§ There is a large increase in that portion of the Estimates taken by the Army for the supply of Naval Ordnance for 1887–88. This is attributable to a necessary provision of ammunition for quick-firing guns, the amount being £313,429 574 575 as against £42,150* in the approved Estimate of 1886–87. This increase is mainly duo to the provision of ammunition for quick-firing guns being reduced in last year's Estimates. By the postponement of this liability from last year the Navy has been compelled to make inconvenient demands this year upon Army Estimates, it being impossible to allow a large number of guns provided to be useless for want of ammunition; a large increase in the expenditure upon Naval Ordnance, and a consequent advance in the requirements of the Navy have, in the last two years, taken place, and the naval armaments of this country now compare very favourably with those of foreign countries. Until 1880 the muzzle-loaders of the British Navy were about equal in accuracy and penetration to breech-loading guns of foreign nations. Since then the development of slow-burning powder has necessitated the production of a breech-loader different in shape from, and far superior in the high velocity it imparts to the old breech-loader. The only breech-loaders in the British Service, with the exception of a few 40 and 20-prs., are of the most modern type; the great bulk of the breech-loaders in foreign Service are of the older type, and fairly comparable to the old muzzle-loader of similar calibre.
§ The Table attached shows the yearly increase since 1886 in modern breech-loaders and quick-firing guns, and torpedoes available for service:—
| Date | B.L. Guns | 6-pr. Q.F.G. | 3-pr. Q.F.G. | Torpedoes |
| April, 1886 | 711 | 1,224 | ||
| April 1887 | 1,019 | 315 | 298 | 1,514 |
| April 1888 | 1,281 | 342 | 448 | 1,818 |
§ The question of transferring the cost of providing naval armaments from Army to Navy Votes has occupied the serious attention of both Departments during the past year. A Committee of the officers of both Departments carefully considered the bases of a transfer. Every information and assistance was given to the Admiralty by the War Office with the object of facilitating such a change So extensive a transfer involving the annual expenditure of upwards of a million and a-half of money ought not, in our opinion, to be made until the machinery for the administration and control of this outlay are so perfected at the Admiralty as to enable the assumption of this responsibility to be discharged without effect and without increased charge To place one Government Department towards another in the relation of purchaser and manufacturer is no easy matter. The proportion of establishment charges to be added to the cost of labour and material on different articles of manufacture varied from 10 to 40 per cent., according to the class of work performed. Any mistake in fixing prices between Woolwich and the Admiralty would affect all contract work done elsewhere, as Woolwich prices regulate the price of gun manufacture in this country. Further difficulties also arose in reference to the storage, issue, and testing of the stores proposed to be transferred. For these reasons we pressed upon the War Office the desirability of postponing the proposed change, until sufficient time had been afforded for the full consideration of the many complex details involved in this question.