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Defence - Naval Forces - Royal Commission on Navy and Defence Administration - Report on Navy Administration (dated 13th February, 1919)

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1917-18-19 ..







13th February, 1919.

Presented by command, 4th July, 1919; crrdered to be printed, 5th July, 1919.

[Cast n.f :-Preparation not gh·en; 900 copies; approximate cost oi printing and publishing, £4.]

Printed and Published for the GOVERNMENT of the cf At;STRALIA b,· ALBERT J. :\fULLETI,

Government Printer for the State of Victoria. -

No. 140.-F.2466.-PRrcE 3n.


GEORGE THE FIFTH, by the Grace of God, of the United Kingdom of Great Britain and Ireland and of the British Dominions beyond the Seas, King, Defender of the Faith, Emperor of India:

To our trusty and well-beloved





KNOW YE that We do, by these Our Letters Patent, issued in Our name by Our Governor-General of Our Commonwealth of Australia, acting with the advice of Our Federal Executive Council, and in pursuance of the Constitution of Our said Commonwealth, the Royal Commissions Act 1902-12, and all other powers him thereunto enabling, appoint you to be Commissioners to inquire into and report upon the following matters in connexion with the Departments of Defence and Navy:-

(a) Business administration generally, including contracts and supplies.

(b) Accounting and paying systems.

(c) Industrial establishments.

• (d) Relations with the Department of the Treasury and the Auditor-General.

·AND WE require you, with as little delay as possible, to report to Our Governor-General in and over 011r said Commonwealth the result of your inquiries into the matters intrusted to you by these Our Letters Patent :

IN TESTIMONY WHEREOF. We have caused these Our Letters to be made Patent and the Seal of Our said Commonwealth to be thereunto affixed.


WITNESS Our Right Tru6iy and Well-beloved Sm RoNALD CRAUFURD MUNRO FERGUSON, a Member of His Majesty's Most Honorable Privy Council, Knight Grand Gross of the Most Distinguished Order of St. Michael and St. George, Governor-General and Commander-in-Chief of the Commonwealth of Australia, this second day of July, in the year of Our Lord One thousand nine hundred and seventeen, and in the eighth year of Our reign.

R. M. FERGUSON, Governor-General.

By His Excellency's Command, W. M. HUGHES.

Prime Minister's Department, 20th February, 1918.

RESIGNATION OF A ROYAL COMMISSIONER. His Excellency tho Governor-General in Council has been pleased to accept the resignation of James Chalmers, Esquire, of his appointment as one o£ the Commissioners to inquire into and report upon certain matters in connexion with the Departments of Defence and Navy.


W. M. HUGHES, Prime Minister.

His Excellency the Governor-General in Council has appointed the Honorable Patrick Thomson Taylor to be a Member of the Commission appointed on the 2nd July, 1917, -to inquire into and report upon certain matters in connexion with the Departments of Defence and Navy (vice James Chalmers, Esquire, resigned).

W. M. HUGHES, Prime Minister


To His Excellency the Right Honorable Sm RoNALD CRAUFURD MuNRO, FERGUSON, a Member of His Majesty's Most Honorable Prity Council, Knight Grand Cross of the Most Distinguished Order of Saint Michael' and Saint George, Governor-General and Commander-in-Chief of the Commonwealth of Australia.


We have the honour to submit a further Report in regard to the following matters:-The launch Francisca; The functions of the Naval Board; and

The necessity for prompt reformative measures.


2. The launch Fmncisca was, on the recommendation of the Naval Board, purchased in July, 1912, from Mr. A. E. Morgan, of Perth, Western Australia, for the sum of £1,510.

3. While the vessel was moored ofl the Quarantine ietty at the Henderson Fleet Base, Cockburn Sound, Western Australia, she wP,s damaged by a gale and sank on 13th July, 1913. The launch was raised, but wa,s considered to be beyond repair. In November, 1914, on the recommendation of the Naval Board, the Francisca was sold by public tender. The hull and machinery were disposed of separately owing to

boiler tubes and other parts which required replacing not being obtainable in Australia. The hull realized £75, and the fittings £10, making a total of £85. The boiler was transferred to Williamstown and offered for sale. The official file of papers indicates that it was intended to include the boiler in an auction sale proposed to be conducted

atWilliamstown Naval Depot, but there is no record'of its disposal.

4. Statements of a serious nature in regard to the vessel were made in the Commonwealth Senate on the 31st October, 1918, by Senator A. McDougall, and the Commission was subsequently asked by the Acting Minister for the Navy to investigate the circumstances. However, in giving evidence before us, Senator McDougall stated that he was prepared to withdraw the allegation tha,t the launch had been moored in a certain position with the deliberate object of bringing about her destruction by gales, and the documentary evidence submitted to us by Senator :McDougall, and upon which

he apparently based his statement in the Senate did not support the allegation. Of the three officers immediately concerned with the purchase we find that one is dead, one is residing in the United Kingdom, and the third is in ill-health. In view of the foregoing, and of the fact that more than six years have elapsed since the launch was purchased,,

we consider that, although the launch proved an unfortunate investment for the Department, no useful purpdse would be achieved by further pursuing this matter.

FUNCTIONS OF THE XAVAL BOARD. 5. \Ve have expressed our agreement \Yith the views of Admiral Henderson, as set out below :-" The system must admit of complete parliamentary control and

responsibility, but, as far as possible, such control should in practice be restricted to matters of policy and finance, and tl}e power of Parliament to interfere in matters of detail in the administration of the Navy should be reserved for very exceptional circumstances."



6. We have been supplied by the Acting Prime Minister with a memorandum prepared by a Sub-committee of. the Cabinet. This erroneously attributes to the Commission the suggestions that the JYlinistBr sho1;1ld cease to exercise authority over his Department, and that Ministerial responsibility ·would be abrogated by the adoption of the principle embodied in our Report. Disa,greement is expressed with our view in regard to the scope of ministerial responsibility.

7. We desire, however, to emphasize our opinion that the Minister administering, -the Navy Department should be held responsible for the policy and finance of the administration, and in r,ctual prs,ctice he should not, unless under very exceptional circumstances, interfere YFith details of the administration. These should be intrusted to the Naval Boe,rd and the expert officers of the Department.

8. The whole matter hinges on what is to b0 understood by the term "ministerial responsibility," and whether these words in their practical application to the details of an immense Commonwedth Department spending millions per annum can be accepted in their strictly liteml sense.

H. The determination of the beginning and the ending of " ministerial responsi­ bility " presents considerable difficulty. Giving the phrase its widest interpretation, a Minister would appnrently have the fullest responsibility not only for. his mvn actions, but for those of all officers within his Department. . If a, Minister seek absolute control in connexion with ::>Jl the tmnsactions of his Department he must be prepared to accept the degree of resp'onsibility thus entailed.

10. The attempt by a Minister to control all the detailed affairs of hisDepartment must result in important and urgent business being delayed duringthe periods of absence incidental to a political career. Moreover, the rapidity of the changes in ministerial personnel increases the difficulty experienced by a Minister in arriving at a sound practical

understanding of departmelltal affairs. It is pertinent to note that as many as five different Ministers have controlled the Navy Department during the period of the war, namely:-Senat()r E. D. Millen, from 4th August, 1914, to 17th September, 1914.

Senator G. F. Pearce, from 17th September, 1914, to 12th July, 1915. Mr. J. A. Jensen (Assistant Minister), from 17th September, 1914, to 12th July, 1915. Mr. J. A. Jensen, from 12th July, 1915, to 17th February, 1917. Sir Joseph Cook, from 17th February, 1917, to.July, 1918. Mr. A. Poynton (Acting Minister), from July, 1918, to date.

11. With proper responsibility attaching to the respective Members of the Naval Board the degree of disorganization consequent upon Ministerial changes would be lessened, and we strongly re-affirm the principle laid down in paragraph 7 of this Report.

THE NECESSITY FOR PROMPT REFORMATIVE MEASURES. 12. We observe, with grave concern, the decision of the Cabinet, based on their Sub-Committee's Report, to defer action in respect of a number of our recommendations until the return to Australia of Sir Joseph Cook. In fairness to the Minister for the Navy it should be stated that, prior to his departure from, Australia in July, 1918, he had realized the need of immediate reform in Naval administration, and there is no reason for dpubting tlmt the Sub-Committee, composed as it was of Ministers who have had control of the N2.vy Depwtment during periods covered by our Report, have views on the suhject similr,r to those expressed by Sir Joseph Cook.

13. The urgent necessity for remedying the outstanding defects in the depart­ system impelled us to submit comprehensive recommendations in a Progress

Report dated 18th September, 1918, in order that the advantages resulting from their adoption might in the of efficiency and economy be secured with the minimum of delay. Our close investigation of the working methods of the Central Administration of the Navy Department has disclosed fundamental defects, which, in the public interest, require immediate rectification, r,ncl we feel that it becomes our duty to direct Your Excellency's specifically, to the matter.

14. We invite particular attention to our recommendations for the reconstruction of the Naval Board, for the appointment of a Finance Member thereof, and for the provision of a strong and capable Secretariat. We have ascertained that the Clerical staff employed at the Central Administration numbers about 300. This is much in excess of the number required for and economical working, but the

appointment of an officer capable of reorganizing the staff and introducing proper office methods will result in a very considerable reduction in the number of persons employed. In this connexion, we desire to emphasize the necessity for the adoption of the recom­ mendation contained in paragraph 16 of our Progress Report.

15. In conclusion, we strongly urge reconsideration of the decision to defer action in the above and other matters which we particularly regard as integral features of our proposals for effective reform. The adoption of the improvements which we have suggested in the administration of this important Department of State responsible for

the annual expenditure of millions of money cannot, in the public interest, be further . postponed.

We have the honour to be,

Your Excellency's most obedient Servants,

W. A. NEWMAN, Secretary,

W. G. McBEATH, Chairman,



Melbourne, 13th February, 19Hl.


Printed and Published for the GOVERNMENT of the COMMONWI!:ALTH of AUSTR.4LIA b,· AI.BI':RT j. \IUI.ll l1 Government Printer for the State of Victoria.