I learned from Sir Eric Geddes that he felt capable of undertaking the work on the understanding that he was assured of my personal support; he said that experience in his railway work in France had shown the difficulty of taking over duties hitherto performed by officers, and stated that it could not have been carried through without the strong support of the Commander-in-Chief; for this reason he considered he must be assured of my support at the Admiralty. In view of the importance attached to combining under one administration the work of both naval and mercantile shipbuilding for the reasons already stated, and influenced in some degree by the high opinion held of Sir Eric Geddes by the Prime Minister, I came to the conclusion that his appointment would be of benefit to Admiralty work, and therefore gave him the assurance and said that I would do my best to smooth over any difficulties with the existing Admiralty officials, whether naval or technical.
In these circumstances Sir Eric Geddes was offered the post of Admiralty Controller by Sir Edward Carson, then First Lord, and accepted it. It was arranged that a naval officer should continue to hold the post of Third Sea Lord and that he should be jointly responsible, so far as the Navy was concerned, for all design work on its technical side, whether for ships, ordnance material, mines, torpedoes, etc., etc., whilst the Controller became entirely responsible for production. It was obvious that goodwill and tact would be required to start this new organization, which was decidedly complicated, and that the post of Third Sea Lord would be difficult to fill. At the request of Sir Eric Geddes Rear-Admiral Lionel Halsey, C.B., who at that time was Fourth Sea Lord, was asked if he would become Third Sea Lord in the new organization. He consented and was appointed. When the detailed organization, drawn up to meet the views of Sir E. Geddes, was examined by the naval officers responsible for armament work, strong objections were raised to that part of the organization which affected their responsibility for the control and approval of designs and of inspection.
Sir Eric held the view that inspection should come under the officials in charge of production and that the designing staff should also be under him, the designs being drawn up to meet the views of the naval officers and finally approved by them. Personally I saw no danger in the proposals regarding design, because the responsibility of the naval officer for final approval was recognized; but there was a certain possibility of delay if the naval technical officer lost control over the designing staff. I fully agreed with the criticisms on the subject of inspection, the argument being that only naval officers accustomed to use the ordnance material could know the dangers that might arise from faulty inspection, and that the producer had temptations in his path, especially under war conditions, to make inspection subservient to rapidity of production. Sir Eric Geddes finally waived his objections. He informed me that he based his arguments largely on his experience at the Ministry of Munitions, with which he had been associated earlier in the war. The contention of the naval officers at the Admiralty was that even if the organization proposed was found to be workable for the Army, it would not be satisfactory for the Navy, as in our case it was essential that the responsibility for approval of design and for inspection should be independent of the producer, whether the producer was a Government official or a contractor. Apart from questions of general principle in this matter, accidents to ordnance material in the Navy, or the production of inferior ammunition, may involve, and have involved, the most serious results, even the complete loss of battleships with their crews, as the result of a magazine explosion or the bursting of a heavy gun. I could not find that the organization at the Ministry of Munitions had, even in its early days, placed design, inspection and production under one head; inspection and design had each its own head and were separate from production. In any case in 1918 the Ministry of Munitions reverted to the Admiralty system of placing the responsibility for design and inspection under an artillery expert who was neither a manufacturer nor responsible for production.
The matters referred to above may appear unimportant to the civilian reader, but any question relating to the efficiency of its material is of such paramount importance to the fighting efficiency of the Navy that it is necessary to mention it with a view to the avoidance of future mistakes.
The new organization resulted in the creation of a very large administrative staff for the purpose of accelerating the production of ships, ordnance material, mines, etc. Indeed, the increase in numbers was so great that it became necessary to find additional housing room, and the offices of the Board of Education were taken over for the purpose. It was felt that the increase in staff, though it involved, of course, very heavy expenditure, would be justified if it resulted in increased rapidity of production. It will be readily understood that such an immense change in organization, one which I had promised to see through personally, and which was naturally much disliked by all the Admiralty departments, threw a vast volume of extra work on my shoulders, work which had no connexion with the operations of war, and this too at a period when the enemy's submarine campaign was at its height. I should not have undertaken it but for the hope that the change would result in greatly increased production, particularly of warships and merchant ships.
The success of this new organization can only be measured by the results obtained, and by this standard, if it were possible to eliminate some of the varying and incalculable factors, we should be able to judge the extent to which the change was justified. It was a change for which, under pressure, I bore a large share of responsibility, and it involved replacing, in the middle of a great war, an organization built up by experts well acquainted with naval needs by one in which a considerable proportion of the personnel had no previous experience of the work. The change was, of course, an experiment; the danger lay in the fact that, until technical and Admiralty experience has been gained, even men of the greatest ability in other walks of life may find it difficult to produce satisfactory results even if there are no limits imposed on the size of the Staff which assists them.
The question of production is best examined under various headings and the results under the old Admiralty organization compared with those under the new, although comparison is admittedly difficult owing to changing conditions.
WARSHIP PRODUCTION
Under the Admiralty organization existing up to May, 1917, the Third Sea Lord—as the Controller was termed when changes were introduced by Mr. Churchill in 1912—was head of the Departments of the Director of Naval Construction and Engineer in Chief, and of that part of the work of the Director of Naval Ordnance which dealt with the design and production of guns and gun mountings. Under the new organization a civilian Controller became responsible for production, the Third Sea Lord being associated with him on technical matters of design.
A special department for warship production and repairs was set up under a Deputy Controller, the Third Sea Lord having no authority over this department except by his association with the Controller.