire into the system of contracts and of providing stores for the army, reported, in reference to Woolwich, that the establishment was well adapted for clothing the soldiers well, expeditiously, and economically; but they gave no opinion whether it was cheaper or not. That experiment was so far satisfactory that I am not surprised it was extended and the factory at Pimlico established. I do not say that an equal necessity exists for the Government manufac- 1960 turing army clothing as for its manufacturing war materials. It is not likely that such an extension of the supply will be required in the case of clothing as in the case of war materials; but I nevertheless believe that the system now pursued of manufacturing part and allowing the remainder to be provided by contract is the best which can be adopted. At Pimlico clothing is made for forty battalions of the line, and shell jackets and trousers for the rest. The contractors still make the clothing of fifty-three battalions, besides all the clothing for the Post Office officials, for the Metropolitan Police, and others, which, however, is passed through the army establishment to be inspected. There is only one contractor for the clothing still existing, and I believe he is a constituent of the right hon. Member for Limerick. He has succeeded in driving every other contractor out of the field, and it seems to me that if we were to relinquish our manufactory we should be left entirely in I the power of this one contractor, or one or two others. The balance-sheet with my name attached to it, to which the hon. Member has referred, was not prepared with the view of making an accurate comparison between the prices of articles made by the Government and the price of those supplied by contract. The object of that balance-sheet, on which much time and I trouble have been bestowed, is to give the House, as well as we can, an accurate account of what the work done at the; establishment was, and it certainly was not designed in the first instance for the purpose of comparison with the articles made by contract. The form of account which the hon. Member wishes us to render would, I think, be purely fictitious, and, if I adopted, I feel sure that he would be the first to accuse us of something like cooking accounts. He desires that we should make a charge against our establishments for; rates and taxes. We do not pay rates; and taxes, and therefore the charge for them would be merely imaginary. The hon. Member also wants us to fix a charge for the value of the land. But the land at Woolwich when bought by the Government was almost valueless, and its present value is very much to be attributed to the works we have erected upon it. What the accounts therefore aim at showing, and do show, is the actual expenses incurred; they show accurately and fairly what the cost to the country of an article is when once we have erected the buildings 1961 and bought the machinery. We give the House all the information we are able to give, We state what sum has been expended in past years upon buildings and machinery. Hon. Members can draw their own deductions from the accounts and put such a further percentage on the price of the articles we manufacture as they may think proper, but I do not see how we could present the account truthfully in a different form. The hon. Member took great exception to the Enfield balance-sheet with respect to the price which certain articles would have cost if obtained from the trade. Now, great pressure has been placed upon the Government during the last year or two from the gun trade for extensive orders to be given to them; yet surely when we have got the Enfield manufactory, and the House has voted the money for the buildings and plant, it becomes the duty of the Government to see in what way by the outlay of the money they can get at the cheapest rate the articles they require. And I say that the account presented by Colonel Dickson gives an accurate comparison for the purpose for which it was intended. That officer says that if you give him so much money he will produce so many rifles, and that if the same quantity had been supplied by the trade it would have cost so much more, including the expense of proving. The saving between the two sums stated appears to me to be the actual saving to the country, now that it has gone to the expense of erecting factories and purchasing machinery. It is quite another question whether it was economical to establish the factories in the first instance; but for the purpose for which the account is placed before the House it is perfectly correct. There was a great deal of discussion before the Ordnance Committee last year as to the system of accounts. I cannot pretend to speak with authority as to whether the system now pursued is the best that could be adopted; but I will say that no one is more anxious than the War Department is to have the accounts kept in as sound and accurate a form as possible, and to have them so laid before the House. The hon. Gentleman says he has no faith in appointing Select Committees on this matter; but surely on a point like this, which does not involve a principle, but only the simplest and most known commercial axioms, some practical men of business might with advantage inquire into the system on which these accounts are kept, and might present a report that would be 1962 useful to the House as indicating whether these accounts are to be trusted or not. Every one connected with the establishments, and all the accountants who have been sent to Woolwich to investigate the system, give their opinion that the system is correct. Would it not, therefore, be better for the hon. Member to institute inquiry by commercial and practical men, rather than upon his own mere authority to say the accounts are not worth anything whatever? I am glad, Sir, that this question has been brought forward, because it has given rise to a most interesting and useful discussion. I think that the long and painful investigations which have preceded the speech of the hon. Member for Rochdale have not been of more value to any other Gentleman in this House than to the hon. Member himself. I recollect an occasion when the hon. Gentleman spoke in very sweeping terms indeed of the waste and extravagance with which all the Government manufactories were conducted, and when he said that any practical man would tell you that at least one-half the money spent upon them was wasted. He has confessed, at least, in the case of the factory at Enfield, that he believes it has been worked at a profit; and I do not think that in any other case he has proved or attempted to prove the assertion which he then made, that at least one-half the money expended in these factories is wasted. If the money is so wasted it must be by the mismanagement of the factories, and he has not pointed out the mismanagement. The Government factories have the advantage of working upon a large scale; they have the advantage of a constant demand; they have not to make a contractors' profit; and, if they do not, they ought to produce the cheaper of the two. I believe they do supply us at a cheaper rate than the contractors. At all events, I do not think anything has been said to-night which proves that they do not do so. And instead of such a Resolution as all must have anticipated from the hon. Member—namely, one of sweeping condemnation against all the Government factories, the hon. Gentleman has contented himself with laying on the table a Motion which, if it had been made, would only have amounted to a recommendation for the adoption of a somewhat modified system of accounts.
§ MR. CHILDERS
explained that what he had said was that in laying down a rule as to purchasing or manufacturing, one element for consideration was whether the Government was the only customer.
§ SIR MORTON PETO
said, he should content himself with referring to that portion of the Resolution of the hon. Member for Rochdale, on which the hon. Member had himself more lightly touched. The right hon. Member for Limerick (Mr. Monsell) had stated that the charge for shells and other missiles at the breaking out of the Crimean war entirely justified the erection of the extensive works at Woolwich. What were really the facts? That the orders so suddenly given to the contractors in that emergency compelled them to go to largely increased expense. Taking, for instance, the Low Moor Company, he could prove that in order to execute the commissions for the Government the Company had to erect extensive buildings, and when the Government orders ceased those buildings became useless, and actually the land and buildings had been presented to the town, and baths and washhouses had since been erected on the site. A sudden pressure of that kind, which demanded extra exertions, had a corresponding effect upon prices; but it did not justify the allegation that the new factory for shells had been a great success in an economical point of view. The noble Lord who had just spoken (the Marquess of Hartington) had put forth as a justification for Government establishments that rigid inspection was absolutely necessary. It was true that rigid inspection should be exercised over all articles of Government consumption; but that was equally true whether the articles were manufactured by Government or simply sold to them. The noble Lord had referred to the Armstrong contract as proving that the Government might sometimes be properly its own manufacturers; but the Government had ultimately paid Sir William Armstrong £65,000 to be quit of their engagement, while Sir William Armstrong was set free to make guns for all the world. This was done after the Government had spent between£2,000,000 and £3,000,000, and he believed they would now willingly get rid of the stock they had on hand in consequence of that contract. With respect to the accounts, he thought his hon. Friend the Member for Rochdale was right, for the accounts rendered from Enfield were no accounts at all; they were a mere insult to the common sense of the House. Then, with regard to iron-plated ships, if, as had been said by his hon. Friend (Mr. Childers), five-sixths of the iron armour-plated ships had been supplied from private yards, 1964 it was hardly possible to understand the large expenditure in our dockyards during the last year or two. Then it was said that it could not be safe to rely upon private yards for ships in time of war when the Government would be the only purchaser. For himself he had no personal interest in the matter, but he was enabled to state that there was one private yard producing a larger amount of work for Foreign Governments, and for our own Government, than was turned out in all the Government dockyards, and from all the private yards in which work was done for them. Thus, the Government was not placed in the position of being the only purchaser.
§ MR. CHILDERS
said, what he referred to was that a great consideration was that the Government was the best customer.
§ SIR MORTON PETO
said, he accepted the explanation, but what he wished to show was, that if the Government were steady customers they would always be supplied with what they wanted at the cheapest rate, but that if they applied to the trade only in time of war, they could not be cheaply supplied. With respect to the accounts of ships, he agreed with his hon. Friend that it was very difficult to institute a comparison between them. Out of the twenty-three ships ordered by the Government, he believed eighteen were different in size and structure. But as all early efforts were mainly experimental, it would be unfair to make a rigid comparison of cost. As a test of the capabilities of the private yards, he might refer to the magnificent yacht recently built for the Sultan of Turkey by a private firm, and to her Majesty's yacht, built in a Government yard, the one being universally admired, the other universally condemned. He trusted that the House would allow him to refer to private affairs for a few moments, in order to afford information. The amount of labour and material employed in all the Government dockyards was nothing like half as much as were employed by his own firm; and the firm so kept their accounts that in reference to each contract the capital charge was taken into account, and the cost of every article used in each particular contract was known on the termination of the work, and the exact cost of every item in the contract clearly shown. Until the Government furnished similar accounts they would not fulfil their duty. What was wanted was a debtor and cre- 1965 ditor account for each particular yard, showing what each yard cost and produced; for then they would be able to see which yard manufactured the cheapest, and whether the public would supply them better. He must Bay that since the noble Lord (Lord Clarence Paget) had been at the Admiralty they had had more information than they had before; but still the 600 pages of information and the labour charts were not accounts in the proper sense of the word. Nothing could deserve the name of an account which did not include the cost of depreciations, of superintendence, of lighting, &c. At present, in our seven dockyards there were 227 separate establishments. Each had its separate superintendent, its inspector, sub-inspectors, timekeepers, and all the paraphernalia of a great establishment. He was not clear whether we were not carrying the separation of various establishments too far. For instance, they were told with respect to hemp that at Chatham the manufacture of rope could be carried on more cheaply than elsewhere. If that was the case, manufacture all you wanted at Chatham. If you could do a thing more economically at one place than another, concentrate the manufacture there; and if you found you could buy more cheaply than you could manufacture, by all means go to private establishments. He wished now to call attention to the enormous increase in our establishments during the last few years. Taking the year preceding the Crimean war, he found that the expenditure on the navy in 1852 was £5,622,000, while in 1864 it was £10,432,000, showing an increase of £4,810,000, or 83 per cent. The expense of superintendence in the dockyards was £155,000in 1852 and£230,000 in 1864, showing an increase of £75,000. In labour and wages in the dockyards the expenditure in 1852 was £702,000, and in 1864 £1,344,000—an increase of £642,000, or nearly 100 per cent. Materials and stores for shipbuilding cost £782,000 in 1852, and £1,826,000 in 1864, which was an increase of no less than £1,044,000. The Admiralty were spending now as much upon wood as they were before iron was used, and he was very much in the condition of the noble Lord before he became Secretary of the Admiralty—he could not make out what became of the money. In 1852 the number of salaried persons employed in superintending the yards was 431; in 1864 it was 522. In 1852 the number of workmen employed in the dockyards and fac- 1966 tories was 10,757, while in 1864 there were 19,419, an increase of 8,662. Now if the Admiralty were putting out so many iron ships to be built by private contract, what were all these men about? As far as he could make out from the accounts, about 26 per cent of this labour was devoted to converting timber and to manufacturing operations in the workshops; and it was therefore of great importance that the House should be able to see from the accounts whether the Government manufactured more cheaply than they could buy, As to the smaller dockyards, it was the practice of men of business to concentrate as much as possible—the fewer their establishments the more economically they could be conducted; and in the same way, if the Admiralty had seven dockyards, when they could do all that they wanted in three or four, looking, moreover, to the enormous sums spent in protecting these establishments, it would be exceedingly desirable to sell the small dockyards. The great thing for the Government to achieve was not to go on spending money in the dark. The Admiralty had probably tried to do their best with the accounts, but they were not accounts at all in the eyes of commercial men, and he hoped that next year such accounts would be presented as commercial men would understand and appreciate.
If I am called upon for my opinion upon the Resolution of the hon. Member for Rochdale, I must express entire agreement with that portion of it which demands that full and satisfactory accounts should be laid annually before the House. This is only what I promised to do when I was in office, and what I fully proposed doing had I remained in office. When, however, the hon. Gentleman says that he has read attentively the evidence given before the Committee, and professes to describe what took place there, I can only say that, if he had not told us he had read the evidence attentively, I could not possibly have believed it. The description he has given of the introduction of the Armstrong gun into the service is quite contrary to the clear statement made before the Committee, and quite contrary to the explanations which I have made in this House so frequently that I am ashamed of repeating them. In 1858, when I came into office, we were the only country in the world that had not got a rifled gun. I at once appointed a Committee to report upon the best rifled gun that was to be had—I did not care whose 1967 it was or what it was. The hon. Gentleman says the Armstrong gun was adopted because the Duke of Cambridge said this or because somebody else said that. No such thing. It was adopted because it had proved itself superior to all the other guns which were submitted to the Committee. They tried the Whitworth—they tried every gun which was before them—and they reported that the Armstrong gun was the best, limiting their approval to its use as a field gun; and I believe at the present moment that it is the best field gun in any country in the world. The hon. Gentleman said that the War Office did not know either how to build a gun or to buy one. What would be the consequence of following his advice? He says we should have tried the Whitworth, and everybody else's gun that seemed of merit. But you cannot have different guns in your service. You must make up your mind to adopt one. Then the hon. Member says, "Why did you not give Sir William Armstrong a large order for these guns?" What would have been the result of doing so? The absolute cost price of the gun which we had experimented upon was £260. If I had entered into a contract with Sir William Armstrong we should have had to pay him £260 a piece. Remember, he had a patent for his guns, and we must have dealt with him upon his own terms; we could not have gone to anybody else. Well, we did not do that. The hon. Member is wrong in saying that we paid the Elswick Company £60,000. We did not pay them one farthing. What the Company said was, "If we establish a plant for your particular service, will you pay us at the end for our outlay?" That was a fair stipulation. But instead of paying £260 for the guns we paid £170 originally, and afterwards a much smaller proportion. I wish to vindicate the Government to which I belonged in their proceedings with respect to the Armstrong gun. It is said that £2,000,000 or £3,000,000 have been spent; but all I am responsible for is the Estimate of 1858, which I brought forward. I fully approve of what my noble Friend who succeeded me in the War Office did. At that time there was no such thing as armour-plated ships. Neither armour-plated ships nor guns to pierce them were contemplated at the time. We took then the best gun that we could get, and if we had not done so what would be said except that we were behind other nations? Why, this House 1968 was always urging us on. It has been said that we are about to convert the whole of our muzzle-loading into breech-loading guns. I do not say whether that is right or not; but I do say that if we are going to do so we can effect that change much more cheaply in our own factories than anywhere else. And as for the gentlemen at the head of those manufacturing establishments, I say if they had works of their own they would earn twice as much as they receive from the Government. It is impossible to describe how efficiently they perform their duty. It has been said that a largo sum has not been spent on warlike stores last year and the year before. But why has it not been spent? Because you have not yet decided what is the best rifled gun; but the instant you come to a decision on that point you will have to lay out a large sum. Again, with reference to armour-plating, you have not yet made up your minds. But let not the House deceive itself by imagining there can be any great saving effected in your warlike expenditure. And now a word about the establishment at Pimlico. The hon. Gentleman said that when I came into office it was necessary to change the system. The clothing is done partly by contract and partly by yourselves. But you must have a large establishment at Pimlico even for the clothing which is done by contract, because it is sent there in order to be inspected. I believe the clothing of the English army, which is done partly by contract and partly by our own manufacture, is better done than for any army in the world.
§ LORD CLARENCE PAGET
Before coming to the questions raised by the hon. Member for Finsbury (Sir Morton Peto), I wish to advert first to the subject of the Armstrong guns. Very strong opinions have been given to-night against Sir William Armstrong's breech-loaders. I have always been very frank on this subject, and I spoke of them as having been unsuccessful at Kagosima. But at the late affair in New Zealand these guns—both the 100-pounders and the 40-pounder—are reported by Sir William Wiseman, a high authority on this point inasmuch as he has commanded the Excellent, to have worked admirably. I was sorry not to have been in my place to-night when the hon. Member for Liskeard (Mr. Bernal Osborne) asked whether some of our men had not been wounded in consequence of the stripping off of the lead from the pro- 1969 jectiles? We have had no such accounts, and, as I have already said, the Report made by Sir William Wiseman is most satisfactory. The hon. Member for Fins-bury finds fault with the dockyard accounts; but he has given us credit ever since the present Government has been in office, of endeavouring to make them so clear that every one would be able to form a comparison between the cost of ships built in private yards and those built in Her Majesty's dockyards. We are told that we should endeavour to put a price upon every thing. But how are we to do that? It would be a mere imaginary valuation, and I am sure if we were to attempt anything of the kind the House would not be satisfied with it. What we do is this—and I beg the attention of the House to it—the whole cost both of material and the labour expended upon it is given separately for each dockyard; so that the very accounts which my hon. Friend asks for are given already in what are called the "labour charts" of the dockyards. I quite admit that those charts might be improved, and if my hon. Friend will come to the Admiralty and make suggestions with that view I shall be very-glad to profit by them. But if hon. Members suppose that because we have gone largely into iron ships we are at the present time about to give up wooden ships, that is not the intention of the Government. We are as desirous as any hon. Member to enlarge our iron fleet. No doubt such a fleet possesses great advantages, particularly in the heavy armour-plated ships; and we have done all in our power, and given every encouragement to inventors to come to us, in order to get rid of that most fatal defect—namely, the fouling of their bottoms, for until we have got rid of that we cannot have our cruisers, which go two or three years without ever entering a dock, built of iron. The time, therefore, has not come for suppressing the wooden fleet altogether, Hon. Members are all desirous that the business of the country should be conducted properly; but I can assure them that it is after the most serious consideration that the Admiralty have come to the conclusion that they should fail in their duty if they gave up the building of wooden ships. I will give an illustration which I have employed before. Everybody has heard of the feats of the Alabama. It is true she has shown her weakness. As a wooden ship against the heavy guns 1970 of the present day she could not last ten minutes. But for all that the Alabama has done to her enemies an immense amount of damage; but if she had been an iron ship she never could have done half of it. For many months she was away from any dock, yet she was able to catch a vast number of the ships of the enemy; but if she had been of iron she would long before have lost her speed from the foulness of her bottom. Merchant ships have a given duty to perform. They go from one part of the world to another and bring a return cargo home. They are consequently always moving. But the essential duty of a vessel of war is to lie at anchor at a particular spot; and that is the reason why these ships, not going through the water, get their bottoms foul. But if any person supposes because we are building these iron ships we are therefore about to reduce our dockyards, I cannot, without deceiving him, hold out a hope of any great reduction. If we are to retain wooden ships—and I have shown the necessity of retaining them—we must be continually employed in repairs, and at present we have great arrears to clear off. But, says my hon. Friend, I do not object to repairs, but to the large number of men that you keep in your yards. But any practical builder will agree with me that to get good mechanics for repairing you must make them acquainted with the art of shipbuilding. The ships are coming in at uncertain intervals for repairs, and when the workmen are not engaged in repairs they are employed in building. But, speaking generally, our dockyards are almost altogether employed in keeping our fleet in repair. I am extremely glad we have had this interesting discussion, and I do not doubt that we shall derive considerable benefit from the suggestions that have been made. But I protest against the supposition that the substitution of iron for wooden ships holds out a prospect of any considerable reduction in the expenses of our dockyards.
said, he agreed with almost everything that had fallen from the hon. Member for Rochdale. For the efficient defence of the country it was necessary that the interests of the mercantile community should be identified with that of the Government, so that the Government should be able in emergencies to fall back on the vast resources which it afforded. The advantage of a Government manufacturing department was simply as 1971 a check upon private contractors, but that check was eminently necessary. The Enfield manufactory was originally established during the Peninsular war, in consequence of the disgraceful frauds of the contractors, and the necessities of the Crimean war had originated there the introduction of machinery. The differences between the masters and workmen at Birmingham had hitherto prevented this great improvement in the trade, but the latter had at last followed the example of the Government, and one of the finest factories in the country had been lately built at Birmingham for the manufacture of small arms by machinery. The powder mills at Waltham Abbey had a similar origin. In 1777 the powder of the navy was so disgraceful that a Commission sent to Plymouth reported that only a few barrels were in a serviceable condition—and this in time of war. The mills at Waltham Abbey were, therefore, established; but they were never meant to be more than a check upon the contractors, and they had fully answered their purpose. The powder now supplied by contractors to Government was all that could be wished. The third manufacturing department was that for making gun carriages. An inquiry took place in 1829, when the late Lord Hardinge and the Duke of Wellington gave valuable evidence; and another inquiry took place in 1849. The result of these inquiries was that it was found absolutely necessary that gun carriages should be built under Government superintendence. It was impossible to tell by any mere test, after a gun carriage was constructed, whether it would stand the work required of it on service; yet the breaking down of a gun carriage on the march or in the field was so important as to involve sometimes the loss of an action, sometimes even of a campaign. It was, therefore, necessary that every part of a gun carriage should be made under the eye of the Government officials. The fourth department was the laboratory. The standing rule in former days with reference to these stores was to purchase of contractors, with the exception of articles not generally marketable. The establishment originally was at first small, and the whole outlay upon it did not exceed £6,000 or £7,000 a year. Then came the invention of percussion as applicable to small arms. It was found that if the Government bought percussion caps in the open market, the contractors adulterated them for the sake of making a greater profit, so that 1972 they could not be relied upon, and thenceforward they were manufactured in the laboratory. In 1847–8, improvements were made in fusees and shells, and it was found that the work required such minute accuracy that it was necessary to make them in the Government laboratory. Since the Crimean war further improvements had been made in fusees, rockets, and shells, and these were also consequently made in the laboratory. The principle having always been for the Government to enter into contracts for anything that could be bought in the open market, but to manufacture those articles for which there was no demand, and which required to be watched in the process of manufacture, it naturally followed that as the requirements in these matters increased, the work to be done in the Royal laboratory also increased. It was true also that the cost of the Government gun manufacture had increased enormously, but it was only of late years that the improvements in the art of war rendered it necessary to spend such large sums of money. When Sir William Armstrong produced his gun, there was not a manufacturer in England who could make it. Some years afterwards, Mr. Whitworth got up the Manchester Ordnance Company, and brought out a rival gun, and steel shells were now made at Sheffield; but there was still no competition in such matters to counterbalance the value of the Royal gun factory. One word in regard to the accounts of these departments, and the position of the superintendents. An artillery officer was appointed to undertake the supervision of one of these departments, just as he might be sent to take the command of a brigade. It was part of his profession, and all he had to do with the figures was to render an account to the War Office of the sums he received and the manner in which they had been expended. These officers knew nothing ex officio of the value of the plant, the amount that ought to be charged to capital, and the interest of money. Those were matters appertaining to accounts of bygone years registered at the War Office, and for the War Office to calculate.
§ MR. LAIRD
said, that having sat for two years on the Ordnance Committee, he was surprised to hear the statement of the noble Marquess (the Marquess of Hartington), because it came out before the Committee that the members of the Government were strongly of opinion that the 1973 Woolwich accounts were not reliable. He thought the hon. Member for Rochdale was correct when he said that we could not ascertain the cost of ships built in the dockyards; and unless we could do this all comparison as to the relative expense of public and private yards was fallacious. The noble Lord the Secretary of the Admiralty had declared the adherence of the department to wooden ships. One great cause of expenditure was this preference on the part of the Admiralty. As he built the first iron ship for the navy, he had much pleasure in saying that she was now twenty-four years old, and was at the present moment doing good service in the African squadron. The total amount voted for dockyards in the present Estimates, exclusive of engines and contract work, was about £3,000,000. The cost of management of the dockyards was about £134,000. The Admiralty were only building at the present moment in the dockyards six iron-cased ships, at a total estimated cost complete of £1,287,000. They were only building six wooden ships, at a cost of £107,000. There was thus a total expenditure for 1864.5 of £3,000,000, and estimating the expenditure during the coming year on iron-cased and wooden ships at £1,000,000, leaves about £2,000,000 to be accounted for, and which must go in repairs, alterations, refittings, &c. It was persevering in building wooden ships after the Governments of other countries were convinced of the superiority of iron, that caused so much waste and so large an expenditure. He believed that there would be an advantage in having fast sailing vessels like the Alabama, but he would remind the House that that vessel was totally destroyed in her action with the Kearsarge by the bursting of a single shell in her side. Had she been an iron vessel a shell would have done comparatively little damage. This showed that we should suffer some terrible disaster if we sent out wooden three-deckers to engage ships armed with the powerful artillery which was now coming into use. It would be much better to spend a million of money in graving docks upon our foreign stations, so as to enable us to dock and clean the bottoms of iron vessels. He could not go the entire length his hon. Friend the Member for Rochdale did with regard to our naval establishments. He was of opinion that it was desirable to build and repair in public yards, and also to build and repair in private yards. Both in the Committee of which 1974 he was a member and elsewhere he had always advocated the extension of the dockyards at Chatham, Portsmouth, and Plymouth. In time of war we could not do without large docks at those places, and in time of pence we suffered great loss from the want of proper dock and basin accommodation there, and the consequent necessity of fitting vessels in the stream. He believed that the Achilles, the first iron ship which the Admiralty had built, had cost the country £20,000 or £30,000 more than she would have done if she could have been fitted in a dock or basin. At the same time, he agreed with the hon. Member for Finsbury (Sir Morton Peto) in desiring the abolition of Deptford, Woolwich, and Pembroke Dockyards, which cost the country in management £40,000 a year. On the Thames there were plenty of private graving docks in which ships might be either repaired or constructed. In the Bristol Channel, at Cardiff, or Swansea, there was also good dock accommodation, and on the Mersey there were plenty of docks for the repair of ships. No man in the country could say what would be the time required to repair iron-cased ships, if damaged in action; but, at all events, it would be cheaper to send the ships where the labour was to be had than to bring the labour to them. If in time of peace both building and repairs were done in private yards, a number of firms would be accustomed to do work as it was done in the Government dockyards, and thus the resources of the country in war time would be doubled. The same rule might be adopted in regard to this matter as was acted upon in the case of the construction of engines, and only those firms might be permitted to do the work which could in time of war give the graving dock and other accommodation which would be required by the country. He hoped that the Admiralty would seriously consider the question of disposing of the three smaller yards he had mentioned, because if the £40,000 a year which they cost was capitalized, it would go far to defray the expense of making the other and more important dockyards all that we required.
§ MR. NEWDEGATE
said, he was anxious to express his thanks to the hon. Member for Rochdale for having brought forward this Motion, because it was obvious that the enormous extension of the Government establishments was gradually entailing upon the Government and the House the difficulties of monopoly. If the dis- 1975 cussion had proved nothing else it had shown that all comparisons which the Returns laid before the House which pretended to institute between the cost of arms produced at Enfield and those manufactured by the trade were fallacious, because the same elements of cost were not included in both cases. The right hon. Gentleman the Member for Limerick (Mr. Monsell) had had the audacity to allude to the circumstances that had characterized the supply of arms before and at the commencement of the Crimean war; he appeared to have forgotten that the mode in which the contracts for small arms were at that time conducted under his administration as Secretary for the Board of Ordnance was inquired into by a Committee in the year 1854, and that the result of that investigation was the breaking up of the late Ordnance establishment. For two years previous to 1854, only 22,000 small arms were ordered, a demand so limited as to have disorganized the trade; and then suddenly there was a large demand. In that year £34,000 was recommended by the Committee on Small Arms, and voted by the House for the enlargement and improvement of the Enfield establishment; but, far from being satisfied with this amount, a far larger sum, misappropriated from the Commissariat Vote, was spent upon the Enfield establishment by the Government, and yet during the war only 26,000 stand of arms were produced. Before the commencement of 1854 it was stated that the private trade could only be relied upon to make 50,000 stand of arms a year; but in less than two years it produced 272,000 stand. Those interested in the Enfield establishment were so infatuated with the belief that the natural resources of the trade of this country could not be trusted, that they sent for arms to Liege, St. Etienne, and the United States; but during the Crimean war not a single rifle was obtained from any of those places. Hon. Members appeared to discountenance the hon. Member for Rochdale's Motion, on the ground that it was impossible to rely on the arms trade of England for a supply of arms, and we had established the Enfield factory which had cost between £300,000 and £400,000. From year to year the arms trade of this country had been led on by the delusive hope that they were to be allowed to compete in the supply of their manufactures on fair terms, and Birmingham had in consequence been induced to es- 1976 tablish a large factory with all the appliances of Enfield. It would, however, appear from the tone of the debate, that it was highly probable that no order for the supply of arms would be sent to Birmingham, so that the assurances on which the expenditure there had been based would not be adequately fulfilled. He rejoiced at the same time to say that the expense to which the Birmingham Company had gone was not likely to be thrown away, for if the Government of England declined to avail themselves of the private enterprize of the country, foreign nations had not yet arrived at the conclusion that the arms provided by the trade were unworthy of use. The result might, however, be that the Government might find the English manufacturers engaged in the execution of foreign contracts at a moment when we would stand greatly in need of their services.