against new construction, were added to the actual cost of construction. This made it appear that ships built in navy yards cost much more than in private yards, and the facts were not always in accord with that appearance. In fact, taken as a whole, the contrary is true if no items are charged up to new construction except such as are increased in a navy yard by reason of such construction. It is necessary, also, in order to keep down the prices charged by private contractors, for the Government to be able to build its own ships. It then knows the cost and can do all its shipbuilding unless private yards make reasonable prices. During the past year the department authorized new construction work at navy yards which hitherto have not been so engaged. There is therefore at the present time a greater volume of new shipbuilding work in progress and authorized at navy yards, also a greater number of navy yards so employed in new construction, than ever before in the history of the new Navy. It includes the battleships Arizona and California at the New York Navy Yard, the fuel ships Kanawha and Maumee at the Mare Island Navy Yard, submarine L-8 at the Portsmouth (N. H.) Navy Yard, transport No. 1 at the Philadelphia Navy Yard, and supply ship No. 1 at the Boston Navy Yard. There have also been constructed at navy yards during the past year numerous coal barges and several selfpropelled oil barges.

Because of the many advantages, it is the policy of the department to develop shipbuilding at navy yards. Amongst said advantages

are

(1) A check upon the cost of private shipbuilding.

(2) Increased efficiency and preparedness of the yard working forces due to a more uniform and steady employment of workmen. (3) An improved morale of yard service, from master workmen to the unskilled laborer.

(4) Elimination of the expenses of inspections and trial trips. Battleship "New York."-The battleship New York was fully completed and left the New York Navy Yard on April 26, 1914, ready for service, within the 36 months' constructional period set by the department. Although the keel of the New York was laid 41 months after the keel of a sister vessel building by contract, she left the navy yard ready for active service, several weeks earlier than the contract-built vessel. Further, the actual cost of construction was $650,000 less than the estimated cost. The department has commended the commandant, construction officer, and engineer officer of the New York yard, for the excellent work performed by them and the divisions under their control in connection with this work.

Submarine "L-8."-As there is only limited competition in the construction of submarines-but two companies in this country being

engaged therein at this time-I entered into a contract June 29, 1914, with the Lake Torpedo Boat Co. for the necessary working plans and license for the Navy Department to build one submarine boat. I assigned the construction of this boat-submarine L-8-to the navy yard, Portsmouth, N. H. By reason of the construction of this vessel it is hoped to arrive at a definite knowledge of the actual construction costs of vessels of this character, and thus put the department in a position to build its own submarine vessels in the future should there be any evidence of the absence of competition for submarine contracts. During the coming year it is very likely that it will be necessary to further increase the construction of submarines in navy yards.

PERSONNEL AND ITS WISE EMPLOYMENT.

Officers.-Attention is invited to the report of the Chief of Bureau of Navigation on the subject of personnel. This subject requires the serious and thoughtful consideration of Congress, as well from a point of view of efficiency as of economy. First attention should always be given to the personnel, for the man is greater than the machine. Under existing law officers enter the grade of rear admiral at an age when they have but little time to serve before retirement. In consequence, the Government loses the value of experience gained by officers in command of fleets and squadrons, besides being burdened by a greater cost of the retired list, due to the retirement of a greater number of officers as rear admiral than would be the case if officers entered that grade at an earlier age and had a longer time to serve in it. The number of junior officers is increasing from year to year by the output from the Naval Academy, and has already reached large proportions compared with the numbers in the senior grades. If this condition should continue there would come a time when the real working force of the line of the Navy would be composed of junior lieutenants and ensigns, some of whom will be at the present age and length of service of the captains and commanders. At the same time the length of service in the senior grades would become so short that they would be but stepping-stones to retirement as rear admiral without adequate service having been rendered in them by the officer concerned. The sooner this condition is remedied the more economical will be the cost, the greater will be the efficiency, and the less drastic will be the action required. The department has appointed a board, composed of the Assistant Secretary of the Navy, the Chief of the Bureau of Navigation, and Naval Constructor Taylor, to study this whole question and recommend legislation which will remedy the conditions, having in view efficiency as well as

economy.

Enlisted men.-It has been the policy of the department to raise the standard of the enlisted personnel by opening the door of opportunity to the worthy and by weeding out the unworthy, who bring discredit upon the uniform of our sailors. In consequence of this policy, the recruiting officers are enabled to pick and choose among the applicants for enlistment, and a greater percentage of men are reenlisting. When the information is disseminated throughout the country that the position of an enlisted man in the Navy is an honorable one; that none but those of good character are taken; that every man who enlists has the opportunity of getting an education, without expense to himself or his family; that he has the opportunity of learning a useful trade; and that if he wishes to make the Navy his life work he has the opportunity for advancement through the various grades of petty officer, warrant officer, and commissioned officer to the highest rank in the Navy, it is but natural that young men of the highest type of American manhood will be more and more attracted to the Navy, and that their parents will not only encourage, but urge them to enlist. It is not surprising, therefore, that the Navy's authorized complement, which was short for several years, was completely filled in May, 1914, that recruiting had to be suspended in order not to exceed the limit authorized by law, and that a waiting list of applicants for enlistment had to be established. During the fiscal year ended June 30, 1913, the enlisted strength of the Navy reached a total of 48,068, and in the fiscal year ended June 30, 1914, a total of 52,667, showing a net gain of 4,612 men during the year, the number required to man five dreadnaughts and seven destroyers. The percentage of men who, by the character of their discharge, were entitled to reenlist, and who reenlisted during the fiscal year of 1913 was 57 per cent. The same for the fiscal year of 1914 was 65 per cent, or a net gain of 8 per cent. The total number of men serving under reenlistment in 1913 was 16,983. The same for 1914 was 18,640, or a net gain to the Navy of 1,657 experienced men-enough to fully man two of the latest dreadnaughts. During the fiscal year ended June 30, 1914, there were 88,943 applicants for enlistment. Of these, only 18,948 were accepted, or about 1 in 5. Of this number 5,168 had already served one or more enlistments. These figures indicate the high standard required of recruits, and show that there is no lack of fit men who desire to enlist in the Navy.

In view of this gratifying condition, the department has not found it necessary to retain in the Navy men who are undesirable from any point of view, or men who for various personal reasons desire to sever their connection with it in an honorable status. Commanding officers are, therefore, given greater latitude in maintaining

a high efficiency of their commands by ridding the service of undesirable characters, and at the same time the purchase of a discharge is made easy for good men who, for personal or other reasons, desire to return to civil life. The purchase of discharge means only reimbursing the Government for the amount actually expended upon the man before he has given adequate service in return. The man who now enters the service does not feel that he is necessarily bound for four years, whether he likes it or not, or whether unforeseen conditions in his family affairs require his presence at home, but is assured of an honorable means of severing his contract with the Government.

Distribution of personnel.-The proper distribution of the personnel is a question which involves economical problems no less important than are the proper expenditures for material requirements. The main object in all considerations is to attain the highest efficiency in the fighting fleet. Since the upbuilding of the modern Navy began many vessels have been added to the Navy List from time to time, which, although serviceable for war purposes in their day, are now obsolete for modern warfare. Many of these vessels are now in service for patrol duty in southern waters and elsewhere. In case of war many of them would be brought home and turned over to the Naval Militia or other reserve force and utilized in the navaldefense districts on the inner line of patrol. Their personnel would be transferred to ships of fighting value. In time of peace it is desirable to utilize a number of such vessels for patrol and cruising duty, as they are less expensive to maintain than are the vessels designed for modern warfare. As these vessels advance in age, however, their repair bills become greater, and it would be real economy both in personnel and in maintenance to strike them from the Navy List when their crews are needed to man the latest types of vessels designed for the fighting line. Naturally, if all vessels of the Navy, including those referred to, are to be kept in full commission in readiness for immediate war with a first-class naval power, many more officers and men would be required than are at present authorized; and there would be an increasing demand from year to year for more men to man the vessels newly constructed. Happily, however, the necessity for such a condition is not apparent, and the finances of the country should not be overburdened to provide for such contingency.

The General Board in its report (printed as an appendix) recommends in section 43, paragraph (a), that personnel be provided for certain classes of ships named in the report. By wisely utilizing the present enlisted personnel all ships of the classes named can be maintained in full commission without addition to the present enlistment and therefore no legislation is needed to carry out their recom

mendation. This is clearly shown in a report by the Chief of the Bureau of Navigation, which is printed in the appendix on page 64.

It is estimated that more than 90 per cent of the effective fighting power of the Navy is now fully manned. And this percentage will be increased proportionately as new ships are placed in active service by taking the crews from the older ones of little or no fighting value. It is conservative to say that the dreadnaught Pennsylvania in fighting value is worth four or five old battleships and an indefinite number of old cruisers, yet she requires no more men than an old battleship, or two or three of the old cruisers. In other words, 800 men on the Pennsylvania are as effective as 4,000 men on old battleships or as many thousands on old cruisers. This comparison should be borne in mind if the question arises whether the personnel should be increased at the expense of new construction. Owing to the financial condition of the Treasury, due to war conditions abroad, the department does not ask for more men this year, but intends, by the distribution of the personnel to the best advantage, not only to maintain the effective fighting strength of the Navy, but to increase it proportionately as ships now under construction are completed and added to the Navy list during the next year. Since March, 1914, the department has placed in full commission 12 more vessels of the older type than were deemed necessary a year ago. These were in addition to the vessels newly built, and were demanded by the situation in Mexico. The department was enabled to meet this increased demand on the personnel by recruiting to the authorized strength during the year and thus gaining 4,600 more men than were in the service last year.

It is for the Congress to establish the effective strength at which the Navy shall be maintained, both in personnel and in material, and for the department to advise as to the proper balancing of the two. For the reasons given above the department is strongly of the opinion that any retrenchment that may be deemed advisable on account of the financial condition of the Treasury should not be in new construction, as it has pointed out that, if deemed necessary, the present authorized personnel can take care of the new ships that will be added to the Navy in the next two years by withdrawing from service old vessels of little or doubtful military value. Later on, however, increase in personnel should keep pace with new construction. In the meantime there will necessarily have to be placed in reserve from time to time vessels which, although not sufficiently up to date for the fighting line, can render good service in coast defense. For the manning of such vessels and of the auxiliaries which would be required with the fleet in time of war, a naval reserve is necessary, and should be organized and trained at the earliest practicable date.