MR. GIBSON BOWLES said he was mistaken then. He understood that those guns were not fitted for cordite powder and that they would have to make some modification of the cordite powder because it could not be used in those guns. When the Admiralty bought the ships and the guns they certainly ought to have bought the powder and the whole bag-o'tricks. The maker believed that this powder was far superior to cordite and the guns were made for it, and when under those circumstances they bought new ships and new guns using a new powder it was much better that they should buy the whole thing throughout instead of trying to modify it. Some objection had been made to the ammunition supply, and he was informed that the Admiralty were wedded to a system of ammunition supply by hand. These new guns were fitted with mechanical ammunition suppliers and that was a very great improvement, and he hoped the Admiralty were not going to interfere with it. He had made these remarks because he was convinced that they were superior to anything we possessed in our Navy. He trusted they would use the powder invented for the guns. It seemed to him that a battleship represented so much of the naval defence of any country that the acquisition of these two vessels by any other country would have altered the balance of naval power. They were equal to two divisions of an army, and therefore in times of doubt and difficulty to allow any foreign country to acquire two battleships which this country needed, was to allow a change in the relative balance of naval power which might be a source of very great danger. In March, last year, he urged His Majesty's Government to buy these vessels, and the reply he received was that they were unsuited to our requirements. That reply must necessarily be abandoned in face of the facts he had adduced in respect of the ships, otherwise the Admiralty would not have purchased them at all. Why did not the Admiralty purchase them last year? He strongly suspected there was a reason for it.

He recalled with some apprehension the accumulation of these expenses, but the Committee should know what the

to do in the way of providing for the deficit he would have to face when he came to his Budget. His idea of the way in which these ships should have been purchased was that they should have taken the place of two in the existing programme. They would not then have saddled the country with extra expense, and they would have had the advantage of having two battleships ready two years earlier-two battleships of that superior quality which he had endeavoured to describe to the house. He regretted that they were not purchased last year, but he was glad that they were purchased this year. He was extremely sorry for the Chancellor of the Exchequer in regard to the financial consequences of the purchase. He had only one other thing to say with regard to the Supplementary Estimates. They did not clearly showand he wished to ask his hon. friend the Secretary to the Admiralty to statewhat part of the total Estimate was represented by the purchase money of these ships. He always regretted Supplementary Estimates, and he regretted those now before the Committee more than usual. It was not a fact that this was the first time he had complained of them. He had, year after year, protested against them. His voice had seemed like that of one crying in the wilderness, He hoped the House was becoming more or less alive to the great importance of this wicked system of Supplementary Estimates and he hoped this was one of the last which would be presented to the House.

THE CHANCELLOR OF THE EXCHEQUER (Mr. AUSTEN CHAMBERLAIN, Worcestershire, E.) said the hon. Member

for Dundee and his hon. friend the Mem

ber for King's Lynn had pointedly addressed themselves to him for some explanation. Perhaps the Committee would allow him to give his reply at once. The Committee would not expect him to enter into the merits of naval guns

which the hon. Member for King's Lynn put forward, nor would they expect him to go into the details of the Estimates. He thought these would be fully explained by his hon. friend the Secretary to the Admiralty. What did concern

or considerations of naval construction

The Committee would remember how long in advance these Estimates had to be made. He found from experience that the chief anxiety was lest the Government should not have sufficient money to pay, and they over-estimated very much the amount of work within the year, and unless one cut down that estimate one was forced

to ask the Committee for more money than was actually required. It was extraordinarily difficult to get an accurate

estimate of the amount of work which

as to Supplementary Estimates in general. | complaint from both sides of the House, The hon. Member was perfectly right in during those five years, that the Board saying that this was not the first occasion failed to obtain from the contractors the on which he had drawn the attention of work which it was anticipated they the House to the inconvenience of Sup- would be able to perform within the year plementary Estimates, and no one who to which the Estimates were applicable. had been, as he had been, Financial They were constantly urged that it was Secretary to the Treasury, could be the bounden duty of the Board to take unaware of that inconvenience. He steps to accelerate the work of the contook his present office long after the tractors, and to see that they secured current financial year began, but he and the output of work estimated. The his hon. friend the Financial Secretary present Board of Admiralty were in to the Treasury had done their best to a more fortunate position. The conlimit the Supplementary Estimates. They tractors had more than fulfilled their perfectly agreed that Supplementary Esti- expectations. mates were in themselves an evil, and that they ought not to be used as a method of meeting the ordinary and foreseen expenditure of the year, but that they ought to be reserved for cases which could not be foreseen, or which had some special character attaching to them, It would not be in order for him, in connecton with this matter, to make any observations on the other Supplementary Estimates presented this year. He would confine himself to the Supplementary Estimate now before the Committee. It was due practically to three causes. In the first place it was due to the purchase of the Chilian battleships; in the second place to contractors for Government work having made greater progress than the Admiralty thought it possible to anticipate when the year's Estimates were framed and in the third place to the fact that the original sums taken for repairs of ships then actually on active service in connection with coaling stations, had been proved to be insufficient for the necessary repairs when the ships came into the dockyards. He thought the Committee would see that the Estimate for the amount of work to be done on ships which were still actually serving on foreign stations must be a speculative Estimate, and even the most jealous guardian of national finance could not blame the Admiralty if they could not always estimate accurately the amount shown to be necessary when a ship was in dockyard and when the machinery was actually accessible to investigation. Then there was the question of progress on the part of the contractors. He had the honour to serve for five years on the Board of Admiralty. It was a constant

would be done in a particular year on a contract extending over two or three years, and there seemed always to be an element of uncertainty in regard to it. In the present year, the contractors had earned more than was estimated, and, of course, the Government were bound to ask the House to make provision for that. It was not, however, new expenditure in the sense of being expenditure of which the House had no knowledge or control, of progress which would result in our but it was payment for a more rapid rate having the goods for which we paid more rapidly than we anticipated. As to the mate the purchase of the Chilian ships— third cause for this Supplementary Estihe said the Committee might take it that His Majesty's Government did not contemplate the purchase of the ships last year. That purchase was an unforeseen emergency of the kind to which the hon. Member for King's Lynn alluded. The hon. Member for Dundee did not question the discretion with which the Government

acted in purchasing those ships at the time, and the price paid for them.

MR. EDMUND ROBERTSON said he only asked for information.

was to be obtained at all, without waiting for Parliamentary sanction, which there was no doubt, under all the circumstances, Parliament would be willing to give. There was only one other point to which he would refer.

AN HON. MEMBER: What was the price?

MR. AUSTEN CHAMBERLAIN said that the price was £1,875,000, of which there was included in the present Estimates £707,000; and the remainder would appear in the Estimates for next year. The hon. Members for King's Lynn and Dundee had asked what effect this purchase ought to have on our naval programme generally. He thought that the Committee would see that a purchase made at that period of the year could not materially affect the programme of the year in which we now were. Whether or not it would affect the calculations for next was obvious to everyone; but he conceived it would be out of order to discuss the programme for next year on the Supplementary Estimates. It would be more convenient to do so after the First Lord of the Admiralty had made his statement.

MR. AUSTEN CHAMBERLAIN said that was not incompatible with what he had stated. The hon. Gentleman did not question the purchase, but he did question the propriety of the action of the Treasury in sanctioning any payment on account of this purchase, until the Vote had been submitted to the House of Commons. It was in connection with that matter that the hon. Gentleman required his own presence in the House. He had been called away from a Committee meeting which he was attending. He accepted as Chancellor of the Exchequer full responsibility for having anticipated the sanction of Parliament for the purchase of these ships. In the opinion of His Majesty's Government, it was not desirable that they should purchase the ships at the price which was asked, and under the circumstances which prevailed at the time when they were questioned on the subject in last session of Parliament. When the matter arose again this winter at the reduced price then obtained, and under the circumstances of the time, the Government thought it was not only desirable, but they thought they should be greatly lacking in their duty to the House and the country if they did not secure those ships. Two battleships added to the strength of another Power might seriously disturb the balance of naval power, and might gravely affect the Naval Estimates which would have to be estimated to this House in the future. We got them on much more favourable terms than there was any prospect of obtaining them when the question was mooted last spring or summer, and in the circumstances of the time the Government felt that it was their bounden duty to obtain the vessels. It was an essential part of the contract that the payments falling due on these ships should be met before Christmas, and in the course of the present financial year they could not have carried the contract through unless they were willing to make these terms. Under these circumstances he, as Chancellor of the Exchequer, and the Government, of MR. EDMUND ROBERTSON said that which he was a member, did not hesitate to take the responsibility of making the The Prime Minister's answer was that the that was a merely grammatical criticism. payment which this Committee were now asked to ratify. They took the responsi-that the ships which were on sale were not Admiralty had clearly come to the opinion bility of acting on behalf of the country, at a moment when it was essential that action should be taken if the result desired

MR. EDMUND ROBERTSON said that as he understood it, the real reason why these ships had been purchased now was that they were to be had cheaper than ever before.

MR. AUSTEN CHAMBERLAIN said he did not know exactly what the hon. Gentleman's question really was.

MR. EDMUND

ROBERTSON said that when the purchase was first mooted they were told that the ships were absolutely unsuited for the British Navy.

MR. PRETYMAN said that the term used was that they were unsuitable."

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suitable for their purpose, and that it would not be advisable to buy them. The explanation which he and his friends

the opinion of the hon. Member for King's Lynn that these ships were superior to anything we had. It might be that they were, but he could not take it on the hon. Gentleman's pure word.

MR. GIBSON BOWLES said that the hon. Gentleman might take it on the details of the figures he had laid before the Committee.

really the cause of the expenditure of the £275,000. It was not what the Chancellor of the Exchequer said—namely, inaccuracy in estimating, but that no price was fixed at the outset. Contractors had a real good thing of it in these repairs. Last year he urged the Admiralty to treat the contractors, when carrying out repairs, in precisely the same way as they did the Government yards in this matter. He believed the Estimates given in His Majesty's dockyards were exceed

they were told cost £1,875,000. They were bought through a distinguished firm in the city, Messrs. Anthony Gibbs and Co. He would like to be informed what commission the Government paid for the purchase of these ships.

MR. KEARLEY said that they did not always understand with great clear-ingly correct. The Chilian battleships ness what the hon. Gentleman said. The hon. Gentleman was so full of knowledge that ordinary persons with ordinary brains found some difficulty in filling in the details. But the hon. Member would agree with him that the Admiralty had striven to get homogeneous MR. PRETYMAN: I do not know that any commission was paid upon

ships for our Navy. Now the two Chilian ships, they knew at the outset, were not of that kind. They would require a special kind of ammunition. That of itself would be a great difficulty. He knew sufficient of the working of the Naval Ordnance Department to know that there was sometimes great difficulty in serving out to our ships ordinary service ammunition. He had known ammunition found in ships of the Navy which was quite unsuitable for what was required. The Chancellor of the Exchequer in explaining some of the items in the Supplementary Estimates attributed it to inaccurate estimation of repairs, and rather suggested, he thought, that the inaccuracy largely took place in

them.

Messrs. Gibbs have to vacate their seats MR. KEARLEY: Then why did in this House?

MR. PRETYMAN: Because they sold us the ships.

MR. KEARLEY: Did they get no profit?

MR. PRETYMAN said the Admiralty contracted to purchase these ships from the firm in question, and that was the transaction which caused the vacation of the seats. What arrangement was made by Messrs. Gibbs with the Chilian Government he did not know.

MR. PRETYMAN: Yes.

the Government establishments. As a matter of fact, if anyone would refer to the Supplementary Estimates he would find that the item of £275,000 was all for repairs and alterations of ships built MR. KEARLEY: They were acting by contractors and repaired in contract as principals in the transaction and not yards. Last year he (Mr. Kearley) as agents? called attention to the very unsatisfactory basis upon which these repairs were carried out. In the Government yards an estimate was asked for and expected to be worked to. In the contractor's yard nothing of the kind took place. Ships went in there for repairs and a schedule of prices was worked on, but the contractor was allowed to put on a large percentage of profit, and consequently the Government never knew what the repairs were going to cost when a ship went into the contractor's yard.

MR. KEARLEY: Then I am content.

MR. RITCHIE (Croydon) said that he had been asked to state what his share in these negotiations had been. These ships were offered to the British Government when he was Chancellor of the Exchequer ; but as to his having vetoed the purchase, That was vetoed" was hardly the right word.

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