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 SECRET. Copy No.

C P . 26 (36).

CABINET.

P R O G R A M M E S OF T H E D E F E N C E S E R V I C E S .

T H E accompanying Report of the Sub-Committee of the Committee of

Imperial Defence on Defence Policy and Requirements is circulated for
consideration at the Meeting of the Cabinet to be held a t 11 A . M . on Monday next,
the 17th instant, in accordance with Cabinet 6 (36), Conclusion 1 (&).

(Signed) M. P . A. H A N K E Y ,
Secretary to the Cabinet.

2 Whitehall Gardens, S.W. 1,

February 12, 1936.

[12683]
 y
THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT 2 7 S

Printed for the Committee of Imperial Defence. ""February 1936.

MOST S E C R E T . Copy No. 44

D . P . R . (D.R.) 9

TO B E K E P T UNDER LOCK AND KEY.

I t is requested t h a t special care may be taken to

ensure the secrecy of this document.

COMMITTEE OF I M P E R I A L DEFENCE.

Sub-Committee on Defence Policy and Requirements.

PROGRAMMES OF THE DEFENCE SERVICES.

REPORT.

I.—INTRODUCTION.

I N October 1935 the Cabinet were informed ( C P . 187 (35)) t h a t the

(Official) Defence Requirements Committee had been instructed to re-examine the
question of Defence Requirements with special reference to the programmes of
the Navy, A r m y and A i r Force and to make recommendations for the future.
The terms of reference of the Committee, for this purpose, were communicated
a t the same time to the Cabinet, who approved the procedure which had been
adopted (Cabinet 45 (35)).
2. The Report of the (Official) Defence Requirements Committee was
presented to the P r i m e Minister on the 21st November, 1935, and was referred
to the Committee on Defence Policy and Requirements, the membership of which
was, by direction of the P r i m e Minister, slightly varied for the specific
consideration of this R e p o r t ; the consequent constitution of our Committee is
given in A n n e x A.
3. We have had nine meetings, and now submit to the Cabinet our
observations and recommendations on the Report before us, a copy of which,
with its Schedules, is attached hereto.

II.—THE INTERNATIONAL SITUATION.

4. W e appreciate t h a t in the Section dealing w i t h the I n t e r n a t i o n a l

Situation the Defence Requirements Committee desired to analyse the various
factors which tend to disturb the peace and so to lead up to the measures which
they recommend the Government to adopt to remedy a situation which is
admittedly fraught with grave danger to this country. We have read t h i s
important Section of their Report in this light, and we agree t h a t it represents
a generally accurate picture of the state of international affairs. The wording
and the emphasis is, of course, t h a t of the Defence Requirements Committee,
and, whilst we accept the general reasoning, it should not be assumed t h a t it
necessarily represents in detail our own views.
5. We can, however, fully associate ourselves w i t h the deduction reached in
p a r a g r a p h 22 of the Report of the Defence Requirements Committee as to t h e
[12683] B
four possible policies on which this country's international relationships may be
based, i.e. :—
(i) Adherence to the system of collective security provided for in the
Covenant of the League of N a t i o n s ;
(ii) A more limited system of collective security on the Locarno model;
(iii) The pre-war system of alliances and ententes; or
(iv) Isolation.
The leadership of a strong B r i t a i n is now clearly essential to the success of the
Covenant system; if the Covenant were to fail, co-operation and a i d may be
expected from other nations only to the extent t h a t B r i t a i n is recognised as being­
strong and r e a d y ; an isolationist policy would undoubtedly require the greatest
strength of all. W e a r e in full agreement with the views t h u s expressed by the
Defence Requirements Committee a n d w i t h their deduction ( p a r a g r a p h 23 of
their Report) :—
" The lesson we d r a w from recent events is the paramount necessity,
whatever our policy in future, for m a k i n g ourselves sufficiently strong to
enable us to take our full share i n m a i n t a i n i n g the peace of the world and
so to preserve ourselves, in the hope t h a t a time may ultimately come when
m u t u a l reductions of armaments by consent may become possible without
u p s e t t i n g t h e equilibrium. T h a t time, however, is not y e t . "

III.—DEFENCE REQUIREMENTS (GENERAL).

6. Continuing from their review of the international situation, the Defence

"Requirements Committee proceed to outline their views on Defence Requirements
as a whole, recording the new factors of a recrudescence of German naval
strength; the possibility of a hostile I t a l y on our m a i n line of communications
to the F a r E a s t ; and the possibility of heavy and continuous a i r attack from
Germany. I n connection w i t h our communications t o the F a r E a s t the Defence
Requirements Committee remark t h a t our defence requirements are so serious
t h a t it would not be possible w i t h i n the three-year period w i t h which this R e p o r t
mainly deals, to make provision for the case of a hostile I t a l y ; we feel t h a t the
view t h a t it is not urgently necessary nor feasible to make provision for a
permanently hostile I t a l y should be endorsed.
7. B u t even excluding Italy, the new considerations in the situation of
to-day have led the Committee to make recommendations for revised s t a n d a r d s
of security in the case of all three Services. I t will be convenient if we record
our views on these new s t a n d a r d s individually in the following Sections dealing
w i t h each Service concerned.

IV.—NAVY PROGRAMME AND REQUIREMENTS.

8. Since 1932 the s t a n d a r d of naval strength h a s for practical purposes

been based on t h e following formula :—
" W e should be able to send to t h e F a r E a s t a Fleet sufficient to provide
' cover' a g a i n s t the J a p a n e s e Fleet; we should have sufficient additional
forces behind this shield for t h e protection of our t e r r i t o r y and mercantile
marine against J a p a n e s e a t t a c k ; a t the same time we should be able to
r e t a i n in E u r o p e a n w a t e r s a force sufficient to act as a deterrent a n d to
prevent the strongest E u r o p e a n Naval Power from obtaining control of our
vital Home terminal areas while we can make the necessary redispositions."
( N . C . M . (35) 12.)
The coming increase i n German naval power combined w i t h continuing
anxiety for the safety of our possessions i n the F a r E a s t have properly led the
Defence Requirements Committee to a careful reconsideration of our naval needs,
.and they recommend a netv s t a n d a r d of naval strength defined as follows :—
(i) To enable us to place a Fleet in the F a r E a s t fully adequate to act on
the defensive and to serve as a strong deterrent against any t h r e a t
to our interests in t h a t p a r t of the globe.
(ii) To m a i n t a i n in all circumstances in Home W a t e r s a force able to meet
the requirements of a w a r w i t h Germany a t the same time.
 Included in (i) and (ii) would be the forces necessary in all p a r t s of the world,
behind the cover of the main fleets, to protect our territories and merchant ships
against sporadic attacks.
D u r i n g the next three years, however, there are difficulties from the point
of view of provision both of material and personnel, which render it difficult
to take any considerable steps towards the attainment of the proposed new
standard. Moreover, what would be involved by the adoption of the new
standard has not yet been worked out in detail, and we consider t h a t approval for
this standard should be reserved until the practical effects can be more precisely 1st Recom­
estimated. * *­ m e n d a t i o

9. I n the same connection we have h a d some discussion on the Cruiser

replacement programme, which at present involves the building of five ships a
year between 1936 and 1939. A new naval s t a n d a r d of security will no doubt
involve a higher strength in cruisers, as well as in other types of ships. I n these
circumstances we agreed to ask the A d m i r a l t y —
(i) to work out the naval programme required to give effect to the new 2 n d
Recom­
s t a n d a r d of naval security as soon as the necessary d a t a are available; m e n d a t , o n
'
and
(ii) to make suggestions as to any items in the new programme t h a t can be
p u t in h a n d before the expiration of the next three years;
and to withhold, until t h a t information was received a recommendation for
approval for the new s t a n d a r d of naval strength referred to.
10. Items of naval requirements based on past standards are p u t forward
by the Defence Requirements Committee as follows :-—

Capital Ships.
A replacement programme of seven ships in the period 1937-39 inclusive
( 2 : 3 : 2). This will provide equality in new ships w i t h Germany and J a p a n i n
1942 on the important assumption t h a t J a p a n does not start building at a greater
rate than has been assumed by the Admiralty.

Aircraft Carriers.

Four new Carriers (some of a smaller type) within the period 1936-42.

Cruisers.
The proposal is for a replacement programme of five ships a year, but since
our ultimate provision of cruisers is dependent on a number of factors, including
the acceptance or otherwise of a " new s t a n d a r d " of naval defence, we consider
that this programme should be adopted, for the present, provisionally and subject
to later review.
Destroyer Leaders and Destroyers.
A further flotilla of destroyer leaders in 1936-37, and subsequently a
flotilla of destroyers in alternate years u p to 1942.

Submarines, Sloops and Small craft.

To continue at the present r a t e of about three submarines and five or six
sloops a year.

Deficiencies.
The provision of reserves of ammunition, anti-submarine equipment,
stores, & c , together with the modernisation of Capital Ships. Complete moderni­
sation is proposed for three of our Capital Ships and p a r t i a l for four more. The
Nelson, Rodney and Hood will not require modernisation. The question of t h e
modernisation of the remaining five ships must depend on future developments,
one of the most important of which will be the extent to which other P o w e r s
retain their older Capital Ships.

Personnel.
A n expansion in strength by some 35,600 spread over 1936-42.
[12683] B 2
 Fleet Air Arm.
A n increase from 190 aircraft (embarked in carrier and c a t a p u l t ships) in
1935 to 357 in 1939, a n d 504 in 1942. T h e corresponding anticipated figures for
the U n i t e d States of America and J a p a n , in 1938, are 670 and 374 respectively.
Expediting Naval Construction.
Emphasis has been laid on the desirability of expediting construction by
laying down ships earlier in the year t h a n h a s hitherto been usual. Several
months' acceleration could thereby be gained yearly.
3rd Recom­ 11. W i t h all the above proposals, which lie within the existing approved
mendation.
s t a n d a r d of naval strength, we are in agreement and recommend them for approval
by the Cabinet, with the reservation t h a t the cruiser programme should be adopted
only provisionally and subject to later review.
T h e provision of a new s t a n d a r d of naval defence, decision on which is post­
poned for the present,, would necessitate an increase in all classes of ships and
also of personnel.

V.—ARMY PROGRAMME AND REQUIREMENTS.

12. The s t a n d a r d of security recommended by the Defence Requirements

Committee for the A r m y is :—
(i) To m a i n t a i n garrisons overseas on the present general basis for purposes
of Imperial Defence,
(ii) To provide for the military share in Home Defence which includes
anti-aircraft defence, Coast Defence and internal security,
(iii) To. enable us to provide reinforcements a n d / o r a Field Force from Home
in time of emergency or war, w i t h adequate equipment a n d reserves.
U n d e r (i) and (ii) the most important requirements are a substantial improve­
ment in coast defences a t Naval bases at Home and Abroad, and the completion
of the A r m y ' s share in the A i r Defence of Great B r i t a i n .
U n d e r (iii) the Defence Requirements Committee state t h a t the most
important requirement is to organise a Field Force which can be sent abroad at
short notice for the protection of our vital interests, and to enable us to honour our
i international obligations, particularly under the Treaty of Locarno, which would
involve effective co-operation w i t h other signatories on the Continent of Europe.
This may include joining w i t h our allies in ensuring the occupation by the allies
and the denial to the enemy of advanced air bases in the Low Countries.
4th Reeom­ 13. W e recommend the acceptance of (i) and (ii) above, and also of (iii)
mendation. subject to certain reservations i n r e g a r d to the role of the Territorial Force, which
I are dealt w i t h later.
14. W e feel t h a t we should inform the Cabinet that we have very closely
considered the importance of t h e Low Countries to our own security in its air
aspects. The Chiefs of Staff have on more t h a n one occasion emphasised the
strategical importance of the Low Countries; an extract from a R e p o r t of 1933
is attached as Annexe B, to which we call attention. W e are p r e p a r e d to accept
the renewed advice given to us, w i t h its implications as to the need for
i modernising and making good the deficiencies of the Regular Army.
15. The role proposed for the A r m y will require the provision of a Regular
Field Force Contingent of four Divisions; a Mobile Division (i.e., a reorganised
Cavalry Division of mechanised units), two A i r Defence Brigades, A r m y
Co-operation Squadrons of t h e Royal A i r Force, together w i t h the necessary
complement of General H e a d q u a r t e r s , Corps and Line of Communications
troops; the whole provided w i t h all its essential needs in modern armament and
material.
16. I t should be remarked t h a t this proposal is for modernizing and
re-equipping the A r m y ; except for the provision of three new T a n k Battalions
a n d one A i r Defence Brigade, the formation of which has already begun as a
result of the present emergency, no increase in the number of u n i t s a n d formations
in the Regular Army is proposed to meet the needs of t h i s Contingent.
17. If our assistance to Continental allies is to be effective, the Regular
Field Force Contingent must be available as soon as possible, but at present
 - 5 277
practical limits make it impossible to disembark the whole of this force in less
than many weeks. The necessary acceleration so that the force may disembark
within a fortnight will involve an annual recurrent expenditure for personnel,
rising to an ultimate figure of about £ 1 ^ million.
18. We are agreed t h a t the Regular Army should be properly equipped in
all respects and ready for any role which it may be called upon to perform. W e
submit the following conclusions to the Cabinet for confirmation :-—
(a) To adopt p a r a g r a p h s 65 to 67 (dealing with the proposals for the Regular 5th Recom­
Field Force), subject to examination by the Treasury Inter-Service ' m e t l a t l o n

Committee of the figure of £1,100,000 to £1,500,000 given in p a r a ­

g r a p h 67 for the increase of the annual recurrent expenditure on
speeding up the r a t e of mobilisation for the Regular Field Force.
(b) T h a t the Army programme for the reconstitution of the Regular Field
Force (which, in full, extended beyond five years) should be accepted
for a five-year period only, w i t h a view to obtaining w i t h i n t h a t time
a fully efficient Regular contingent of the Field Force, complete with
personnel, material and war reserves of all kinds.
19. The proposals of the Defence Requirements Committee for the
Territorial A r m y aimed at supporting the Regular Contingent by Territorial
divisions at intervals of 4, 6 and 8 months, d a t i n g from the outbreak of war.
At each of these intervals four Territorial Divisions were to be ready to reinforce
the Regular Contingent, and the 5th Regular Division, which exists in peace,
was to be used to stiffen the first four territorial divisions to go abroad. The
cost of modernizing and placing these twelve Territorial Divisions in a state of
readiness for war on the above basis, including the necessary reserves of
ammunition, is estimated at about £ 4 5 * millions; this sum being additional to
£250,000 a year already authorised for improving the inadequate equipment and
aids to t r a i n i n g available for the Territorial Army. This will include the raising
of a few cadres for non-existent units.
20. We have scrutinised these proposals with much care and we have been
informed that, even if they were now approved, little could, in fact, be done
during the next three years towards the actual provision of the material needed
to modernize the Territorial Army and to equip it for war. There is a limit to
what industry can do in the first years, and questions of priority therefore arise;
it is clear t h a t the prior needs of the Regular Army, not to mention those of the
Navy and the A i r Force, will strain to the utmost our productive capacity. There
are also political difficulties in any public announcements laying down in much
detail the future role of the Territorial Army. Nevertheless, we are fully aware - - ',
'oi the difficulties which beset the Territorial A r m y in peace, and we consider t h a t
all possible steps should be taken to improve their recruiting and efficiency.
Moreover, we appreciate t h a t it is the desire of the Territorial A r m y to be
assured that, in the event of its being used to reinforce the Regular Army, it shall
do so in its own units and formations, and not by d r a f t finding.
21. In these circumstances we submit the following Conclusions to the
Cabinet:—
(i) To reserve the decision as to whether or when the proposals for recon- , i t h
Recom­
ditioning the Territorial Force can be implemented, for three years, m e m , a t , o n
­
or until such time as the industrial situation of the country and its
capacity for output brings these proposals within the range of actual
possibilities—by which time other factors in the decision may have
become clearer.
(ii) Subject to (i), to authorise the W a r Office in the meanwhile to work out
in detail their plans for implementing the proposals in the Report.
'(iii) To confirm the previous decision to allot £250,000 a year to the
Territorial Force.
(iv) To authorise the W a r Office to state publicly t h a t the function of the
. Territorial Field Force is to serve wherever it is needed, and that, it
will, if necessary, be: used as a second line, not as drafts, but serving
in its own units and formations, to support the Regular A r m y if it
, goes.abroad. And, further, t h a t it.is the policy of the Army Council
"*' I n c l u d e s a b o u t £5 millions under items (a) (ii) and '(;/) in Table I I in the a t t a c h e d report.-'- "­
1
 to complete the peace establishment of the Territorial Force within
the next three years, but t h a t its equipment can only proceed slowly
for the present, as p r i o r i t y must be given to the Regular Army.
The effects of the above will be to postpone for later decision expenditure
estimated at £ 4 5 million on the modernization of 12 Territorial divisions intended
to give them the necessary material, including ammunition, to take p a r t in
modern war.
Ammunition.
22. One effect of our suggestions regarding the T e r r i t o r i a l Force is
considerably "to reduce the scale of ammunition reserves to be provided in the
next three years, since the requirements of the Territorial divisions in this respect
will be temporarily in abeyance. T h e figure is reduced from the estimated
£ 3 5 - 2 million to about £ 2 1 million (including ammunition for the new artillery
equipment). This latter amount will be needed to provide reserves of ammunition
for the R e g u l a r contingent to bridge the g a p from the outbreak of w a r until the
7th Becom­ war-expanded industry of the country can meet requirements, and we consider
mendation.
ammunition to the latter amount should be provided.
Coast Defence.
23. The proposals of the Defence Requirements Committee under this bead
are :—
(a) Singapore.—Completion of the 2nd Stage of the defences, already
accepted in principle, by the provision of three further 6-inch gun
batteries and 6 defence electric lights and barracks for a t h i r d British
Battalion.
(b) Hong Kong, Aden, Ceylon and Penang.—The completion of the
authorised programme in 10 years instead of 15. I t should be noted
t h a t if Article X I X of the Washington T r e a t y is to lapse further
increase might be entailed for H o n g Kong.
(c) Malta, Gibraltar and Freetown.—Acceleration of t h e authorised pro­
gramme from 20 to 14 years. Certain of these proposals may
require revision in an u p w a r d direction if the Mediterranean situation
is to remain unsatisfactory.
(d) Home Ports.—An increase to £75,000 per annum of the £25,000 per
annum already allotted, the present allotment being quite insufficient
to remedy even urgent requirements.
8th Recom­ We recommend to the Cabinet the proposals outlined above for accelerating
mendation.
the Coast Defence Programme.
Air Defence of Great Britain.
24. W e consider t h a t authority for the completion of the programme of
anti-aircraft defences, which has already been given in p a r t , should ho longer be
delayed, and we agreed :— .
9th Recom­ (a) T o recommend the adoption of the proposals for the A i r Defence of
mendation.
Great B r i t a i n ; to note t h a t these brought w i t h i n sight of completion
in five years the full scale of anti-aircraft defence as p u t forward in
the R e p o r t circulated to the Cabinet as C P . 144 (35); a n d to note
also t h a t the annual allotment proposed for this purpose in P a p e r
No. D.P.R. 52 would furnish the greatest acceleration practicable in
the next two or three years, at the end of which time the allotment
might require further consideration;
(6) to take note of the fact t h a t the approval by the Committee of Imperial
Defence at their meeting held on the 30th J a n u a r y , 1936, of the pro­
posals for ammunition requirements of the A i r Defence of Great
B r i t a i n (C.I.D. P a p e r No. 219-A) would result in some reduction in
the cost of the Scheme as estimated in the Defence Requirements;
Report;
(c) to recommend that the W a r Office, in implementing the Scheme, should,
as far as practicable, exercise circumspection in order t h a t changes
could, if necessary, be introduced to meet the event of future develop­
ments in other means of air defence;
 (d) to note t h a t approval for the proposals in the Report under consideration
would be complementary to the p a r t i a l authority already given by the
Cabinet (Cabinet 40 (35) Conclusion 5) and the Defence Policy and
Requirements Committee.

]\few Infantry Battalions.

25. The report of the Defence Requirements Committee recommends the
formation of an additional four battalions, and our attention was drawn to the
fact that, as compared with 1914, we have 22 less battalions to g u a r d I m p e r i a l
interests, which are greater than ever. Their proposal is limited to four battalions
merely because recruiting difficulties to-day offer no hope of being able to raise
more. W e approved this proposal, subject t o the concurrence of the Cabinet. 10th. Recom­
mendation.
Re-equipment of Field A rtillery.
26. The W a r Office have under tests an 18-pdr. gun relined to take a
25-pound shell. Trials to date have been satisfactory and, if they so continue,
they recommend that this converted gun should replace the existing 18-pdrs. and
4-5-inch howitzers. These equipments were p u t into service about 30 years
ago and are definitely inferior to corresponding German weapons of more modern
design. Re-equipment of Artillery has periodically to be faced, and it would
seem very undesirable now to pile u p g r e a t stocks of ammunition reserves for
obsolescent weapons.
27. I f time were available it would no doubt be preferable to design an
entirely new piece so as to take the field with the most modern weapon, but we
are informed t h a t it would take some two years before even the first gun of a new
design would become available. T h a t is a delay which we do not think acceptable
and we are informed t h a t the converted 18-pdr. will be a notable advance on the
present equipments. W e think therefore t h a t we should accept the proposals
for conversion of the 18-pdr. gun, subject to design being actively continued
towards a new gun which will take the same new type of ammunition, and our
recommendation is :—
To approve the proposals for the re-equipment of the Field Artillery
on the understanding t h a t the converted 18-pdrs. therein referred to would
be the first ' ' mark " of a new gun, and t h a t a further ' ' mark '' would be
designed capable of taking the same ammunition as the converted 18-pdr. nth Reoom­
1
mendation.
Improvement in Housing.
28. The housing conditions in the A r m y are admittedly very unsatisfactory
and it is full time t h a t steps were taken for their improvement. The cost,
additional to the present rate of normal annual expenditure, is estimated in the
Report as £10 million over the next ten years, but we are informed that a later
calculation has reduced this figure and t h a t the r a t e of expenditure will be a
matter for subsequent determination.
Our recommendation is :— 12th Reeom­
mendation.
To approve in principle the proposals for the improvement in housing
of the Army, and to note t h a t there will be some reduction in the r a t e or
expenditure originally proposed.
Recruiting.
29. No specific suggestions are made in the Report to deal with the
recruiting difficulties for the Army, but the matter has received most anxious
consideration in the W a r Office and we understand t h a t proposals are likely
shortly to be submitted to the Cabinet. The Report of the Defence Requirements
Committee indicates that, if further efforts prove inadequate, it may be necessary
in the last resort to propose an increase of pay of the forces so as to compete with
-conditions in the labour market. I t will be appreciated that such action might
well have very far-reaching results on industry, including those branches of
industry which, will be h a r d p u t to it to meet the needs of the Services. I n these
circumstances, whilst we fully appreciate the need for taking active steps to
improve recruiting both in the Regular and Territorial Army, we must enter a
-caveat as to the objections, from the point of view of the whole economic position
of industry, to an increase in the p a y of the Forces which would compete with
 conditions existing in the labour market. Meanwhile, we note t h a t the improve­
ment in housing referred to in the preceding p a r a g r a p h is a move in the direction
of better amenities and should help recruiting (see also 24th Recommendation).

V I . - A I R FORCE PROGRAMME AND REQUIREMENTS.

30. The first recommendation of the Defence Requirements Committee in

the A i r Force Programme is for the completion of our metropolitan first-line
strength to a total of. 123 squadrons (1,512 aircraft) by A p r i l 1937 for which
authority has already been given. I t should be noted, however, t h a t under our
present policy of numerical p a r i t y with Germany it may be necessary to reconsider
this figure, for there is, unfortunately, increasing evidence t h a t Germany is not
likely to be content w i t h a figure of less t h a n 2,000 first-line aircraft. This is a
subject which, a t the proper time, may require thorough reconsideration.
A p a r t from t h a t consideration, however, we agreed to recommend :—
13th Reeom­ (a) Completion of the expansion programme of the Royal A i r Force already
mendation.
authorised; and
(&) T h a t the A i r M i n i s t r y should have latitude to vary the Royal A i r Force
programme so as to improve its offensive power and constitute the
most effective deterrent against German aggression. I t should be
appreciated t h a t this will involve some increase in numbers in addition
to the substitution of larger a n d more efficient machines for those
envisaged in the latter p a r t of the present programme.

Army Co-operation Squadrons.

14th Recom­ 31. For the Regular Contingent.-We recommend the provision of
mendation. 7 squadrons (each of 12 aircraft) and' 1 squadron for communication purposes to
accompany the Regular Contingent. (5 squadrons are already in existence.)
For the Territorial Army.—In view of our proposal to reserve the decision
as to whether, or when, the proposals for reconditioning the Territorial Army
can be implemented we feel justified in suggesting a reduction in the number of
squadrons of army co-operation aircraft intended to accompany territorial
divisions. For a number of reasons it is inadvisable to make no provision at all
under this head, and whilst reserving approval to the full proposals for providing'
the Territorial A r m y with army co-operation squadrons until the detailed
proposals for the role of the Territorial A r m y in. war is brought u p for further
consideration, we recommend : -
loth Recom­ T h a t authority should be given to make a beginning with the equipment
mendation. and provision of Army Co-operation squadrons for the Territorial Army
by the provision of 4 additional auxiliary squadrons.
I t may be noted t h a t this provision will still further increase the
strength of our first-line aircraft above the figure of 1,512.

Fleet Air Arm.

16th Recom­ 32. A s noted in p a r a g r a p h 10 we recommend provision by 1942 of a first­
mendation.
line strength of 504 aircraft, and the consequent provision of further shore
accommodation a t home and abroad.
Overseas Squadrons.
17th Recom­ 33. W e recommend approval for the following proposals contained in the
mendation.
Report to be adopted as circumstances p e r m i t : —
Singapore.—An additional land-plane reconnaissance squadron a n d two
additional operational landing grounds.
J
Penang, "Ceylon, Aden.—One land-plane reconnaissance squadron at
each of these places.
Hong Kong.—The provision of a total of 4 squadrons and one spotter
flight, together w i t h a repair unit and an additional aerodrome.
-Middle East.—An additional squadron to increase the strategic reserve
in the Middle E a s t Command.
East Africa.—One general purpose'squadron.
 y
Malta.-The provision of one composite squadron (4 flights) for M a l t a
has been p u t forward as a n u r g e n t requirement, and we agree. A n
increase to 2 squadrons a n d 1 spotter flight may later become
. . necessary, but authority for this should, we consider, be reserved.
West Africa and West Indies.—The Eeport recommends the establish­
ment of an aerodrome a n d one general purpose squadron a t Sierra
Leone a n d a reconnaissance squadron i n the W e s t Indies, but we
u n d e r s t a n d t h a t this is held to be in a lower order of p r i o r i t y to
other overseas requirements, and we consider t h a t approval should
be reserved for the present.
Gibraltar.—Investigations a r e t a k i n g place as to the feasibility of
constructing an aerodrome a t Gibraltar. This forms an essential,
and a t present missing, link in our a i r communications, and w e
have accepted, in principle, the desirability of an a i r base at t h a t
place.
War Reserves.
34. The main item of expenditure in t h e Defence Requirements Committee's
recommendations is for t h e provision of w a r reserves. I t should not be necessary
to emphasise t h a t the provision of air forces will not avail in w a r if they are
not given the means to fight, and to continue fighting. T h i s applies to aircraft,
personnel, ammunition and material of all kinds and the proposals p u t forward
have been worked out as accurately as circumstances will permit.
The vast problem of industrial production affects, of course, all three
Services and is dealt with in the next Section of the R e p o r t ; but in connection
with A i r Force needs we have agreed :—
(a) I n principle, t h a t the A i r M i n i s t r y should include in their programme 18th Reeom­
provision of w a r reserves on t h e basis of the proposal of the Defence m e n d a t l o n
-
Requirements Committee. T h e detailed steps to carry out this
programme will, of course, be discussed with t h e Treasury.
(b) T h a t the A i r Ministry should continue to work out plans for t h e employ ­
ment of the shadow aircraft industry to the extent to which i t might
be necessary to utilise this industry to fulfil their expansion
programme, a n d should proceed with the necessary arrangements t o
give effect to these plans, t a k i n g care t h a t i n doing so they act in
conformity w i t h the allocation of firms under the general plan for the
shadow industry referred to below.
(c) T h a t the A i r Ministry, i n making plans for increasing i n d u s t r i a l output
to meet their programme, should make allowance for future orders
likely to be received from foreign countries for military aircraft, so
far as these could be estimated.

VII.—INDUSTRIAL PRODUCTION.
35. The most serious factor in the completion of the proposed programme
is the limited output of our existing i n d u s t r i a l resources. T h e key to successful
completion of the Services programmes lies in the solution of the i n d u s t r i a l
problem. Were ample time available it would be a less complicated matter, but
there is an urgent need to restore deficiencies which have accumulated over t h e
last fifteen years.
36. The proposals p u t forward by the Defence Requirements Committee
aim at the maximum estimated achievement within the next 3 years, but there a r e
many items for all three Services which i t is physically impossible to complete
within t h a t time. This emphasises the need to make a n immediate start. I t h a s
rightly been urged t h a t we must aim a t securing our Service needs without
interference w i t h or reduction of production for civil and export trade. From
the production point of view this greatly complicates the matter, but any such
interference would adversely affect the general prosperity of the country and so'
reduce our capacity to find the necessary funds for the Service programmes. I t
would undoubtedly a t t r a c t P a r l i a m e n t a r y criticism.
37. The Ministerial members of the Committee wish to place on record t h e n
indebtedness to Lord Weir, whose advice and assistance h a s been of the very
greatest value. H e p u t forward to us his views in a Memorandum which i s
attached as Annexe C and which we commend to the notice of the Cabinet.
[12683] c
 38. A s Lord Weir indicates, the problem is a dual one. I n t h e first place
we have, in time of peace, greatly to expand our o u t p u t capacity in order to meet
the demands to be made upon it. I n the second place, we have to build u p a
reserve of o u t p u t capacity which can be brought into operation a s soon a s possible
after the outbreak of war. Although these problems must be kept separate, the
solution of t h e first of these will go some way towards the solution of the second,
since the greater the peace time output the less remains to be done for war.
39. I t h a s already been accepted t h a t the o u t p u t of our Government
factories a n d " professional" a r m a m e n t firms, however much expanded, will be
insufficient for w a r needs and t h a t recourse will have to be made t o w h a t is
termed a " s h a d o w armament industry." The principle of such an industry is
t h a t firms who do not normally make warlike stores are engaged to do so by
placing orders w i t h them in peace time on a relatively small scale, on the
condition t h a t they lay out their works a n d hold machinery for a w a r output
greatly in excess of their peace production. I n i t i a l steps for the creation of this
" shadow armament industry " in w a r have already been taken by the P r i n c i p a l
Supply Officers Committee Organisation, but we are now advised t h a t the needs
of the proposed programme cannot be met by Government factories and profes­
sional armament firms alone, and t h a t it will be necessary not only to create but
to p u t into operation a p a r t of the ' ' shadow industry ' ' in peace.
:
. 40. The problem is a s complicated as it is important, and it does not lend
itself to summarisation, but we call attention to a few of its more important
aspects.
Machine Tools.
41. One of the most important limiting factors lies in specialised machinery
of all kinds and especially machine tools. Our own machine tool industry is
already fully employed and urgent steps are necessary to develop t h a t industry
to meet the demands t h a t will fall upon it.
Skilled Labour.
42. A further difficulty lies in the shortage of skilled labour, a shortage
which cannot rapidly be met by the t r a i n i n g - u p of semi-skilled labour. W e doubt
whether Governmental assistance, in the form of technical t r a i n i n g schools, can
be of any real assistance. T h e solution lies w i t h the firms themselves; i t is better
and quicker t h a t men should be trained " o n the job." Although this will take
time, we believe it to be the only practicable method, indeed, certain firms,
notably Vickers, Ltd., have already started t r a i n i n g classes of their own in
anticipation of the demand.
Collaboration of Industry and the Prevention of Profiteering.
43. We have already received proof t h a t the Federation of B r i t i s h Industries
is p r e p a r e d willingly to collaborate w i t h us, and w e set much store on the estab­
lishment of good relations between the Government and Industry, both in the
latter's overhead organisation and, in detail, with the individual firms concerned.
W h i l e we attach importance to the good offices of the Federation of British
I n d u s t r i e s as a factor in securing goodwill on the p a r t of B r i t i s h industry, we
accept Lord W e i r ' s view t h a t " t h e really effective and essential contact- and
collaboration must take place on the lower rungs of the ladder," t h a t is to say,
" a s regards direct contractors, between them and the Supply Departments, and
as regards secondary and ancillary sections of industry, with small committees
appointed within the sections, usually by the trade organisations." The placing
of contracts, the terms of remuneration and the prevention of profiteering are
all matters which will require the closest consideration throughout the whole
period of the programme. As a preliminary measure we have appointed a small
committee under the Chairmanship of the Chancellor of the Exchequer w i t h a
term of reference :-—
'' To investigate the question of w h a t arrangements should be made to
provide against excessive profits- being made by contractors, having regard
to the political considerations (including the statement on the subject in the
Governments election manifesto), the importance of obtaining the goodwill
of the Contractors, and other factors in the problem."
Their Report is attached in Annex D and is submitted for approval.
Financial Control.
44. L o r d Weir, in emphasising the need for speed, has seated in his
Memorandum : —
" . . . . the conditions are in some measure akin to W a r conditions. The
word of the man responsible for Supply must carry, and the spirit and
enthusiasm which he has evoked in the c o n t r a c t o r s m i n d must not be chilled
by delays of approvals, caused by financial control. I do not mean t h a t any
loose disregard should prevail on the financial side, b u t t h e keynote must
be t h a t ' the job must go ahead.' "

W e are at one w i t h Lord W e i r in agreeing to the urgency of the matter, but

it would of course be impossible to adopt any unconstitutional methods of financing
whereby the Treasury loses control over expenditure. W e have no reason to
believe t h a t Treasury control, adapted to meet the p a r t i c u l a r circumstances, is
incompatible w i t h r a p i d i t y ; the machinery lies to h a n d in the existing Inter-
Service Treasury Committee which has proved most effective d u r i n g the crisis
caused by the Italo-Abyssinian dispute. There will be new types of demands
made, for example not only will there be the usual payments to be m a d e for goods
supplied, but also financial assistance will be needed to help firms to develop t h e i r
manufacturing capacity to meet the orders. This new form of demand will
obviously be of great urgency since until it is met a s t a r t cannot be made.

Organisation of Supply.
45. Whilst the existing machinery for co-ordinating the demands of the
Services must clearly remain in existence, w i t h such modifications as experience
may prove necessary, it has been suggested t h a t the supply side of the W a r Office
will require reorganisation in order to cope with their extremely difficult task.
The Secretary of State for W a r concurs in this view and an examination of t h e
subject has already been begun. W e are particularly glad to record t h a t
Lord Weir has accepted the invitation of the Secretary of S t a t e for W a r to render
his good offices to the W a r Office and to advise them in the same valuable way as
he has already assisted the A i r Ministry.

Priority.
46. W e agree with the recommendation of the Defence Requirements
Committee, which is supported by Lord Weir, that t h a t Committee should be the
final authority on any differences of opinion which may arise on the p r i o r i t y to
be given to different forms of supply, but we are of the opinion t h a t every effort
must be made to reach agreement departmentally or t h r o u g h the P r i n c i p a l
Supply Officers Organisation before having resort to the Committee.

Supervision.
47. W e attach importance to the provision of a p p r o p r i a t e machinery for
watching the development of these plans not only w i t h i n the Government Depart­
ments concerned, but also by the Government itself, so that, where delays occur,
a p p r o p r i a t e action may be taken to remove the causes. W e recommend t h a t the
Cabinet should entrust this duty to ourselves (the Defence Policy and Require­
ments Sub-Committee).
48. Our conclusions on these various matters a r e as follows :—
(a) To approve in principle the general guiding scheme formulated by 19th Recom-
Lord W e i r in his Memorandum (Paper No. D.P.R. (D.R.) 8), a n d to mendation
authorise the Government Departments concerned, in consultation
w i t h Lord W e i r and the Chairman of the Supply Board as required.,
to work out the necessary details without w a i t i n g for Cabinet confir 1

mation. This should include permission to enter on discussion witli

I n d u s t r i a l firms on the basis of long-term contracts, but not to conclude
any negotiation until after the Cabinet has taken its decision. I n
discussion w i t h the professional firms the Government D e p a r t m e n t s
should be a t liberty to explain the general plan of the establishment
and use of a " shadow i n d u s t r y . "
[12683] c 2
 (b) To take note that under Lord W e i r ' s proposals the supplies called for
in the 3-5 years' programmes are to be secured without interference
w i t h or reduction of production for civil and export t r a d e .
(c) T o take note t h a t Sir W a r r e n Fisher and Lord W e i r have seen the
P r e s i d e n t of the Federation of B r i t i s h Industries, who, offering every
possible assistance, have already appointed their own Committee,
which holds itself at the disposal of the Government.
(d) To take note t h a t Lord W e i r is prepared to advise the Secretary of State
for W a r on the problems of reorganisation of the supply side of the
W a r Office required to give effect to Lord W e i r ' s proposals.
(e) T h a t the staff and organisation of the Supply Board Technical
Establishment will require examination as a corollary to carrying out
Lord W e i r ' s recommendation t h a t the existing full-time p a r t should
be associated with the new Munitions Supply D e p a r t m e n t of the
W a r Office.
(/) T h a t L o r d W e i r ' s proposal that the final a u t h o r i t y for p r i o r i t y appeals
should rest w i t h the Defence Requirements Committee should be
approved subject to the understanding t h a t resort should be made first
to the machinery of the P r i n c i p a l Suppby Officers Committee
Organisation.
(g) T h a t the progress of each Defence Service in r e g a r d to its programmes
should be reported monthly to the Sub-Committee on Defence Policy
and Requirements.
(h) I n this connection the Sub-Committee on Defence Policy and Require­
ments should be kept informed of any developments within the
industries concerned (such as incipient disputes in r e g a r d to rates of
wages or apprenticeship) which might endanger the industrial
p r o g r a m m e ; and for this purpose the Sub-Committee should receive
monthly reports from the Ministry of Labour.
(*) T o accept L o r d W e i r ' s recommendation t h a t " the word of the man
responsible for supply must c a r r y , " and to i n t e r p r e t this as meaning
t h a t any necessary authority to go ahead from the Treasury must be
promptly forthcoming without w a i t i n g for settlement of every detail.
I n order to secure r a p i d decisions, use should be made of the Treasury
Inter-Service Committee, the functions of which should in cases of
necessity include cases where it is desired to allow firms to make
arrangements to proceed with manufacture in advance of the
conclusion of a final contract (e.g., making a n outlay for the erection
or a d a p t a t i o n of buildings or obtaining plant). The T r e a s u r y Inter-
Service Committee should have power, where it thinks fit, to deal w i t h
such cases in blocks.

VIII.-MISCELLANEOUS REQUIREMENTS.

Air Raids Precautions.

20th Reeom- 49. W e recommend for adoption the proposals of the Home Office for the
mendation.
provision of Respirators (which has already been accepted by the Cabinet), which
will amount to a possible total of £4,400,000, together w i t h other miscellaneous
items, protective clothing, bleach powder, & c , amounting to some £610,000.

Woolwich, Billingham and A rdeer.

50. Consideration is already being given to an alternative site for Woolwich
Arsenal, a n d Ardeer, though very important, is of less urgency t h a t the serious
problem raised by the concentration at Billingham, undefended and indefensible
from air attack, of the whole of our output of a number of commodities essential
in war.

We agreed—
21st Recom- " To ask Lord Weir to take u p with Imperial Chemical Industries, Ltd.,
mendation.
the problems raised by the exposed position of Billingham, and to make
proposals for ameliorating the situation."
 , . ' . - 9£1
Secret Service. W U J

51. W e endorse the view expressed t h a t an increase in Secret Service funds

is necessary, and, in order t h a t the Treasury may at. once proceed to work out
detailed proposals for the next financial year, we agreed—
22nd Recom­
" To approve in principle the proposals for an increased expenditure on mandation.
the Secret Service."

The Colonies, Dominions and India.

52. The Report points out t h a t financial difficulties in recent years have
resulted in reductions in the forces maintained in the Colonies, M a n d a t e d
Territories, & c , and recommends t h a t consideration should be given to restoring
them to their former strength. I t recommends also t h a t the attention of the
Dominions should be d r a w n to the measures to be taken in this country, and t h a t
their co-operation should be sought i n reducing the burden or alternatively in
increasing the scale of security provided, and, further, t h a t the Government of
India should again be urged to expedite the remedying of their ' ' worst
deficiencies."
W e associate ourselves w i t h all these recommendations, to which we desire to 23rd Reoom­
mendation
draw the special attention of the Cabinet.

IX.—COST AND FINANCE. 4s\

53. The detailed figures for individual items were set out in the various
Tables and Schedules of the Defence Requirements Committee's Report
The very speculative figures there given for the total of Service Estimates,
including the costs of the proposals submitted to us, result for the three Defence
Services in an increased annual expenditure over the £124 million (original
Estimates voted for defence in 1935) of the order of—
£
1936 49,650,000*
1937 86,750,000
1938 102,400,000
1939 88,450,000
1940 90,050,000
and, in addition, an increase in the Home Office vote for A i r R a i d Precautions
*of £1,847,000 a year and a recommendation for increased provision for Secret
Service Avork u p to £500,000 per annum.
54. A s the result of our Conclusions as recorded above, certain reductions
in the above figures will be possible. W e have requested the Service Departments
to work out revised figures in further detail, but, tentatively, it may be said t h a t
the annual increased expenditure (over 1935 Estimates) for the Services will be
somewhat as follows :— jg
1936 ... 50,700,000t
1937 88.800,000
1938 101,500,000
1939 80,500,000
1940 73,000.000

I t will be realised t h a t at this stage it is well nigh impossible to forecast

accurately the incidence year by year of expenditure on the reconditioning of t h e
forces, although the total expenditure required can be estimated w i t h less
inaccuracy. For example, quite a p a r t from the difficulty of estimating future
prices and rates of production, it is obvious t h a t as no orders for additional
material have yet been placed and new firms are not yet prepared for the manu­
facture of the stores concerned, the total sum shown against 1936-37 could
certainly not be spent in t h a t year, and a large carry over would be necessary even
if the programme were authorised in the next few weeks.

* S u b s e q u e n t to the preparation of Naval Table I in t h e a t t a c h e d report t h e Admiralty have

formed a closer e s t i m a t e of their proposed expenditure for 1936 which results in an increase of
£2i million in the figure for 1936 shown above.
f I n c l u d e s provision in 1936, as far as can be foreseen, for t h e special m e a s u r e s connected
with the Italo-Abyssinian d i s p u t e , and the £2^ million referred to in t h e preceding footnote.
 I t should be explained t h a t these figures take into account, not only the
reductions resulting from the conclusions referred to above, but also other changes
in defence expenditure which have taken place since the Tables in the Report
of the Defence Requirements Committee were prepared. Thus, the figure for
1936 includes provision, so far as this can be foreseen, for the special measures
connected w i t h the Italo-Abyssinian dispute, and is also based on the higher
estimate referred to in the footnote of the proposed expenditure in 1936. Certain
other items involving increased expenditure have also been taken into account.
The net result is t h a t the aggregate expenditure for the three years 1936, 1937
and 1938, after t a k i n g into account all these changes, shows an increase of
£ 2 millions over the r a t e of expenditure shown in table I V of the R e p o r t of the
Defence Requirements Committee. A substantial decrease is, however,
shown in respect of the years 1939 and 1940.
55. F o r the present these figures must be taken only as an indication of
the order of magnitude of the expenditure involved. Full details will have to­
be worked out subsequently and agreed with the Treasury.

X.—OBSERVATIONS.

56. W e have no comment to make on the general observations with which

the Defence Requirements Committee conclude their Report, indeed, we are in
general agreement with t h e views there expressed. The amended programme
which we now p u t forward for approval by the Cabinet is, like t h a t of the Defence
Requirements Committee, subject to later modification, in one direction or
another, in accordance w i t h events, and changes in circumstances, which cannot
for t h e moment be accurately foreseen, whether in Europe, the F a r East, or the
Mediterranean. For example, if our situation vis-a-vis I t a l y is to remain on an
unsatisfactory basis, there will be additional responsibilities which all three
Services will' have to face.
57. A programme of this magnitude cannot be completed without the
co-operation of all the Departments of State, including those indirectly affected,,
and we agreed— . ;

24th Recom (a) To endorse the recommendations of the Defence Requirements Committee,,
mendation.
inviting the co-operation of all Departments of State in the rehabili­
tation of the Services and directing attention, in particular, to the
desirability of the M i n i s t r y of Labour relaxing existing restrictions
on recruiting facilities at Unemployment Exchanges, t r a i n i n g camps
and centres.
(b) That the attention of the Ministry of Labour, as well as of the other
Departments mentioned by the Defence Requirements Committee,
should be d r a w n to the necessity of improving the physical s t a n d a r d
of the population, //

58. The programme is, in our opinion, the best t h a t can be devised to meet
the circumstances as they are to-day and, w i t h i n the limits of human foresight,
as they may develop. I t was prepared for us by a very strong Committee with
the best technical advice available, and even if circumstances should change, or
fresh strategical considerations should emerge, we do not anticipate t h a t the value
of the recommendations which we are making to the Cabinet on the basis of the
Report of the Defence Requirements Committee is -likely to be modified.
Accordingly, we recommend the Cabinet to adopt the Report subject to the
^atUm"" modifications which we have proposed.
Initialled on behalf of the Sub-Committee :
S. B. (Chairman).

2 Whitehall Gardens, S.W. 1,

February 12, 1936.
 ANNEXE A.

Composition of the Committee on Defence Policy and Requirements for the

examination of the Report by the (Official) Defence Requirements Committee : —
The P r i m e Minister (Chairman),
The Lord President of the Council,
The Chancellor of the Exchequer,
The Secretary of S t a t e for Foreign Affairs,
The Secretary of S t a t e for W a r ,
The Secretary of State for Air,
The F i r s t Lord of the A d m i r a l t y ,
. The President of the Board, of Trade,
The R i g h t Honourable L o r d Weir, G.C.B.,

to whom were later added—

The Secretary of State for Home Affairs.
The Minister without Portfolio.

Technical Advisers—
The F i r s t Sea Lord,
The Chief of the I m p e r i a l General Staff,
The Chief of the A i r Staff,

and also—
The Permanent Secretary to the Treasury,
The Permanent Under-Secretary of State for Foreign Affairs.

ANNEXE B.

The Strategical Importance of the Low Countries.

Extract from a Report by the Chiefs of Staff Sub-Committee:-

JA. -At. JL. Jf.

w -rr -TV" -7f- ny

' ' I m p o r t a n t as the Low Countries are to us in relation to sea power, they are­
even more important in relation to a i r power. W a r in the air, like w a r on land or
on sea, is largely a matter of time, distance and administration. A n i m p o r t a n t
factor in determining the weight of attack which a given a i r force can deliver is
the distance of its air bases from vital objectives. If the Germans were to succeed
in over-running the Low Countries a n d in establishing a i r bases near the D u t c h
or Belgian coasts, not only London but the whole of the industrial centres of the
Midlands and North, as well as our shipping approaching the coasts, would be
within effective a n d even decisive range of air attacks. The short range would
enable those attacks to be heavy, continuous a n d sustained a n d would not allow
time for the interception of the enemy's a i r forces.
If, on the other hand, the integrity of the Low Countries, which implies t h a t
of Holland as well as of Belgium, were maintained, the Germans would be forced
to initiate attacks by air at a distance of some 300-350 miles from London alone.
The distance from the North and the Midlands and from our shipping approaching
the Western ports would be even greater. The frequency and intensity of attacks
would automatically be reduced and w a r n i n g would be obtained of attacks by
aircraft flying direct across territory in our occupation."
4tr , ' ..V. . ' 'JL -ii- OA.
I W "TV TV "VT -TV"
[ D . P . R . (D.R.) 8.] ANNEXE C.

INDUSTRIAL PRODUCTION.

Memorandum by Lord Weir.

A s promised, I have discussed w i t h the P r i n c i p a l Supply Officers certain
aspects of the measures recommended in the Report for organising increased
industrial production, and I have further crystallised my own views and now
outline my general conclusions.
P a r a g r a p h s 89-100 set out some of the considerations concerned with
I n d u s t r i a l Production. I n principle I agree w i t h them, but it may be of value
if I re-arrange, elaborate and modify them into the form of a Statement of the
Problem, and a General P l a n for its solution to serve as a guidance scheme, which,
if approved by the Committee, may enable all concerned to take action.

The Problem.
The problem is dual in character. F i r s t we have to decide on the most
effective steps to secure the production of approximately £x millions of w a r
material, mainly engineering in character, in a term expressed as 3 / 5 years, such
production to be in excess of to-day's r a t e of expenditure on similar products.
Secondly, but in some degree concurrently, we have to make the necessary
arrangements for t h e turnover of I n d u s t r y to w a r conditions on a n emergency.
This differentiation must be clear in the minds of all concerned. The first
problem clearly calls for priority of action, but it is obvious t h a t every step taken
to solve it will vastly facilitate the solution of the second.
The Supplies called for in the 3 / 5 years' programmes are t o be secured
without interference w i t h or reduction of production for civil a n d export trade.
W e have to obtain-this excess production under peace-time conditions, and
with the Engineering I n d u s t r y already operating as a whole under busy
conditions.
A rough estimate shows t h a t the excess Supplies under the programmes will
require the employment of an additional 120,000 men in Engineering, Ship­
building, Chemical and Metallurgical Sections of I n d u s t r y .
Such is an outline of the novel and difficult task set to the Services and the
sections of I n d u s t r y concerned.

The General Plan.

Existing Sources of Supply.
There are only two categories of these—
(a) The Professional Armament Industries, i.e., those p r i v a t e industrial
units whose regular business i t is to supply t h e peace-time needs of t h e
Services.

Examples :—
Naval Shipbuilders and M a r i n e Engineers.
A i r f r a m e and Aero-engine makers.
Vickers, L C I .
(&) State Factories, such as Woolwich, Enfield and the Dockyards, operated
by the State under the direction of the Services.

The needs of the programmes, in particular the army programme, in some

degree the A i r programme, and in a much smaller degree the Naval programme,
call for supplies on a scale which cannot be met even by the fullest expansion of
these sources, and there is no alternative but to have recourse to the general
Engineering units of the country as a new and additional source of supply.
For the provision of the needs of the 3 / 5 years' programme in the first place,
and, secondly, as a structure on which to plan for w a r needs, we have now to
create what has been called a " Shadow Munition I n d u s t r y . "
 Policy on Each Source of Supply.
As regards the Professional I n d u s t r y , the fullest encouragement must be
given for expansion of production facilities in each case, an expansion only
limited by considerations of efficiency of control and administration.
Such expansion should be a r r a n g e d on a variety of bases varying from
normal expansion by the firms on their own account—financially assisted
e x p a n s i o n - n e w facilities p a i d for by the State and operated by the firm on behalf
of the State.
Unless under very exceptional circumstances, no encouragement should be
given to the creation of entirely new p a r e n t units of a professional n a t u r e .
As regards State Factories for classes of product for which such factories
are essential, the policy should be to expand them in size and in number. Here
care should be taken in location of new factories to ensure t h a t ultimately they
may take the place of the old plants now in real danger areas.
The Policy for the Shadow Industry.
The original conception of this was designed to deal w i t h the p l a n n i n g
in peace time for the turnover of I n d u s t r y in W a r . Now, the demands of the
present 3 / 5 years' programmes involves not the p l a n n i n g of a shadow, but a
substantial degree of creation of the reality behind the shadow.
The general conception is t h a t existing firms w i t h good organisation who do.
not manufacture warlike stores will be selected and invited to a r r a n g e for the
manufacture of such stores, first, for the present emergency, and, secondly, on the
outbreak of war. -
I t must be clearly appreciated t h a t at this moment in most cases the pro­
duction facilities of selected firms are busily employed on civil or export trade.
I n such cases, the firms will be invited to create new facilities on an agreed
scale to enable them to produce for this emergency. They will also be asked to.
prepare plans for utilising their existing facilities for producing warlike stores
in the event of war.
The particular circumstances will vary in connection w i t h every firm and
w i t h different types of product and wide elasticity of a r r a n g e m e n t s must be
provided for, but the underlying principle is t h a t each selected firm will agree
to use its organisation and commercial structure to set up some measure of
munition production and thus create the " Shadow I n d u s t r y . "
The simplest and most direct example might be as follows :—
The W a r Office Supply D e p a r t m e n t (with the approval of the P r i n c i p a l
Supply Officers Organisation) will select an engineering firm and say to i t :
" W e desire you to utilise, rent or build sufficient factory floor space to house
the facilities for producing X shell per week. W e desire you. to design a layout
for the essential machinery and equipment. W e wish you then to purchase
and obtain this equipment on the scale of Y per cent., capa,ble of
producing Y per cent, of the ultimate w a r output, and we desire
you to make the necessary tools, jigs and. fixtures. We then wish you
to proceed with the execution of shell contracts a t the Y per cent, r a t e to
meet the present emergency and when these needs are met, we desire you to hold
these buildings and equipment for the State on a care and maintenance basis.
The State will pay you for all your outlays a n d will remunerate you for t h e
supervising and operational functions which you have discharged on the basis
of some form of fee or commission." The engineering firm will r e g a r d these
facilities as State-owned, but operated by the firm as and when required by the
State.
A more complicated case will arise where the firm may already possess p a r t
of the necessary facilities and only require to instal w h a t might be called
" balancing " facilities.
A further example might be where the firm might say t h a t they possessed
idle facilities at the moment which with a few balancing machines would enable
them to actually accept a contract on more normal commercial lines.
The P l a n thus contemplates three sources of supply comprising the
professional armament units and the State factories with their respective
expansions and the " Shadow I n d u s t r i e s . "
There is an apparent inconsistency in r e g a r d to Aircraft supply, where the
national policy up till now has been to encourage the whole expansion being
carried out by the professional industry. The reason for this is t h a t in r e g a r d
to aircraft it was felt that, first, the industry was a weak one out of keeping
w i t h national needs, and secondly, an industry w i t h a definite civil future, and
accordingly, it appeared wise to encourage its development now for m i l i t a r y
purposes in the knowledge t h a t the expenditure would not be a national waste
on account of future civil possibilities.
However, the new programme of A i r needs will necessitate even here some
measure of application of the " Shadow Scheme."
Furthermore, it must be clear t h a t the application of the ' ' Shadow Scheme ' '
may, in some cases, t a k e place not only w i t h selected non-armament firms, but
also with units of the professional industry. There will arise some cases where
a professional firm may be asked to lay down new production facilities in excess
of its own legitimate aspirations, and the firm may be asked to create these and
hold and operate them for the State.

Co-operation and Collaboration with Industry.

Success in this P l a n can only be effective by the most direct contact a n d
collaboration between the State Departments and I n d u s t r y .
In dealing w i t h this, we have to think not only of i n d u s t r i a l units having
individual contact as direct suppliers w i t h t h e Service Supply Departments, but
also of those sections and units of industry who supply direct contractors w i t h
equipment, semi-finished and r a w materials. The Machine Tool Industry, the
Steel I n d u s t r y and the makers of stampings and forgings are examples of this.
British I n d u s t r y is so complex t h a t it is not organised as a whole in any
really effective sense. On the other hand, through Federations a n d T r a d e
Organisations it is fairly well organised in t h e different sections.
Fortunately, the P l a n has only two considerations which are sufficiently
general as to even merit consideration of central handling.
The first is the general goodwill of industry towards the Plan, and the
second is the question of safeguards against excessive profits or prices.
On both these points, it might be wise to meet a small and authoritative
Committee of the Federation of British Industries and to give them a general
picture of the Problem and the P l a n , and thus evoke their goodwill. P e r h a p s on
the general question of excessive prices, they might be able to make useful
suggestions.
The really effective and essential contact and collaboration must take place
on lower r u n g s of the ladder.
On all practical problems which arise, the contact must take place, as regards
direct contractors, between them and the Supply Departments, and as regards
secondary and ancillary sections of I n d u s t r y with small Committees appointed
w i t h i n the sections, usually by the T r a d e Organisations.
A few typical examples of such Committees and other essential contacts is
annexed.
W i t h the Professional I n d u s t r y contact will be direct with the individual
u n i t as obtains to-day.
W i t h the selected firms under the Plan, the contact should also be direct.
The essence of success will lie in making the contacts as direct as possible
between the Supply Departments and Industry, considered either as u n i t s or in
sections, and any further organisation arising out of the P l a n should, so far as
possible, be left to I n d u s t r y to carry out.

The State Side.

So far as I can see, it will be wiser to develop and a d a p t the existing supply
machinery of the Services—to handle the new problems r a t h e r t h a n to a t t e m p t to
create any new Central Government Supply Machine.
Accordingly, the main executive responsibility for action and i n d u s t r i a l
contact must rest with the Supply Departments of the Services.
I t is for them to formulate their programmes quantitatively and qualitatively
a n d to plan and negotiate w i t h the various sources of production.
In p a r a g r a p h 92, the Report gives certain conditions essential for action under
t h e Plan. The first is : " Approval of a long-term programme of rearmament."
I assume this Committee is now recommending to the Cabinet t h a t approval be
given to the Service programmes to the extent covered by decisions now being
taken by the Committee, and t h a t the Services will then take action to implement
the programmes.
My investigation makes i t clear t h a t the task devolving on the W a r Office
will be an exceptionally heavy and difficult one. T h e needs of the A d m i r a l t y
will largely be met by their own Professional Contractors with whom t h e i r
Supply and Contract procedure and practice is well established.
The A i r Ministry, although now faced w i t h further new responsibilities,,
have had some months of expansion experience and a r e a d j u s t i n g their Supply
practice to meet t h e new conditions.
However, at the W a r Office, they have now to face an entirely novel task for
which their Supply Machinery has not been designed, and, in my view, is quite­
unsuitable. They have to undertake the task of t u r n i n g the " Shadow P l a n " in
all its novelty into a reality.
P a r a g r a p h 92 (d) says—
" G r e a t e r recourse will be necessary to non-competitive contracts..
Generally, greater elasticity may be necessary in contract procedure."

These remarks give an entirely insufficient and inadequate picture.

My considered opinion is t h a t there must come into existence at the W a r
Office a Munitions Supply Department covering every phase of Supply, able
not only to buy something which someone makes and desires to sell under normal
commercial procedure, but a D e p a r t m e n t w i t h sufficient technical, production,
inspectional, commercial and financial experience, coupled w i t h the spirit of
" d r i v e , " to enter into and settle promptly, effective business negotiations with,
for example, 100 selected firms under which these firms will, mainly in a spirit of
national service, create new and a d a p t existing facilities to enable them to supply
highly technical products of which they have perhaps no previous experience. I n
addition to this, t h e Department must make the fullest use of the Professional
sources of Supply a n d be responsible for the State Factories a n d their expansion.
I n my view, this is the crux as regards immediate constructive action.
Somehow the W a r Office will have to a d a p t and r e a r r a n g e its internal machinery
so t h a t it will have a Munitions Supply D e p a r t m e n t w i t h a H e a d responsible
for Munitions Supply in every phase, and responsible as a member of the A r m y
Council to the Secretary of State for c a r r y i n g out this programme.
To this, I would add the recommendation t h a t the existing full-time p a r t
of the Supply Board Organisation, which at the moment h a s as its main function
the arrangements for w a r preparations, should, at least for a period, be associated
w i t h this new Munitions Supply D e p a r t m e n t of the W a r Office.

Considtation and Collaboration with Labour.

As with Industry, I suggest t h a t consultation w i t h Labour as a whole,
involving a large conference with the Trades Unions, should be avoided as likely
to create a crisis type of atmosphere.
I recommend t h a t reliance be placed on the good working of the Employers
and Trades Union machinery which exists in the different sections of I n d u s t r y
and which provides for the fullest consultation on questions likely to arise. The
emergence of real difficulties will be g r a d u a l and the fullest opportunity should
be given to their settlement within the industries prior to any form of Government
intervention.
Co-ordination—Avoidance of Departmental Competition—Allocation of Firms—-
Priorities.
These functions should be discharged by the P.S.O. organisation and t h e
Supply Board.

Priority Appeals.
These should be dealt with by Sir Maurice Hankey's Committee.

Prevention of Excessive Profits.

This is a danger from both the political and production standpoints. T h e
taxpayer must be conscious that his interest is safeguarded. Labour must feel
[12683] . D 2
t h a t exploitation will not be permitted, and finally, the contractor i n entering
into new commitments must do so with the confidence and enthusiasm t h a t he w i l l
also be given a square deal.
The arrangement at the A i r Ministry under which the Contracts B r a n c h
has associated with it a small Committee of well-known and experienced business
men is probably the best system for dealing with the new conditions, and I endorse
the recommendation of the Report t h a t the A d m i r a l t y and W a r Office should
adopt such a scheme.
This system applies only to direct Departmental contracts, but in the sphere
of ancillary and sub-contracts to which the State is not a party, the problem of
control is much more difficult, and I doubt whether it is possible to meet t h e
danger to the fullest extent.
I n the case, for example, of Steel or Machine Tools, I suggest t h a t the Board
of T r a d e and the Treasury should deal w i t h the small Committee of their
individual sections already referred to, and where there are no Committees, deal
direct with the larger independent units, and invite them to suggest how these
sections and units would themselves propose to control their own prices in the
national interest.
If this step is not successful, I confess my inability to suggest any further
step, as any general action to be effective would mean full price control, a step
which in peace time I would regard as quite impracticable.

Financial Control.
To achieve the programmes under the Report, the Supply Departments a n d
contractors will be working against time. Decisions instructing new contractors
to proceed with the creation of new facilities and prepare themselves for
production must inevitably be given by the Technical Supply Staff prior to any
meticulous settlement of the financial details.
I n this sense, the conditions are in some measure akin to W a r conditions.
The word of the man responsible for Supply must carry, and the spirit a n d
enthusiasm which he has evoked in the c o n t r a c t o r ^ mind must not be chilled by
delays of approvals, caused by financial control. I do not mean t h a t a n y loose
disregard should prevail on the financial side, but the keynote must be t h a t " t h e
job must go a h e a d . " A f t e r this is secured, all the essential financial supervision
can be properly initiated.

Progress.
T h e new enterprise launched by general approval of D.R.C. 3 7 is so vast
as to call for continuous supervision of its progress in every phase, a n d the
necessity of each Service holding weekly meetings to review progress a n d deal
with difficulties which arise should be commended to them.
F u r t h e r , it would appear necessary t h a t some arrangement be made under
which the progress of each Service in regard to its programme should be reported,
say, monthly to Sir Maurice H a n k e y ' s Committee.
The basis of all Progress Reports should come from a special Supplies
Statistical Section set u p in each of the Supply Departments, which will regularly
relate promises with performance.

General.
A t this stage, no one can assess definitely whether or not these programmes
can be met in the time.
Probably the Naval and A i r needs can be met to a large extent, but the
W a r Office needs, reduced though they may be by the decision of this Committee,
still remain a doubtful problem.
The W a r Office requirements necessitate the building up of new production
facilities before output can commence on any real scale, a n d the fruits of this
work can only be gathered in the later years of the period.
The essential output rate can ultimately be achieved, but there will be serious
deficits in the early stages.
 All concerned should at every stage keep closely in their minds an apprecia­
tion t h a t the following major troubles will seriously affect the early stages of
progress :—
(a) T h e t r a i n i n g of skilled labour.
(b) Securing reasonable efficiency in organisation a n d in production methods
to avoid the waste and misuse of existing skilled labour.
(c) Delays and frictions between contractors and Supply Departments
arising out of technical a n d design difficulties, modifications a n d
changes in design.
I n the case of Technical Supply, when the time factor is vital, i t is most
essential in formulating specifications to ensure t h a t no design or type is adopted
which has not been tested both in use and in production, and, however creditably
anxious the Technical Departments may be to obtain supplies representing " the
last word in design," such a policy is generally associated w i t h grave and
i r r i t a t i n g delays.
The ' ' very l a t e s t ' ' is not possible when w o r k i n g against time.
(Signed) WEIR.

January 27, 1936.

A P P E N D I X TO A N N E X E C.

Preliminary List of Sections of Industry with which Early Contact should be

A rranged.
Suggested Committees :—
Machine Tools.
The President, Mr. W . B. L a n g .
Sir Alfred Herbert.
Another.

-Steel.
Sir A n d r e w Duncan. ,
Sir William Larke.
Another.

Alloy Steels.
Ask Lord Riverdale to nominate the Committee. These Committees to act
as the only contact between their respective sections of industry and the Govern­
ment Supply Departments on general questions and problems arising out of the
P l a n and the Programmes.

Engineering Employers' Federation.

Although organised mainly for labour questions, it will be essential on
account of the engineering industry as a whole being the one mainly affected, to
ask the Federation to appoint a small Contact Committee, including their
President, Sir J o h n Siddeley, and their Chairman, Mr. Ramsay, and t h a t they be
advised of the Problem and the P l a n .
[ I . P . C . 4.] A N N E X E D.

REPORT OF S U B - C O M M I T T E E ON I N D U S T R I A L PRODUCTION.

1. T H E Sub-Committee on I n d u s t r i a l Production of the Committee of

I m p e r i a l Defence was appointed in accordance with Conclusion- xii of the
Minutes of the 8th Meeting of the Sub-Committee on Defence Policy and
Requirements, held on the 30th J a n u a r y , 1936. I t s composition is as follows :—
The Chancellor of the Exchequer (Chairman).
The Lord P r e s i d e n t of the Council.
The Secretary of State for Air.
The President of the Board of Trade.
Lord Weir.
The Sub-Committee's terms of reference are :-—
" To investigate the question of what arrangements should be made to
provide against excessive profits being made by contractors, having r e g a r d t o
the political considerations (including the statement on the subject in the
Government's General Election Manifesto), the importance of obtaining the
goodwill of the contractors, and other factors in the problem."
2. W e understand t h a t our inquiry is to deal only w i t h the arrangements
for the increased production of armaments contemplated d u r i n g the next three
to five years. W e further understand t h a t the principal question on which our
recommendations are desired is whether it is necessary t h a t the Defence D e p a r t ­
ments should have the r i g h t to inspect the books of armaments contractors; and,
if so, whether t h a t r i g h t should be secured by Act of P a r l i a m e n t or obtained by
voluntary agreement.

The sources of supply during the peHod of expansion.

3. The sources of supply on which the Defence Departments will have to
rely d u r i n g the period of expansion are as follows :— 1

The State Factories.—With these we a r e not concerned.

The Professional Armament Industries, t h a t is, the private industrial u n i t s
whose regular business it is to supply the peace-time needs of the Services.
The " Shadow " Industry, t h a t is, the section of private industry which will
be selected to instal and operate additional p l a n t on behalf of the State d u r i n g
the next three to five years, and which will receive State payment for its outlay.
W e understand t h a t it is intended to select existing firms with a good organisation,
which do not normally manufacture warlike stores.
Industry of mixed ownership, t h a t is, cases where a " shadow " firm already
possesses p a r t of the necessary equipment, but will, need further equipment a t
the expense of the State.
Ancillary industries acting as sub-contractors to the classes of industry
already mentioned.

The need for a right of inspection.

4. The circumstances will be unique—the State will be working against
time, in conditions of g r e a t difficulty. The situation will be complicated by t h e
number of sources of supply, by the impossibility of fixing prices in advance, by
the difficulty of exercising control over sub-contractors, and by the necessarily
non-competitive character of the arrangements. Difficulties have already been
encountered in the comparatively restricted industrial field affected by the present
expansion of the Royal A i r Force, and these difficulties are certain to be multiplied
in the case of the new contracts, which will make much wider demands on industry.
Is there any alternative to a r i g h t of inspection which will provide against
excessive profits while retaining the goodwill of m a n u f a c t u r e r s ; and, further,
will reassure public and P a r l i a m e n t a r y opinion that excessive profits are not being
made ?
 I n our view there is no doubt t h a t it will be necessary for the Defence
Departments to have the r i g h t to inspect books. P a r l i a m e n t a r y considerations
alone would be decisive in favour of this course.

Statutory or voluntary right of inspection.

5. I t is less clear whether the r i g h t to inspect should rest on an Act of
Parliament or should be obtained by voluntary agreement. A good case can be
made out for statutory powers—not t h a t the law would be invoked in the majority
-of cases; it would remain in the background as an indication to firms t h a t they
would gain n ^ h i n g by making difficulties over the inspection clauses of their
contracts. On the other hand, it seems to us t h a t the arguments for the voluntary
method are more compelling. The expansion of armaments itself is to proceed on
a peace footing; there is to be no declaration of a state of emergency, and no
commandeering. Except for the limited p a r t which can be played by the State
factories, the plan will stand or fall by the voluntary co-operation of industry.
I t is imperative, then, t h a t nothing should be done to offend industrialists or give
them an excuse for declining to undertake the manufacture of armaments. I f
refusals were to occur on any considerable scale, as a result of statutory powers
of inspection having been taken, the Government would suffer a loss of prestige,
and the goods might not be obtained in time.
6. The French and U n i t e d States precedents do not appear to us, in so far
as we have had time to examine them, likely to assist in the solution of our own
difficulties.
7. We recommend, then, t h a t the r i g h t to inspect should not be obtained by
Act of P a r l i a m e n t , but should be secured by the voluntary acceptance by firms
of a suitable clause in their contracts. Acceptance of inspection should, where
necessary, be made a sine qua non- of p a r t i c i p a t i o n . W e recommend also certain
-other non-statutory safeguards against excessive profits, as follows :—­
(a) The establishment of Committees of the Lever type at the W a r Office and
Admiralty, associated w i t h the Contracts Branches and acting as referees.
(&) I n certain cases of articles difficult to price, a maximum price, with the
addition of a costings c l a u s e a n d a referee :s decision.
(c) No encouragement to be given to the creation of new professional
armaments units.
(d) The full development of the ' ' shadow ' ' scheme, all outlays being audited
o n behalf of the State by t r a d e accountants. No trouble should arise here, since
the non-commercial portion of the books only will be inspected, and this is, in
fact, the property of the State.
(e) A s regards sub-contractors, who will have no direct relationship with the
State, a small committee should be set u p by each large u n i t of industry affected,
e.g., steel, machine tools, alloy steels, &c.
W e do not think t h a t i t will be desirable for Departments to volunteer to
these committees any definition of overcharging. The better plan will be to invite
the committees themselves to make proposals for the control of prices. The terms
-of reference of the committees might be on the following lines :—
" A Committee representative of the industry, whose function it would
be to insure t h a t the Government Departments and their contractors are
charged reasonable prices, and who would be prepared to justify to the
Departments the prices charged."
(/) A general assurance should be obtained from the Federation of B r i t i s h
Industries t h a t industry will control its own prices in the national interest and
in a spirit of non-exploitation.
W e consider t h a t the various non-statutory safeguards which we have set
out should together constitute an effective scheme of precautions against excessive
profits—though we do not claim t h a t no loop-holes can be discovered in it—and
we think t h a t the scheme is likely to prove acceptable to P a r l i a m e n t a r y and
public opinion.
Summary of Recommendations.
8. Our recommendations to t h e Cabinet may be summarised as follows : —
(i) I n order to prevent the m a k i n g of excessive profits d u r i n g the contem­
plated expansion in armaments of the next three to five years, i t will
be necessary t h a t Defence Departments should have the r i g h t t o
inspect the books of all firms u n d e r t a k i n g direct armament contracts.
(ii) The r i g h t to inspect should not be statutory, but should be obtained by
the voluntary acceptance by firms of a suitable clause in their
contracts. Acceptance of inspection should, where necessary, be m a d e
a sine qua non of participation,
(iii) W e recommend t h a t further non-statutory precautions should be taken,
as detailed in p a r a g r a p h 7 of the present Report. I n particular, as a
safeguard against the m a k i n g of excessive profits by sub-contractors,
a committee should be set u p by each large u n i t of industry affected,
whose function it will be to insure t h a t Government Departments and.
their contractors are charged reasonable prices.

Signed on behalf of the Sub-Committee :

(Signed) N. C H A M B E R L A I N , Chairman.

2 Whitehall Gardens, S. W. 1,
February 6, 1936.
THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTVS GOVERNMENT

2R7
TO B E K E P T UNDER LOCK AND KEY. ' U

I t is requested t h a t special care may be t a k e n to

ensure the secrecy of this document.

MOST SECRET.
Enclosure to COPY NO..
C P . 26(56).

C A B I NET.

PROGRAMMES OF THE DEFENCE SERVICES.

The attached Report by the (Official) Committee on

Defence Requirements of the Committee of Imperial Defence,
together with Schedules, is circulated in accordance
with Cabinet 6(56), Conclusion 1(b).
The covering Report of the Ministerial Committee
on Defence policy and Requirements will he circulated
separately tomorrow.

(Sgd. ) M.P.A. HANKSY.

Secretary to the Cabinet.

2, Whitehall Gardens, S.W.1,.

12th February, 1956.
 Printed for the Committee of Imperial Defence. t November 1935.

SECRET. Copy No.

COMMITTEE OF I M P E R I A L DEFENCE.

DEFENCE REQUIREMENTS SUB-COMMITTEE.

NOTE BY THE CHAIRMAN.

I N forwarding the attached Report on Defence Requirements I am

asked by my colleagues on the Sub-Committee to d r a w attention "to a point
which arises in connection w i t h the recommendation in p a r a g r a p h s 32-34
t h a t the Government should adopt in principle a new s t a n d a r d of Naval
strength enabling us to place a Fleet in the F a r E a s t fully adequate to act
on the defensive and to serve as a strong deterrent against any t h r e a t to our
interests in that p a r t of the globe, and a t the same time to m a i n t a i n in all
circumstances in Home W a t e r s a force able to meet the requirements of a
w a r w i t h Germany.
2. The point to which the Sub-Committee desire me to d r a w attention
is the bearing of this new s t a n d a r d on the coming Naval Conference. I t
appears very doubtful whether the Government will have time to reach a
decision on the subject before the Conference opens on the 6th December.
I n any event it would undoubtedly cause great difficulties in the Conference
and militate against its success if, in the course of the proceedings, the
United Kingdom Delegates were to announce an intention to increase our
Naval strength.
3. The United States Government has already been warned
confidentially d u r i n g the preliminary Conversations t h a t it may be necessary
for us to increase our r a t e of construction of Capital Ships owing to the
uncertainties of the international situation, and t h a t we now aim a t a
strength of 70 Cruisers.
4. W e consider t h a t d u r i n g the forthcoming Naval Conference i t is
vital to avoid any commitments as to the ultimate Naval strength a t which
we shall have to aim, i n view of the continued uncertainties of the inter­
national situation which may compel us a t some later date to increase our
strength in the various categories.
5. T h a t course would a p p e a r sufficient for the present, as, for reasons
explained in the Report, material considerations prohibit the implementation
of the new standard except to a very minor extent during the next three or
four years.
(Signed) M. P . A . H A N K E Y
2 Whitehall Gardens, S. W. 1,
November 21, 1935.
i H270
 THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT
— . —: . -—. . m

Printed for the Committee of Imperial Defence. November 1935

MOST S E C R E T Copy N o .

D.R.C. 3 7

TO B E K E P T UNDER LOCK AND KEY.

It is requested that special care may be taken to

ensure the secrecy of this document.

COMMITTEE OF IMPERIAL DEFENCE

DEFENCE REQUIREMENTS SUB-COMMITTEE

Programmes of the Defence Services

THIRD REPORT

Volume I
(Previous Reports: D.R.C. 14 (also CP. 64 (34)) and D.R.G. 25 (also D.P.R. 12))

2 Whitehall Gardens, 8.W. 1,

November 21, J.935

12270
 CONTENTS.

Page
I.—Introduction ... ... ... ... ... 4
II.—The International Situation 5
T H E EFFECT OF COLLECTIVE SECURITY ON DEFENCE QUESTIONS ... . . . . . . 5
THE RELATIONSHIP BETWEEN FOREIGN POLICY AND DEFENCE ... ... ... 7
THE NEED FOR INCREASING OUR DEFENSIVE ARMAMENTS ... ... : 8

III.—Defence Requirements (General) ... 9

STANDARDS OF SECURITY AIMED AT ... 11
In the case of the Navy ... 11
In the case of the Army ... 11
In the case of the Air Force 11
For all three Services 12

IY.—Navy Programme and Requirements 12

(a) PROGRAMME ... ... ... ... 12
B A S I S OF THE CONSTRUCTION PROGRAMME 12
THE DIFFICULTIES OF RAPID EXPANSION 12
IMMEDIATE POLICY 13
CAPITAL SHIPS 13
AIRCRAFT CARRIERS 14
CRUISERS 14
DESTROYER LEADERS AND DESTROYERS . . . 14
. SUBMARINES, SLOOPS AND SMALL CRAFT 14
COST ... ... ..." ... ... 14
COMPLETED SHIPS ... 15
(b) DEFICIENCIES 15
PERSONNEL 16
FLEET AIR ARM 16
POSSIBLE N E W MEDITERRANEAN B A S E . . . 17
GENERAL ... ... ... ... ... 17

Y.—Army Programme and Requirements ... ... 17

THE FIELD FORCE ... ... ... 17
THE TERRITORIAL ARMY ... 18
AMMUNITION ... ... ... ... ... ... ... ... ... 18
COAST DEFENCE ... .... ... ... ... ... ... ... ... ... 18
(a) Singapore .... ... ... ... ... ... ... . i . ... 18
(b) Plong Kong, Aden, Ceylon and Penang ... ... ... ... ... 18
(c) Mal,ta, Gibraltar and Freetown ... ... ... ... ... ... 19
(d) Home Ports ... ... ... ... ... 19
AIR DEFENCE OF GREAT BRITAIN ... ... ... 19
N E W INFANTRY BATTALIONS ... ... ... 19
EE-EQUIPMENT OF FIELD ARTILLERY ... ... ... ... 19
IMPROVEMENT IN HOUSING ... ... ... ... ... ... — ... - 20
EECRUITING ... ... ... ... ... ... ... ... ... 20

YI.—Air Force Programme and Requirements 21

(a) S i n g a p o r e . . . ... ... ... ... ... ­ ... ... 22
(6) Penang, Ceylon and Aden ... ... ... ... ... ... ... 22
, (o) Hong Kong 22
(d) Middle East ... ... 22
(e)Malta ... ... ... ... ... ... ... ... ... ... 22­
(/) West Africa 23
(g) East Africa 23
(h) West Indies ... 23
(i) Gibraltar ... ... ... ... ... ... ... ... 23
SEA EECONNAISSANCE ... ... ... ... ... ... ... ... ... 23
PROVISION DEPENDENT UPON INTERNATIONAL SITUATION ... ... ... ... 23
W A R RESERVES Y
... ... 24
(i) Material ... . ... ... ... ... ... 24
(ii) Personnel ... ... ... ... ... ... ... 25
YII.—Industrial Production ... ... 25
SHADOW ARMAMENT INDUSTRY ... ... ... ... ' ... ... ... ... 25
CONDITIONS NECESSARY 26
(a) The Provision of Additional Machinery, &c ... ... 26
(6) Co-operation of Industry: and Method of Collaboration ... ... ... 26
(c) Provision of Labour ... ... ... ... ... ... ... ... 27
(d) Prevention of Profiteering ... ... .... ... ... ... ... 27
(e) Allocation of Firms to Defence Departments ... .... ... ... 27
MANUFACTURE IN GOVERNMENT FACTORIES ... - ... ... ... 27
Cost of Measures Eecommended ... ... ... ... ... ... ... 28
STATE OF PREPAREDNESS ACHIEVED BY 1 9 3 9 WITHOUT^ SPECIAL MEASURES TO
INCREASE FACTORY OUTPUT ... ... ... ... ... ... ... 28
RECAPITULATION ... ... ... ... ... ... ... ... ... ... 29
YIII.—Miscellaneous Requirements ... 29
AIR EAIDS PRECAUTIONS . . . ... ... ... ... 29
WOOLWICH, BILLINGHAM AND ARDEER ... ... ... ... ... 30
SECRET SERVICE ... ... ... ... ... ... .... ... 30
ARMED MERCHANT CRUISERS AND DEFENSIVELY EQUIPPED MERCHANT S H I P S ... 30
ENCOURAGEMENT OF COMMERCIAL AIR ENTERPRISES . . . ... ... ... ... 30
FORCES IN THE COLONIES . . . ... ... - ... 31
THE DOMINIONS ... ... ... ... ... ... 31
THE EEMEDYING OF DEFICIENCIES IN INDIA . . . ... ... ... 31

IX.—Cost and Finance 31

EXPENDITURE IN FOREIGN COUNTRIES ... ... ... ... ... ... 32
Japan ... ... ... ... ... ... ... ... ... ... .... 33
United States of America ... ... ... ... ... ... ... ... 33
France ... ... ... ... ... ... ... ... ... ... 33
Germany ... ... ... ... ... ... ... ... ... 33
X.-Observations ... 33
THE DIFFERENCE BETWEEN THIS ENQUIRY AND THAT OF 1 9 3 4 ...- 33
TENDENCIES OF THE FUTURE ... ... ... ... ... ... ... ... 34
MARITIME POWER . . . ... ... ... ... . ... ... ... ... ... 34
THE UNCERTAINTY OF THE FUTURE ... ... 35
THE DANGER OF SUDDEN ATTACK (PARTICULARLY BY AIR) ... ... 35
T H E IMPORTANCE OF PUBLIC MORALE . . . ... ... ... 36
CO-OPERATION OF GOVERNMENT DEPARTMENTS . . . ... ... ... ... ... 36
CONCLUSION ... ... 37

XI.—Summary of Conclusions and Recommendations 38

Navy ... ... 39
Army ... ... ... ... ... ... ... ... ... ... 39
Air Force ... 39
For all Three Services ... ... ... ... ... ... ... ... 39
NAVY PROGRAMME AND REQUIREMENTS . . . ... ... ... ... ... ... 40
ARMY PROGRAMME AND REQUIREMENTS- . . . ... ... . . . . . . . . . . . . . 40
Field Force: First Contingent (Regular Army) ... ... ... ... ... 40
Second, Third and Fourth Contingents (Territorial Army) ... ... ... 4.1
AIR FORCE PROGRAMME AND REQUIREMENTS ... ... ... ... ... ... 41
INDUSTRIAL PRODUCTION ... 42
MISCELLANEOUS REQUIREMENTS 43
COSTS AND FINANCE ... ... ... ... ... ... ... ... ... 43
GENERAL 43

TABLES.
Table I.—Navy facing 4 4
TABLE IA.—CAPITAL EXPENDITURE.
TABLE I A . * — N A V A L CONSTRUCTION.
TABLE I B . — N E T INCREASE OVER 1 9 3 5 PROVISION IN ANNUAL RECURRENT CHARGES
ARISING FROM THE PRESENT PROPOSALS SHOWN IN COLUMNS
4 TO 7 OF TABLES IA AND I A * .
TABLE I C . — R O U G H FORECAST OF N E T TOTALS OF ANNUAL NAVY ESTIMATES FOR
THE NEXT F I V E YEARS IF PRESENT PROPOSALS ARE APPROVED.
Table II.—Army facing 4 4
TABLE I I A . CAPITAL EXPENDITURE.
TABLE I I B . NET INCREASE OVER 1 9 3 5 PROVISION IN ANNUAL RECURRENT CHARGES
ARISING FROM THE PROPOSALS SHOWN IN COLUMNS 5 TO 9
OF TABLE I I A .
TABLE lie. -ROUGH FORECAST OF N E T TOTALS OF ARMY ESTIMATES FOR THE
NEXT F I V E YEARS IF PRESENT PROPOSALS ARE APPROVED.
Table III.—Air Force facing 4 4
TABLE I I I A . — C A P I T A L EXPENDITURE.
TABLE I I I B . — N E T INCREASE OVER 1 9 3 5 PROVISION IN ANNUAL RECURRENT CHARGES
ARISING FROM PRESENT PROPOSALS, THE CAPITAL COST OF
WHICH IS SET OUT IN COLUMNS 6 TO 9 OF TABLE I I I A ABOVE.
TABLE I I I C . — R O U G H FORECAST OF N E T ESTIMATES FOR NEXT F I V E YEARS IF
PRESENT PROPOSALS ARE APPROVED.
Table IY facing 4 4
TABLE I V A . — C A P I T A L EXPENDITURE.
TABLE I V A * . — N A V A L CONSTRUCTION.
TABLE I V B . — N E T INCREASES OVER 1 9 3 5 PROVISIONS IN ANNUAL RECURRENT
CHARGES ARISING FROM PRESENT PROPOSALS SET OUT IN
COLUMNS 4 TO 8 IN TABLE I V A AND IN TABLE I V A * .
TABLE I V C . — R O U G H FORECAST OF N E T ESTIMATES FOR N E X T - F I V E YEARS IF
PRESENT PROPOSALS ARE APPROVED.

ANNEX.
PROGRAMMES OF THE DEFENCE SERVICES : INTERIM REPORT - 45
[12270 I B 2
 REPORT.

I.—Introduction explaining Terms of Reference.

Our F i r s t Report (D.R.C. 14, also C P . 64 (34)) was submitted on the
5th March, 1934. I t was examined in the first instance by the late Ministerial
Committee on Defence Requirements. Their report, as approved by the Cabinet
on the 31st July, 1934 (Cabinet 31 (34), Conclusion 1), cut down by half our
proposals for meeting the A r m y ' s deficiencies, but greatly increased the
programme of the Royal A i r Force. Both the Naval construction programme
and the Naval deficiencies programme were reserved, owing to uncertainties as
to the I n t e r n a t i o n a l Naval Conference, and i t was decided t o deal with them for
t h e moment in the normal course of the A n n u a l Estimates. Subsequently, the
anxiety created in the public mind a t home and abroad as to the dangers resulting
from the r a p i d creation of the German A i r Force led to an acceleration of the
A i r Force programme in November 1934, and again in May 1935.
2. By this time (May 1935) the international situation had further
deteriorated, and consequently the defence programmes, particularly of the Navy
a n d A r m y had become even less adequate to the defensive needs of the situation.
I n these circumstances the reconstituted Ministerial Committee on Defence Policy
a n d Requirements appointed an ad hoc Sub-Committee to d r a f t a Terms of
Reference for a fresh I n q u i r y in the light of recent changes in the situation and
w i t h special reference to financial co-ordination.
3. Shortly after this there was a rearrangement of the Cabinet, and the
Ministerial Committee on Defence Requirements was replaced by the present
(Ministerial) Sub-Committee of the Committee of I m p e r i a l Defence on Defence
Policy a n d Requirements, which, on the 8th July, after considering the Report
of the Sub-Committee on Terms of Reference, gave us the following Terms of
Reference :—
i ­
" To re-examine, in the light of the situation set forth in P a p e r No.
D . P . R . 6* and with special reference to financial co-ordination, the
programmes of the Navy, A r m y and A i r Force, and to make recommendations
for t h e f u t u r e . "
4. On the 24th J u l y we submitted an I n t e r i m Report (D.P.R. 12, also
D.R.C. 25) on this new reference, in which we made a preliminary survey of our
defence requirements and of the international situation so far as i t affects the
question of defensive requirements, and at the same time asked for confirmation
of our views and for further guidance before proceeding to work out in detail
fresh programmes of defence requirements. This Report is attached for
convenience of reference as an Annex.
5. A f t e r considering our Interim Report, the Sub-Committee on Defence
Policy and Requirements formulated the following conclusions :—
" . . .. . without committing themselves in principle either as to the date, or
as to the method by which the programmes of the Defence Services were to
be financed, and without any assumption t h a t it might not be possible to
improve the international situation, the Committee agreed—
(i) T o authorise the Defence Requirements Sub-Committee to work out, for
their consideration, programmes on the assumption t h a t by the end
of the financial year 1938-39 each Service should have advanced its
state of readiness to the widest necessary extent in relation to the
military needs of national defence a n d within the limits of
practicability;
(ii) The Sub-Committee, in their Report, should include answers to the
following questions :—
(a) W h a t special measures would be required for increasing factory
output so as to provide the material required within the period
named, and w h a t would be the cost of those measures ?
* Report of Sub-Committee on Terms of Reference.
 (&) If no such special measures were taken as regards factory output,
w h a t state of preparedness would we be able to achieve b y , t h a t
date, or, alternatively, how long a period would be required to
reach the same state of preparedness as in (a) above %
(iii) T h a t the eventual decision of the Cabinet regarding the programmes of
t h e Services would have to be taken on the widest review of the existing
international, financial and political considerations."
6. The Conclusions set forth in p a r a g r a p h s 3 and 5 above contain our Terms
of Reference.

I I . — T h e I n t e r n a t i o n a l Situation.
7. The international situation in its effect on Defence requirements was
described in p a r a g r a p h s 4 to 14 of our I n t e r i m Report (D.R.C. 25, also D.P.R. 12)
(Annex). T h e deterioration t h a t was then t a k i n g place has continued. T h e
position may be summed u p thus. Germany is still re-arming at full speed, and
rejoicing at the dissolution of the Stresa front. For both these reasons she is
a t t r a c t i n g more Powers into her orbit. She aims at, and may easily complete, a
G e r m a n - P o l i s h - H u n g a r i a n - B u l g a r i a n block. Yugoslavia, w i t h whom I t a l y has
failed to make terms, is being heavily courted by Germany but, while less attached
to France, is keeping a middle position. Czechoslovakia and A u s t r i a are
threatened at a date not yet assignable, and the desire for eastern expansion is
maintained. Meanwhile I t a l y has become antagonistic and must necessarily
emerge debilitated from the present crisis, whatever its solution. France, owing
to M. L a v a l ' s weakness, has allowed herself to be rent by the wide divergence on
foreign affairs between the r i g h t and left. She has consequently proved an
unreliable collaborator at Geneva, because she cannot count on her own people
except in the case of an attempted Invasion, or some event t h a t clearly threatened
France directly —not indirectly. The U n i t e d States are more isolationist at h e a r t
t h a n ever before. J a p a n means to dominate the F a r East, as Germany means, to
dominate Europe. We must, of course, employ all the resources of diplomacy to
avoid r u p t u r e s anywhere, to improve relations everywhere, but the fact remains
t h a t we are living in a world more dangerous t h a n it has ever been before, t h a t
we can count on no one but ourselves unless we are strong.
8. To one of the features mentioned, above we must d r a w p a r t i c u l a r
attention. I n p a r a g r a p h 6 of our I n t e r i m R e p o r t we stated :—
" Meanwhile the dispute between I t a l y and Abyssinia threatens to
weaken the unity of the nations t h a t can hold German ambitions in check.
I t is to be apprehended also t h a t , as German strength increases, there will be
a tendency for her t o a t t r a c t satellite nations into her orbit and away from
the other Powers. Examples of this tendency are already to be found in the
case of P o l a n d and, to a lesser extent, Yugoslavia."
9. These tendencies have been accentuated by the development of the Italo-
Abyssinian dispute into a state of open war, by the rift between I t a l y and the
League of Nations, by the resulting tension between Italy and this country, by
the application of sanctions, and by the s t r a i n t h a t has been p u t on our relations
with France. Owing to these events the unity of the nations t h a t can hold
Germany in check has been seriously weakened. I n addition, as already mentioned,
the tendency of Germany, as she becomes palpably stronger, to a t t r a c t satellite
nations continues. To this must be added the fact t h a t the necessity of
concentrating in the Mediterranean for defensive purposes a large proportion of
our very limited forces has not only left us exposed, temporarily a t any
rate, both in the West and in the F a r East, but has also tended to focus attention
upon the degree of our weakness.

The Effect of Collective Security on Defence Questions.

10. ^ A p a r t from these considerations, the development of the Italo-
Abyssinian dispute, especially when considered in conjunction w i t h the earlier
M a n c h u r i a n episode, has brought to the front a difficulty which, though not wholly
unforeseen, has hitherto not been taken into account in calculating our defence
requirements, namely, the extent of our possible commitments as a world-wide
Power under the system of collective security provided for by the Covenant, and
the suddenness with which they are liable to arise.
11. I n the past it has been our practice to frame our defensive requirements
on deductions made from an annual study of the international situation. This
system was stretched to extreme limits by the adoption after the late w a r of the
assumption t h a t there would be no major w a r w i t h i n ten years from any given
date, which from 1928 was made more drastic and, in effect, meant t h a t for many
years our defensive preparations remained a t a standstill. T h a t complacent
assumption was rudely shaken in the West by ominous signs of a renaissance of
armaments in Germany, and in the E a s t by the J a p a n e s e invasion of Manchuria
and Shanghai and the events at Geneva from 1931 to 1933. Such emergency
defensive arrangements as were possible h a d to be improvised at short notice to
meet the needs of a dangerous situation in the F a r East, the Ten-Year Assumption
was cancelled, and t h e defensive p r e p a r a t i o n s which by any comparative standards
h a d been virtually abandoned while it was in operation were half-heartedly
resumed. The Manchurian episode resulted in the w i t h d r a w a l of J a p a n from
t h e League of Nations and in a further deterioration (that h a d originated in 1923)
in our relations with t h a t country which we have not yet succeeded in removing.
12. After the disappearance of the Ten-Year Assumption we were left w i t h
our traditional and too optimistic system of excluding from our calculations those
G r e a t Powers with which we had no present or prospective difficulties likely to
create serious tension. On the 15th November, 1933, the Cabinet, on the
recommendation of the Committee of I m p e r i a l Defence, decided t h a t —
" No expenditure should for the present be incurred on measures of
defence required to provide exclusively against attack by the United States,,
France, or Italy."' (Cabinet 62 (33),' Conclusion 5 : C.I.D. 261st Meeting,
M i n u t e 1.)

13. T h a t decision has never been rescinded a n d was still operative when
we were given our new Terms of Reference a s recently as the 8th August last.
W i t h i n a week or two of that date we were compelled to improvise military
precautions on an extended scale to meet the very contingency of attack by I t a l y
which h a d been excluded from our calculations. This episode confirms the
repeated warnings of the Chiefs of Staff, supported by historical illustrations, of
the suddenness with which wars and crises a r e a p t to arise.*
14. This is not the occasion to discuss, from the point of view of either
international morality or national security, the merits of the League system of
collective security, which, since t h e W a r , has been adopted by every Government
of this country, with the general support of public opinion. The system is on
t r i a l a t this moment and, unless it succeeds, at least partially, will, we presume,
be reconsidered. B u t we feel bound to bring to notice the very serious effect of
the system, in its present stage, on our own defence requirements, as illustrated by
the M a n c h u r i a n and Abyssinian episodes.
15. Our experience of the incalculable danger to our national and
imperial security involved in a fully armed and militarist Germany provides
overwhelming reasons for avoiding any further estrangement either of J a p a n
(the treaty with whom we unfortunately had to abandon), or of any
Mediterranean Power which lies a t h w a r t our main artery of communication to
the East. Least of all could we contemplate without the gravest misgiving an
estrangement w i t h J a p a n a n d a Mediterranean Power at once. Yet, in both the
M a n c h u r i a n a n d Abyssinian affairs our policy to some extent passed out of our
control by reason of our engagements to the League of Nations. P r i o r to 1914
we were free agents. I n 1894 we could view the J a p a n e s e invasion of Corea
w i t h unconcern; we refused to join in the pressure p u t on J a p a n by Russia,
France and Germany to abate her demands on China after her victory ;t and we
were wise enough to conclude the first Anglo-Japanese Alliance seven years after
t h a t war. I n 1911 we could disinterest ourselves in the I t a l i a n invasion of

* e.gr.'C.I.D. P a p e r No. 1 0 8 2 - B .
f The Gooch-Temperley D o c u m e n t s , Vol. I I , page 89.
 7
Tripoli, the first serious w a r between European Powers since 1877. B u t in
1932-33, and again in 1935, owing to our obligations under the Covenant and the
position we occupy as the one great Sea-Power remaining in the League, we h a d
no alternative but t o play our part—inevitably a leading part—dn disputes in
which our national interest was at most quite secondary, even if it be true t h a t
young I t a l y has long been jealous of our Mediterranean position and potentially
, hostile to this country. On each occasion we have come w i t h i n sight of war and
aroused the bitterness of old friends and allies, including, in the recent past, not
only Italy, but even France, h i t h e r t o our closest but not always reliable friend.

The Relationship between Foreign Policy and Defence.

16. W e consider it to be a cardinal requirement of our national a n d imperial

security t h a t our foreign policy should be so conducted as to avoid the possible
development of a situation in which we might be confronted simultaneously with
the hostility, open or veiled, of J a p a n in the F a r East, Germany in the West,
and any Power on the main line of communication between the two. So far as
J a p a n is concerned, in our previous R e p o r t we emphasized strongly the
importance of an ultimate policy of accommodation and neighbourliness w i t h
t h a t country. Recent events accentuate the desirability of t h a t policy, difficult
though i t may be to carry out.

17. The establishment of friendly relations with Germany on a durable

basis, while equally desirable strategically, presents difficulties which are even
greater t h a n in the case of J a p a n . This object might founder on Germany's
restless desire for expansion, either to the E a s t or South-East in Europe, or by
the acquisition of colonies, or both. If either of these ambitions were to be
conceded or condoned by a Government in this country, widespread opposition
a n d division of public opinion may be anticipated. T h e former case
would, indeed, be wholly incompatible with our membership of the League, or
w i t h the existence of the League. Nevertheless, we see every advantage in
keeping our relations with Germany on as friendly a basis as possible.
H e r r H i t l e r has on several occasions affirmed his desire for friendly relations,
and by concluding the recent Naval Agreement he has given to i t some practical
expression. I n view of the u r g e n t need of peace and the grave dangers to which
this country, its C a p i t a l and the whole Empire, would be exposed in the event
of a breach of the peace in Western Europe, to say nothing of the danger of its
extension to the F a r East, we consider t h a t we should respond as favourably as
circumstances permit—though circumstances are likely to impose a concrete
limit—to H e r r H i t l e r ' s attitude, and do everything we can, in conjunction w i t h
France, to promote and m a i n t a i n friendly relations with Germany. I t is possible,
especially if M. Laval remains in power, t h a t France may attempt to force the
pace in this respect. The subject is at least one to be borne constantly in mind,
though it bristles w i t h practical difficulties, both internal and external.

18. So f a r as I t a l y is concerned i t would be premature to forecast w h a t is

likely to develop from present events; how long I t a l i a n resentment will endure
after an exhausting w a r ; in w h a t kind of condition the country will emerge;
whether the Italians, who are complete opportunists and will take without scruple
the course t h a t suits them best at the moment, will wish to r e t u r n to the League
a n d the Franco-British group or to gravitate towards Germany; or whether the
Germans, who are more formidable realists, will go out of their way to b r i n g
w i t h i n their orbit a nation, probably in an exhausted condition a n d one of whose
doubtful reliability they have bitter experience. These matters are beyond
calculation, but, from the point of view of I m p e r i a l Defence, we would urge that,
before I t a l y can again become a formidable factor, our long-range policy should
be so aligned t h a t we can never get into a position where we would not have a
certainty of French military support in the event of w a r w i t h J a p a n and Italy
at the same time, and a fortiori if we were involved simultaneously w i t h Germany
and Japan. This, however, is, of course, subject to the reservations on the
weakness of France, as explained in p a r a g r a p h 7, and of the unreliability t h a t
always flows from division and can only be corrected by an increase in our own
strength.
 The Need for increasing our Defensive A rmaments.
19. From the above observations one fact stands out pre-eminently.
Whatever means we adopt to forward our main policy of preserving peace, there
is no alternative to our raising our armaments to a far more effective s t a n d a r d
than they will a t t a i n when existing approved programmes are completed. Our
defence forces must not only be strong enough but must be ready to meet an
emergency such as the one t h a t arose so suddenly this summer, for graver ones
may come and come shortly.
20. These a r e urgent necessities, whether viewed from the standpoint of
the past, the present or the future. H a d we been reasonably strong at sea in
1931-33 our influence w i t h J a p a n would have been much greater than it was, and
we might have averted t h a t defiance of the League of Nations which has provided
so unfortunate an example t o Germany and Italy. H a d we been reasonably
strong, Germany might well have hesitated before re-arming in breach of the
' Treaty of Versailles. I f we had been less weak to-day it is almost certain t h a t
I t a l y would never have dared to set herself against the public opinion of the
world and would have responded to the P a r i s peace offers; and, even if I t a l y
had remained obdurate, F r a n c e (feeling more assurance about E n g l a n d and
therefore less dependent on I t a l i a n support) would have been willing from the
first to play her proper p a r t in defending the Covenant of the League instead
of being split from top to bottom on the question of sanctions, and breaking out
into anti-British manifestations.
21. Looking to the future, a strong B r i t a i n is no less essential to the peace
of the world. If the policy of collective security contained in the Covenant
survives the present test, it is certain t h a t it can only succeed under the leadership
of a re-equipped B r i t a i n . As the Japanese, German and I t a l i a n incidents show,
the U n i t e d Kingdom alone among the more powerful States Members of the
League is so placed as to be able to give whole-hearted expression to the moral
ideals underlying the Covenant: expression (be it noted), but owing to our
weakness, not effect. W e can secure the plaudits of the smaller nations who are
a t a safe distance from the centres of disturbance, but we cannot be sure of
obtaining the active material and moral support of the larger nations which,
acting together, alone can provide t h a t overwhelming deterrent to w a r t h a t lies
in the background of the Covenant, because they know, and have long known, t h a t
we lack the power to support our words effectively by deeds. W i t h a strong
B r i t a i n the League would.be a far more effective instrument for the maintenance
of peace, a n d as a deterrent to w a r . I f we fail, moreover, to provide this
strength, we cannot exclude—particularly if we embark on further forward
policies—the possibility of a E u r o p e a n combination against us.
22. A s we see it, there are four possible policies on which to base our
international relationships :—
(i) Adherence to the system of collective security provided for in the
Covenant of the League of N a t i o n s ;
(ii) A more limited system of collective security on the Locarno model;
(iii) The pre-war system of alliances and ententes; or
(iv) Isolation.
W e have already shown that the leadership of a strong B r i t a i n is essential to
the success of the Covenant system. If the Covenant fails and we are driven
back on some other and more limited system of collective security or alliance, our
co-operation will only be desired to such extent as we are recognised to be both
strong and ready. Like Germany we shall a t t r a c t satellite nations in proportion
to our strength, and so increase our influence for peace. E i t h e r of the first three
systems, therefore, demands strong defence forces on our p a r t and needless to
say an isolationist policy, if anyone still h a d leanings t h a t way, would require the
greatest strength of all.
23. Hence, the lesson we draw from recent events is the p a r a m o u n t necessity,
whatever our policy in the future, for making ourselves sufficiently strong to
enable us to take our full share in m a i n t a i n i n g the peace of the world and so
to preserve ourselves, in the hope t h a t a time may ultimately come when mutual
reductions of armaments by consent may become possible without upsetting the
equilibrium. T h a t time, however, is not yet.
 III.—Defence Requirements (General).
24. From the previous section of this R e p o r t it will be seen t h a t i m p o r t a n t
new factors have been introduced into I m p e r i a l Defence. Formerly, if a w a r of
the first magnitude was brewing, it was usually possible to foresee i t and to t a k e
the necessary precautions. B u t if a w a r is brought into sight owing to t h e
operation of collective security, the crisis is a p t to arise w i t h very little w a r n i n g ,
as illustrated by the M a n c h u r i a n and Abyssinian episodes, and as may in t h e
future happen in the case of, e.g., A u s t r i a . I t is almost impossible to forecast
the nations with which we might be brought into conflict owing to a breach of
the Covenant and still more impossible to forecast those on whose m a t e r i a l
support we could count. If the Covenant breaker were Germany, t h a t support
would be even less reliable t h a n in the present case. A n d if we were to become
embroiled in w a r on behalf of, or as a consequence of the action of, the League
of Nations, it might be t h a t one or other of our vital world-wide interests became
exposed, as at the present time. I t is also difficult to calculate w h a t the compo­
sition of our naval, military and air forces should be, as no reasonable w a r n i n g
of the conditions under which we might have to operate can be given.
25. Consequently there arise three completely new considerations in t h e
situation :-—
(a) A s the result of the principle of collective security we must be more
instantly ready for w a r t h a n before.
(b) There is from now onwards the possibility of a hostile I t a l y on our m a i n
line of communications.
(c) As the one big Naval Power of the League we may have to exhaust
ourselves to the detriment of the balance of security against J a p a n a n d
Germany, who are outside it.
To these must be added a fourth new consideration affecting the Navy
exclusively: —
(d) A s a result of the resumption by Germany of the r i g h t to build u p a new
Navy free of the restrictions of the Treaty of Versailles, the Navy of
t h a t country (though fortunately now limited by agreement to 35 p e r
cent, of our own strength) has to be taken into account.
And although there has been a partial recognition of the implications of a i r
attack, we are more t h a n justified in r e g a r d i n g the following as a fifth new
consideration :—
(e) I n view of the enormously increased output capacity of Germany, there
is the possibility of attack so continuous and concentrated and on such
a scale t h a t a few weeks of such an experience might so undermine
the morale of any civilian population as to make it difficult for t h e
Government to continue the war.
26. The remedy of the deficiencies of the three Defence Services as
contemplated in this Report will meet the first of these new considerations by
rendering more possible r a p i d mobilisation and concentration wherever our forces
are required.
27. A s indicated above in p a r a g r a p h 18, the significance of the second
consideration is impossible to appraise as yet, as it depends upon future develop­
ments subsequent to I t a l y ' s Abyssinian adventure. For the present her eventual
political orientation remains a matter of conjecture. Much will depend on t h e
degree of her exhaustion after the present venture, for on this, of course, will
depend the degree of the rancour of an opportunist State. Much will also
depend on how far France recovers from her present outbreak of angry irreso­
lution. W e shall have to make the best of her, and in the last resort France needs
our support so much for her own security vis-a-vis Germany that, provided we a r e
strong, she may recover her perspective. W e must recognise, however, t h a t Anglo-
French co-operation against aggression by I t a l y has been shown to be dubious,
and we must not under-estimate I t a l i a n capacity for mischief if we were i n
conflict w i t h Germany, and I t a l y joined in on the German side.
28. Our defence requirements are so serious t h a t it would be materially
impossible, within the period With which this Report deals, to make
additional provision for the case of a hostile Italy. W e take the view, therefore,
that, for the moment at any rate, it is neither urgently necessary nor feasible
t o make provision for the contingency of a permanently hostile Italy, especially
if, as suggested above in p a r a g r a p h 18, an a p p r o p r i a t e policy can be pursued in
the international field in order to counter this.

29. I t will in any event be necessary to watch the situation carefully and
to make a close study of the Mediterranean strategical problem. But for the above
reasons we have limited ourselves for the present to the same hypotheses as
in our first R e p o r t (D.R.C. 14, also C P . 64 (34)), namely, the provision of an
adequate deterrent to Germany a n d . J a p a n , and a protection to the United
Kingdom and the rest of the E m p i r e in the e v e n t o f w a r with these countries.
30. Even when the problem is limited to these hypotheses, however, new
factors have arisen, particularly so far as the Navy is concerned. Since 1932 the
s t a n d a r d of naval strength has, for practical purposes, been based on the
following formula :—
" W e should be able to send to the E a r E a s t a Fleet sufficient to provide
' c o v e r ' against the J a p a n e s e F l e e t : we should have sufficient additional
forces behind this shield for the protection of our territory and mercantile
m a r i n e against J a p a n e s e attack : at the same time we should be able to
r e t a i n in European waters a. force sufficient to act as a deterrent and to
prevent the strongest European Naval Power from obtaining. control of our
vital Home terminal areas while we can make the necessary redispositions."
(N.C.M. (35) 12.)

So long as Germany was bound by the Treaty of Versailles it may have been
safe to assume a situation in which the " necessary redispositions " could be made
to meet an emergency arising out of difficulties with Germany while still main­
t a i n i n g a strong defensive in the F a r East. This is now more difficult as a result
of the resumption by Germany of the r i g h t to build u p a new Navy free of the
restrictions of the Treaty of Versailles, and the Navy of t h a t country has to
be taken into very definite account. By 1942 Germany, it is calculated, will have
afloat 5 new capital ships in addition to 3 Deutschlands (the " Pocket
Battleships " ) , and J a p a n will probably have completed 2 new capital ships. Even
by the 31st March, 1939, Germany will have 3 Deutschlands and 2 new 26,000-ton.
battle cruisers; if there was a serious emergency in the F a r East we should have
no m a r g i n of security in the event of a threatening situation in the West, even
assuming superior fighting efficiency.
31. W e cannot over-emphasise the difficulties of conducting naval w a r f a r e
against highly efficient enemies in two theatres so widely separated. The
present troubles w i t h Italy, which have necessitated the concentration in the
Mediterranean of naval forces from all over the world, including the F a r East,
afford some slight indication. B u t i t would be suicidal folly to blind our eyes to
t h e possibility of a simultaneous or practically simultaneous threat on both
f r o n t s ; and if we do not possess forces sufficient to provide a deterrent this double
emergency is the more likely to occur. If there is danger from J a p a n a t all, i t
reaches its maximum from the point of view both of probability and extent when
we are preoccupied in Europe. Unless we can provide a sufficient defence for
t h a t emergency, Australia, New Zealand, India, Burma, the rich Colonies E a s t
of Suez and a vast t r a d e will be at their mercy, and the E a s t e r n half of the British
E m p i r e might well be doomed.

32. I n the circumstances we recommend the new formula set forth in p a r a ­

g r a p h 34, which states more effectively than the one quoted in p a r a g r a p h 30
t h a t our s t a n d a r d of naval strength should cover both the two contingencies
mentioned. Further, we consider that, as soon as is materially possible,
o u r naval strength to carry out the formula ought to be calculated on a wider
m a r g i n of safety; for hitherto our m a r g i n has been illusory, and we are now
confronted with the prospect of an increase in the naval strength of our potential
enemies, while in any event nations contemplating an aggression will naturally
select the moment when they are at their maximum numerical strength and we,
perhaps, a t our average. . ;
 33. Unfortunately, for reasons which are given later in Section I V , it is
not possible to bring the Navy even to the present s t a n d a r d by the 31st March,
1939, or for some years thereafter, p a r t l y owing to the Naval Treaties, a n d partly
to the difficulty of increasing the personnel and material to a sufficient e x t e n t
within three years. Even in later years the situation will depend on the results
of any international naval arrangement t h a t may be entered into in substitution
of the existing T r e a t i e s ; but, subject to this, we t h i n k t h a t every effort should
be made to achieve the requisite s t a n d a r d .

Standards of Security aimed at.

34. The s t a n d a r d s of security which we believe to be necessary may be
summarised briefly as follows : -

In the case of the Navy.

W e should aim a t a new s t a n d a r d of naval strength defined as follows :—
(i) To enable us to place a Fleet in the F a r E a s t fully adequate to act on t h e
defensive and to serve as a strong deterrent against any t h r e a t t o
our interests in t h a t p a r t of the globe.
(ii) To m a i n t a i n in all circumstances in Home W a t e r s a force able to
meet the requirements of a w a r w i t h Germany a t the same time.
Included in (i) and (ii) would be the forces necessary in all p a r t s of the world,
behind the cover of the main fleets, to protect our territories and merchant ships
against sporadic attacks.

In the case of the Army.

(i) To m a i n t a i n garrisons overseas on the present general basis for purposes
of I m p e r i a l Defence.
(ii) To provide for the military share in Home Defence, which includes
a n t i - a i r c r a f t defence, Coast Defence and internal security.
(iii) To enable us to provide reinforcements a n d / o r a Field Force from H o m e
in time of emergency or war, with adequate equipment and reserves.
U n d e r (i) and (ii) the most important requirements substantial
improvement in coast defences at Naval bases at Home and Abroad, and t h e
completion of the A r m y ' s share in t h e A i r Defence of Great B r i t a i n .
Under (iii) the most important requirement is to organise a Field Force
which can be sent abroad at short notice for the protection of our vital interests,
and to enable us to honour our international obligations, particularly under t h e
Treaty of Locarno, which would involve effective co-operation w i t h other
signatories on the Continent of Europe. This includes the occupation for our­
selves and the denial to the enemy of advanced air bases in the Low Countries.

In the case of the Air Force.

W e regard as a minimum the strength already decided for the Royal A i r
Force at Home, viz., 123 squadrons (1,512 first-line aircraft) to be completed by
A p r i l 1937. T h i s figure w a s based on the assumption t h a t by t h a t date the
number of German first-line aircraft will amount to some 1,500., I n the absence
of a n y agreement for the limitation of air forces there is, however, no g u a r a n t e e
that she will not build up to an even higher figure of first-line strength. I t i s
therefore vital t h a t the position should be kept under the closest continuous
review.
I n addition we propose :.-—
(i) Provision of war reserves, without which the A i r Force could only
fight for a very short time.
(ii) Strengthening of the air forces overseas and, in particular, those
required to meet the possibility of w a r w i t h J a p a n in the F a r East..
(iii) Additions to the Fleet A i r A r m to correspond to the naval programme.
(iv) Additions to the A r m y Co-operation Squadrons (mainly a u x i l i a r y
squadrons) to provide the requirements of the four contingents of
the Field Force. ­
For all three Services.
A n effective scheme for the expansion of industry in time of w a r and the
provision of reserves of w a r material sufficient to m a i n t a i n them from the outset
of w a r until industry is able to supply their needs from current output.

35. The financial aspects of these proposals are discussed in Section I X .

For the moment i t is sufficient t o state t h a t they would result in an increased
a n n u a l expenditure over the £124 millions (original Estimates) voted for the three
Defence Services in 1935 of the order of £49,650,000 in 1936, £86,750,000 in 1937,
£102,400,000 in 1938, £88,450,000 in 1939, a n d £90,050,000 in 1940. I n other
words, an increased expenditure, compared to the 1935 rate, of about £239,000,000
i n the next three years and a further £178,500,000 in the following two years. In
addition, there is a proposed increase in the Home Office vote of £1,847,000 a year,
for each of t h e next three years, for A i r R a i d s Precautions equipment; and a
recommendation t h a t increased provision should be made for Secret Service work
u p to £500,000 per annum.
All estimates contained in this Report are given with the utmost reserve
and are liable to substantial alteration in the light of experience.
36. The summary given in p a r a g r a p h 34. above is only intended to convey
some idea of the general scheme for Imperial Defence as a whole before describing
the requirements of each of the Defence Services to enable the plan to be
implemented. The Sections which follow, namely, I V (Navy), V (Army),
V I (Air Force), V I I ( W a r Production) and V I I I (Miscellaneous), contain fuller
particulars. Schedules I, I I , I I I , I V and V, which were p r e p a r e d by the
Departments concerned for the use of our Committee, contain a good deal of
further detail.

IV.—Navy P r o g r a m m e a n d Requirements.
(For details, see Schedule I.)

(a) PROGRAMME.

Basis of the Construction Programme.

37. I n p a r a g r a p h 34 above we recommend t h a t the s t a n d a r d of naval
strength should be increased so as to render i t adequate to protect our interests
simultaneously against J a p a n in the F a r E a s t and Germany in Europe. I t must
t a k e a certain time to work out this standard, as it is dependent largely on the
probable programmes of other Powers, as to which more information may be
available after the coming Naval Conference. I t is accordingly not possible for
us to make concrete proposals in connection w i t h such a s t a n d a r d a t the moment.
Still less is it possible to increase the Navy to the new standard within the period
of three years w i t h which this Report is p r i m a r i l y concerned for the reasons
given below.
The Difficulties of Rapid Expansion.
38. The limiting factors in a r a p i d expansion of the Fleet are twofold,
namely, those of (i) material, and (ii) personnel.
39. The material difficulties are due, firstly, to the large amount of leeway
to be caught u p , which is strikingly illustrated later in the case of capital ships,
a n d , secondly, to the diminution in our national industrial resources for
a r m a m e n t work resulting from the relatively small naval orders in recent years
combined w i t h the almost complete disappearance of foreign orders. I n these
circumstances the Admiralty, within the next three years, cannot do much more
i n naval construction t h a n commence the replacement of over-age and out-of-date
ships in order to bring the Navy abreast of the existing approved s t a n d a r d quoted
i n p a r a g r a p h 30.
40. A p a r t from this, it would not be possible to raise and t r a i n the
naval personnel required to man additional new ships. Even to comply w i t h the
requirements of the existing approved standard, a large addition to the personnel
of the Fleet is required (as described below in p a r a g r a p h 58), and further
increases could not be made, in the opinion of the Admiralty, without serious loss
of efficiency.
41. I f it were decided to make a large increase in the size of t h e Navy
w i t h i n the next few years, it would be necessary to resort, so far as both m a t e r i a l
and personnel are concerned, to e x t r a o r d i n a r y measures, such as those adopted
in the case of the Royal A i r Force expansion. Anxious though they are to reach
the new s t a n d a r d as early as possible, the A d m i r a l t y wish to avoid methods which,
in their opinion, would prejudice the efficiency of the Service.
42. There is, however, one step t h a t can usefully be taken to expedite
naval construction generally, namely, to lay down ships earlier in the year. I n
recent years, for reasons of economy, the practice has grown up of laying down
ships in the last quarter of the financial year. W e strongly recommend t h a t
d u r i n g the next few years ships should be laid down as early as possible in t h e
financial year.

Immediate Policy.
43. I n the above circumstances it is clear t h a t d u r i n g the next three years
we cannot make much progress towards the new s t a n d a r d of naval s t r e n g t h
proposed in p a r a g r a p h 34. For the time being we must concentrate on the
requirements of the existing standard, doing ail we can a t the same time to
p r e p a r e for a fresh programme designed to bring the Navy up to the new s t a n d a r d
if it is approved by the Government.
44. Although the situation as to any international agreement on the size of
Fleets is not yet clear, we recommend t h a t the Government should a t once adopt
the new s t a n d a r d in principle and instruct the A d m i r a l t y —
(i) to work out the naval programme required to give effect to it as soon as
the necessary d a t a are available; and
(ii) to make suggestions as to any items in the new programme t h a t can be
p u t in hand before the expiration of the next three years. These will
probably be limited by material considerations to the smaller classes
of warship.
45. In the meanwhile, we wish to make it clear that the naval construction
set forth in this Report and summarised below is limited to the existing approved
standard of naval strength as set forth in paragraph 30.

Capital Ships.
46. The programme of capital ship construction proposed by the A d m i r a l t y ,
in which we concur, involves laying down 7 ships in the period 1937-39 inclusive
(2—3—2). This replacement programme will provide equality in new ships w i t h
Germany and J a p a n , on the important assumption t h a t J a p a n does not s t a r t
building at a greater r a t e t h a n has been assumed by the Admiralty.
47. The high rate of replacement for the years 1937-39 has been forced on
the A d m i r a l t y by the London Naval Treaty, which precluded the building of new
capital ships in the last five years and thus rendered impossible a steady replace­
ment of out-of-date vessels. After the completion of the ships laid down i n
1937-39 (approximately by 1942) the more immediate necessities of capital ships
will have been met, and, after one more year w i t h two ships, it may be possible
to revert to a normal rate of replacement, provided t h a t no new factors arise.
For example, after 1940 it would only be necessary to lay down one capital ship
a year for normal replacement purposes, but t h i s would have to be exceeded if
J a p a n or Germany should lay down more ships t h a n the A d m i r a l t y at present
anticipate. Further, if the quantitative restrictions of the Naval Treaties on
capital ship construction are not renewed in any form, it is possible t h a t J a p a n ,
a p a r t from new construction, may retain old ships t h a t would have been scrapped
under the provisions of the Naval Treaties and thus increase her total of capital
ships. I n t h a t event, it will be necessary for the A d m i r a l t y to go further t h a n is
at present contemplated in the modernisation of our older capital ships in order
to m a i n t a i n the balance, and to provide some reasonable margin as is necessary
 for the new s t a n d a r d we now propose, if it is adopted by the Government. For
these reasons the situation must, in any case, be carefully watched in case, after
1940, a larger capital ship programme t h a n one capital ship a year may be
requisite.

Aircraft Carriers.
48. I n aircraft carriers, the A d m i r a l t y propose to lay down 4 carriers (some
of a smaller type) w i t h i n the period 1936-42.
i

Cruisers.
49. The ultimate number of cruisers to be aimed at must depend, to some
extent, upon construction in J a p a n and Germany, but we are of the opinion that
for the time being it is sufficient to adopt the A d m i r a l t y ' s cruiser replacement
programme, which involves the building of 5 ships a year between 1936 and 1939.
I n the unlikely event of Treaty restrictions comparable with those at present in
force still existing, the future programme could be reduced to 1 replacement
cruiser per annum for a few years. Otherwise, however, and in any event if the
new s t a n d a r d of naval strength is adopted, it will probably be necessary to
continue at a higher rate and also to r e t a i n more over-age vessels.

Destroyer Leaders and Destroyers.

50. For some years now a steady replacement programme of destroyers
h a s been proceeding a t the rate of one flotilla a year. I n view of the large numbers
of destroyer leaders in several foreign navies, we learn w i t h great satisfaction of
the recent Cabinet decision to increase this year's approved building programme
by 7 flotilla leaders of a special type. The A d m i r a l t y contemplate laying down
a further flotilla of these vessels in the financial year 1936-37. After this
programme only one more new flotilla will remain to complete the present approved
total of 12 under-age flotillas. The Admiralty proposals consequently only
visualise the laying down of a flotilla in alternate years u p to 1942 which will
complete our strength unless an increase of our total destroyer strength is decided
upon. An increased programme of these vessels will be required if the Govern­
ment decide to adopt the higher standard of naval strength recommended in
p a r a g r a p h 34.

Submarines, Sloops and Small Craft.

51. As regards other construction, for instance, submarines, sloops, other
small craft and auxiliaries, to m a i n t a i n our present strength it will be necessary
to continue a t the r a t e which has been carried out i n the past, t h a t is to say,
for submarines about 3, and for sloops about 5 or 6 a year.

Cost.
52. I t will be seen from Schedule I, A p p e n d i x 6, that the construction
programme involves an expenditure of approximately £ 1 9 ^ million in 1936,
rising to a peak of £ 3 6 ^ million in 1939. If quantitative international restrictions
similar to those a t present in force under the Naval Treaties a r e renewed, the
cost of new construction will drop considerably in subsequent years. W i t h no
such restrictions, it must be assumed t h a t the cost may be increased and
continue high, more especially if the new standard of naval strength is adopted.
T h e above figures do not, of course, represent a net addition. I n a normal
replacement year calculated on the present strength of the Fleet and the life of
the various classes of ships, the new construction Vote would amount to some
£16-^ million. The figure has only been below this in recent years (£11 million in
1935) because capital ship replacement has been deferred.
53. The additional cost now proposed over t h a t which was p u t forward in
our previous Report (D.R.C. 14, also C P . 64 (34) ) is due firstly to the more r a p i d
r a t e of replacement rendered necessary by more recent estimates of German and
J a p a n e s e programmes, and secondly t o the issue of the preliminary N a v a l
Conversations over the, last year which leave no doubt t h a t owing to the a t t i t u d e
of the U n i t e d States of America we are unlikely to secure international agreement
to reduce the present maximum size of c a p i t a ! ships a n d cruisers.
54. If the above building proposals are adopted, on the 31st March, 1939,
the figures for naval strength for the U n i t e d Kingdom, Germany a n d J a p a n will
be as follows :—

Completed Ships.

Class of Ship. British Commonwealth. Japan. Germany.

Capital
Capita l Ship
Shipss 3 modern 2 modern 2 new
3 modernised 7 modernised 3 Deutsqhlands
9 non-modernised

15 Total 9 Total 5 TotaJ

(excluding 4 very old
ships)
Aircraft Carriers 6C) . 5( )2
1
8-inch Cruisers 15 12(*) 3
Large 6-inch Cruisers 12(*) 6 0( )6

Small 6-inch Cruisers 28( )

5
18 6(*)
Destroyers ... 1440 Jj 93( ) 8
38
Submarines 45. 39( ) n
38

NOTES.—It is assumed that British Commonwealth and Japan adhere to London Naval
Treaty provisions ; this affects 6-inch cruiser, destroyer and submarine.totals,
( ) Assumes Argus scrapped.
1

( ) Assumes Hosho scrapped.

2

( ) Assumes 4 Hawkins class retained rearmed with 6-ineh guns.

3

(*) Excludes 7 old cruisers classed as special service and coast defence vessels.
( ) Assumes 8 6-inch cruisers scrapped to comply with London Naval Treaty.
c

( ) It is probable that about two more new cruisers (size unknown) may be completed.
c

.' ( .) Includes 16 " V " large type.

r

( ) Includes 23 large type and excludes 20 torpedo boats 500-600 tons each.
8

(") Assumes about 17 submarines not yet over-age are scrapped prematurely to comply
with London Naval Treaty.

(b) DEFICIENCIES.

55. W e concur in the A d m i r a l t y proposals for m a k i n g good deficiencies, a n d

the necessary provision has, as far as practicable, been inserted in the p r o g r a m m e
years 1936, 1937 a n d 1938. There remains, however, unavoidably a certain
residue which i t would not be possible to make good in these y e a r s ; and of a total
of approximately £29 million required some £ 4 f million is left to be met subse­
quent to 1939. T h e deficiencies dealt w i t h include the modernisation of capital
ships, anti-submarine equipment, reserves of ammunition, stores. &c, and, i n
consequence of the fact t h a t on t h i s occasion we a r e r e p o r t i n g upon the total
requirements, as against those only needed merely to make good t h e worst
deficiencies, the A d m i r a l t y Estimates necessarily exceed those contained in o u r
last Report. This is particularly the case w i t h the modernisation of c a p i t a l
ships. Subsequent to the estimate p u t forward in P a p e r No. D . R . C . 14
( C P . 64 (34) ) information received as to the extent of modernisation of these
ships by other Powers has shown t h a t considerable e x t r a work was necessary on
our own ships if they were to be comparable w i t h those of the Powers concerned.
56. Complete modernisation is proposed for three of our capital ships,
a n d p a r t i a l for 4 more. The Nelson, Rodney and Hood will not require
modernisation. If quantitative restrictions on the lines of the i n t e r n a t i o n a l
agreements are continued after 1936, the A d m i r a l t y do not suggest modernising
the remaining 5 capital ships. On the other hand, as we have already mentioned,
if no such restrictions continue a n d other Powers retain their older ships when
they have completed their new construction, i t may be necessary to take in h a n d
our remaining capital ships for modernisation in order to m a i n t a i n the requisite
superiority. Details of the deficiency proposals are contained in A p p e n d i x 2 to
Schedule I, and the estimates there do not include the modernisation of the 5 ships
referred to above. ; . . ' '
 57. W e d r a w attention in p a r t i c u l a r to the new I t e m 17 of A p p e n d i x 2 to
Schedule I for the immediate construction of a further Boys' T r a i n i n g Establish­
ment. This is of the utmost importance if the future naval personnel
requirements are to be met.

Personnel.
58. The figures for personnel are given in A p p e n d i x 3 to Schedule I and
they provide, in general, for an expansion of strength by some 35,600 spread over
the years 1936-42. The A d m i r a l t y are reluctant, for reasons of efficiency, to
shorten the period w i t h i n which this personnel should be provided and, as already
mentioned, this affects the r a t e a t which ship replacment can be usefully under­
taken. The desirability of shortening the period of training, however j will be
kept in view. These increases, in conjunction w i t h those already made in 1934
and 1935, result in an annual charge of £820,000 in 1936, rising ultimately to a n
annual total direct charge of over £ 6 ^ million.

Fleet Air Arm.

59. The cost of aircraft for new construction h a s been included in the Naval
Construction Programme, and the Admiralty's proposals contained in A p p e n d i x 4
to Schedule I cover the provision of aircraft for the new carriers and for
re-armament or completion of existing flights; and also for the maintenance of
the Fleet A i r A r m during the period of expansion. T h e proposals a r e spread
over the years 1936-42, mainly for the purpose of keeping in step w i t h new
construction, and the total required in these years amounts to £28 million.
Maintenance of the whole Fleet A i r A r m by t h a t time will have trebled itself
as compared w i t h 1936 and will amount in 1942 to £ 3 million per annum.
60. The first-line Fleet A i r A r m strength allowed for in our proposals will
amount to 504 aircraft by 1942. The need for the increase in the strength of the
Fleet A i r A r m from the present figure of 190 is clear when the present relative
strengths of the principal Naval Powers is considered.
Aircraft E m b a r k e d in Carrier
and C a t a p u l t Ships.
1935. 1939 (anticipated).
U n i t e d Kingdom ... ... ... 190 357
U.S.A. ... ... 403 670*
Japan ... 258 ' 374*
The above numbers do not include aircraft in operational shore-based units
capable of carrying out sea reconnaissance and other duties in co-operation with
naval forces. Differences of air organisation as between U n i t e d Kingdom, U.S.A.
and J a p a n respectively preclude exact statistical comparisons in respect of this
category of units. B u t it is observed t h a t U.S.A. have 170 and J a p a n has 182
first-line aircraft of this n a t u r e . I t is to be noted t h a t the latter country has
great advantage in the North China Sea, where she could make use not only of
ship-borne aircraft, but also of shore-based aircraft working from islands in her
possession. W e possess a certain number of units which are so located t h a t they
are able to co-operate w i t h the Naval forces in various areas, but it is clear t h a t
we are a t present definitely inferior in numbers of aircraft in coastal units, both
to the U.S.A. and to J a p a n . Our position in this respect will, however, be
improved by the present A i r Force Expansion Scheme and by the proposals in
this Report. Moreover, the A d m i r a l t y propose to discuss with the A i r Ministry
means whereby our position in this respect may be further improved, particularly
in respect of mobility (see p a r a g r a p h 81 below).

61. These increases in the strength of the Fleet A i r A r m and its ever
growing naval importance will necessarily require more shore accommodation for
maintenance and training, and the Admiralty, in Schedule I, p a r a g r a p h 10 (d),
have d r a w n attention to their opinion t h a t a Fleet A i r A r m base ashore is a
* These are figures anticipated for 1938, no figures for 1939 being available.
vital requirement for the efficiency of the Fleet A i r A r m , and they have
tentatively mentioned a figure of £ 5 million for t h a t purpose. This is not,
however, included in the summary of the Naval estimates of cost, and is a m a t t e r
for discussion between the A d m i r a l t y and A i r Ministry, whose own Estimates, i t
may be observed, include considerable (£2 million) provision for additional shore
accommodation for the Fleet A i r A r m :

Possible New Mediterranean Base.

62. The A d m i r a l t y ( p a r a g r a p h 10 (e) and A p p e n d i x 5 to Schedule I) d r a w
attention to the question of a possible base in Cyprus to supplement our base
facilities in the Mediterranean. A very tentative estimate of the cost of the
establishment of a complete base has been made, amounting to approximately
£22-1 million. The proposal raises many big questions a n d the cost has not been
included in the summary of estimates attached to this Report.
63. A s already mentioned in p a r a g r a p h 29, we a r e of opinion t h a t the
Mediterranean situation is one which needs watching, and one factor in this is
the question of such a base in Cyprus. I t might be t h a t some p a r t i a l work, such
as the building of a breakwater and the provision of a dock w i t h certain r e p a i r
facilities only, would be the correct solution of t h e problem.

General.
64. I n the foregoing summary of the A d m i r a l t y estimates for making good
deficiencies and providing for new construction, it is i m p o r t a n t to emphasise that
nothing has been included for the inevitable expansion at t h e A d m i r a l t y and
out-ports in the matter of staff to cope w i t h the large volume of extra work that
will be involved.

Y.—Army P r o g r a m m e and Requirements.

(For details see Schedule I I . )

The Field Force.

65. The role which we propose for t h e A r m y in p a r a g r a p h 34 requires the
following provision, viz., a R e g u l a r Field Force Contingent of 4 Divisions, a
Mobile Division (see next p a r a g r a p h ) , 2 A i r Defence Brigades a n d A r m y
Co-operation Squadrons of the Royal A i r Force, together w i t h the necessary
complement of G.H.Q. Corps a n d L. of C. troops, the whole provided w i t h all
its essential needs as regards modern a r m a m e n t and material. This Force would
form the first contingent of the Field Force, and would number about 155,000 men.
66. U n d e r these proposals the present Cavalry Division will be reorganised
as a mobile division, consisting of 6 mechanised Cavalry Regiments and a T a n k
Brigade, together with a p p r o p r i a t e s u p p o r t i n g arms and services. Provision is
also made for 3 new A r m y T a n k Battalions, which, w i t h the one now existing,
will provide one per I n f a n t r y Division of the 1st (Regular) Contingent of the
Field Force. These are considered essential for the. support of I n f a n t r y u n d e r
modern conditions of warfare. I n addition, the four I n f a n t r y Divisions would
be mechanised in r e g a r d to their t r a n s p o r t , in accordance w i t h programmes
already initiated.
67. W e regard r a p i d i t y of mobilisation as essential, and we therefore
propose t h a t arrangements should be speeded u p so as to enable the Cavalry
(Mobile) Division and A i r Defence Brigades to be disembarked on the Continent
in a week, and the remainder of the 1st Contingent a week later. This involves
an ultimate increase of the annual recurrent expenditure from £1,100,000 to
£1,500,000 as regards personnel (vide Schedule I I , p a r a g r a p h 6), and, in
addition, further expenditure, may prove necessary in acquiring more r a p i d l y
other essential requirements for the force. I t is becoming more and more obvious
that if our assistance to Continental allies is to be effective, i t must be available
within a fortnight of the outbreak of war.
 The Territorial A rmy.
68. The A r m y CounciTs proposals further aim a t supporting the first
Regular Contingent by Contingents of the Territorial Army, fully equipped on
a modern scale as follows :— .
A second Contingent of 4 Divisions a t 4 months after the outbreak
of war.
A t h i r d Contingent of 4 Divisions a t 6 months after the outbreak
of war.
A fourth Contingent of 4 Divisions a t 8 months after the outbreak
of war.
T h e fifth Regular Division which exists in peace would be used to stiffen the
T e r r i t o r i a l Division in the second Contingent, and is available a t all times for
despatch, in whole or in part, for lesser emergencies, without detriment to the
first Contingent of the Field Force.
69. I n our earlier Report (D.R.C. 14, also C P . 64 (34)) we included a sum of
no more than £250,000 per annum for the Territorial Army. A t the present time
as regards mobilisation, equipment and w a r reserves, the Territorial A r m y is little
more than a paper force, and we propose, therefore, an outlay totalling
£26,000,000 on the modernisation of the 12 Territorial Divisions which constitute
the second, t h i r d and fourth Contingents in order to give them the necessary
material to take p a r t in modern war. The previous allotment of £250,000 per
annum it is proposed to retain for the purpose of improving its t r a i n i n g and
efficiency by the provision of cadres, better t r a i n i n g facilities, Regular
instructors, &c.

A mmunition.
70. The bulk of the ammunition for later Contingents could be found by
post-war production, but reserves for the earlier Contingents, and especially the
, first, must be held in peace to bridge over the period from the outbreak of war
till factory production is adequate to meet w a r needs. The Army Council make
proposals for the necessary reserves amounting to £35,276,000 (plus £ 1 ^ million
for works services); this figure includes £743,000 passed in the current financial
year. I t is materially possible, w i t h i n the first three years, to complete the above
programme only to about 80 per cent, for the 1st (Regular) Contingent of the
Field Force, but within five years we should be in sight of the complete require­
ments for the whole four contingents of t h e Field Force. This is on the
assumption t h a t all the proposals for improving existing output are p u t into
effect; failing that, the costs of the necessary reserves will be much greater and the
time for completion greatly extended (vide Schedule I V , p a r a g r a p h s 5 to 9).

Coast Defence.
71. So far as Coast Defence is concerned, the Army CounciFs proposals
provide for the following items :—

(a) Singapore.
Completion of Stage I of the Defences, the installation of a further two
15-inch guns (paid for by the gift of the Sultan of Johore), and also the
completion of Stage I I of the Defences by the addition of three further 6-inch­
g u n batteries, defence electric lights, and barracks for a third British Battalion.

(b) Hong Kong, Aden, Ceylon and Penang.

A n increase from £200,000 a year to £300,000 a year in the provision for
other ports E a s t of Suez, in order t h a t the programme may be completed in
10 instead of 15 years. The more important portion of the programme would,
of course, be finished a t a much earlier date. A large p a r t of the additional
expenditure is required for Hong Kong, but the lapse of the Washington Treaty
or the deterioration of the political situation in the F a r E a s t would entail further
increases, particularly in respect of H o n g Kong.
(c) Malta, Gibraltar and Freetotvn.
A n increase to £150,000 per annum of the £100,000 per a n n u m already
allotted for the Mediterranean and Cape route, which would enable the more
important items, especially Malta, to be completed w i t h i n 14 years. T h e whole
problem of the Mediterranean, as mentioned in p a r a g r a p h 29 above, will, however,
require reconsideration; for example, the question of proposed 15-inch guns a t
Malta and t h e possibility of a new Naval Base at Cyprus. If the suggestion
to construct such a base a t Cyprus, vide p a r a g r a p h 62, is eventually approved, i t
will entail a considerable expenditure from A r m y funds over and above the figures
already given. "We can, therefore, regard the present proposals as only
provisional.

(d) Home Ports.

A n increase to £75,000 of the £25,000 per annum already allotted to H o m e
Ports. The present allotment is quite insufficient to remedy even u r g e n t
requirements.
Generally, therefore, an additional allotment of £300,000 per a n n u m over
and above those p u t forward in the first report of this Committee (D.R.C. 14, also
C P . 64 (34)) is recommended as providing a reasonable programme for all coast
defence, including £100,000 for extra personnel charges but excluding the c a p i t a l
cost of Stage I I Defences for Singapore for which special provision is made.

Air Defence of Great Britain.

72. A s regards the A i r Defence of Great B r i t a i n , this cannot be completed
in three years, but the Army Council's proposals should, in five years' time, b r i n g
within sight the full suggested scale of a n t i - a i r c r a f t defence, provided t h a t t h e
necessary recruits can be obtained for the Territorial Army, which a t the present
time is in a bad way in this respect.
73. The A r m y Council's proposal is t h a t t h e whole of the authorised allot­
ment of £590,000 (including ammunition) should be available for equipment for
Air Defence of Great B r i t a i n other t h a n ammunition. A n t i - a i r c r a f t ammunition
would be treated as a separate item and placed on a programme (Schedule I I ,
p a r a g r a p h s 26 to 28). The allotment now proposed for equipment other t h a n
ammunition will furnish the greatest acceleration practicable in the next two or
three years. A t the end of t h a t time the allotment should be further considered.

New Infantry Battalions.

74. Our proposals provide for an addition of 4 I n f a n t r y Battalions. W e
invite attention to p a r a g r a p h s 29-31 of Schedule I I , where i t is shown that, in
order to meet our foreign commitments in full, 6 additional I n f a n t r y B a t t a l i o n s
are required abroad, w i t h 6 more a t Home to relieve them. Two a r e required
for Malta, one for Singapore, two to replace two short-tour battalions abroad,
and one to replace the second G u a r d s Battalion in E g y p t . If the battalion now
at Tientsin cannot be w i t h d r a w n to Hong Kong, it will mean an additional
battalion abroad and another at Home, making 14 in all. I n the present
state of recruiting, however, the raising of so many new Battalions is
impracticable, and t h a t is the sole reason for limiting the present proposal to
4 Battalions, of which one will probably be stationed at Singapore, one in E g y p t
and the remaining two at Home. These four battalions, therefore, represent only
a first instalment of the 12 (or 14) required.

Re-equipment of Field Artillery.

(See Schedule I I , A p p e n d i x V I . )
75. New factors have recently arisen which have compelled us to consider
the position r e g a r d i n g our Field Artillery equipments, the 18-pdr. gun a n d t h e
4-5-inch howitzer, both of which were put into the Service nearly 30 years ago.
The Germans have abolished their war-time field gun and field howitzer and have
adopted a single weapon w i t h a range of over 12,000 yards. The ranges of our
weapons are approximately 6,500 yards for the 4-5-inch howitzer and
[12270] D 2
 9,000 yards for the 18-pdr. I n reconditioning our Field A r m y it is essential
now to take into consideration the re-equipment of our Field Artillery.
P r e l i m i n a r y trials with an 18-pdr. gun relined to take a 25-lb. shell and giving
a range of 12,000 yards have been satisfactory. If further trials give good
results, we recommend t h a t both the 18-pdr. and 4-5-inch howitzer equipments of
the Field A r m y should be replaced by this converted gun. If, on the other hand,
we r e t a i n the existing guns and build up, as we should have to, large reserves of
ammunition for them, we should, when the equipments were subsequently changed,
find t h a t a considerable p a r t of the expenditure thus incurred would have been
wasted.
76. W e are informed that, if the necessary steps are authorised at once, in
five years' time the majority, if not all, of the Field Artillery will have been
re-equipped and adequate ammunition reserves will have been built up. But
even though the conversion of the 18-pdr. gun is decided upon, it will still be
necessary to purchase existing types of ammunition to hold as reserves for such
time as existing guns remain in the Service, but the change over will be gradual,
and I n d i a will continue to need such ammunition for a long time, as in her case
similar rearmament can be expected to lag considerably behind ours. One result
of the change over, until it is completed, will be t h a t (as in 1914) we shall have
different field artillery equipments in different contingents, but provided that,
under a carefully drawn up programme, adequate reserves exist for all types, it
would be an inconvenience r a t h e r than a danger.
77. A decision to re-equip the Artillery on a large scale always presents
difficulties, but we consider that, under proper arrangements, no risk should
eventuate, and our position in five years' time, w i t h a modernised and more
powerful weapon, will be greatly improved. I n view of the superiority of this
new German gun, it is wiser, and in the end less costly, to take t h a t decision now
rather t h a n to postpone it.
Improvement in Housing.
78. The last item in the A r m y ' s list is a programme of works services spread
over ten "years, and costing £16,000,000 exclusive of additional staff. Of this
£6,000,000 can be made available in A r m y Votes at their present level over t h a t
period, leaving a net total of £10,000,000 beyond normal provision.
A t present many units occupy hutted or barrack accommodation far below
modern standards, and, indeed, in some cases approximating to slum conditions.
This situation is due to financial stringency since the war. The barracks in
question are so old as to be incapable of improvement and must be rebuilt
completely. The huts have in most cases not only long passed their economic life
and are disproportionately expensive to maintain, but will not stand up very
much longer.
The sum now asked for is intended to ensure t h a t the bulk of the A r m y is
accommodated in satisfactory conditions and u p to the s t a n d a r d now enjoyed by
the Royal Navy on shore and Royal A i r Force; this is not only fair to the troops
but will also improve the present state of A r m y recruiting.

Recruiting.
79. Improved recruiting both for the Regular and Territorial A r m y is an
essential requisite for the fulfilment of the A r m y Council's proposals. A t the
present time the authorised peace establishments and actual strengths in many
of the arms and services of the Regular A r m y are inadequate, and insufficient
reserves are available to complete units to w a r establishment and to replace
casualties in the interval before post-mobilization recruits can be trained.
I n the Territorial Army the situation is even more serious and a very large
increase in peace strength, possibly coupled with the formation of a Territorial
Army reserve, will be necessary if the Territorial A r m y contingents are to be
ready to take the field at the times indicated in p a r a g r a p h 68 and if the units
required for a i r defence and home defence are to be capable of fulfilling their
role.
I t is essential t h a t recruiting be improved for both the regular and territorial
forces. The provision of men is the first essential if the Army is to meet its
obligations.
 The A r m y Council are a t the present moment considering certain steps to
popularise service. These, however, will, i t is feared, be by themselves i n a d e q u a t e
unless the matter receives the full support of members of the Government a n d of
public men and public bodies. I t may be t h a t when the people of this country
realise t h a t the situation is such as to require the rehabilitation of our defences
recruits may present themselves in larger numbers. Better conditions and the
introduction of modern equipment may also assist in a t t r a c t i n g recruits.
These improvements will involve additional expenditure, and, should they
prove inadequate, there may be no alternative but to increase the p a y of the forces
so as to compete w i t h conditions which exist in the labour market. Such an
increase would involve a considerable addition to A r m y Estimates, and would also
affect the Navy and A i r Force.
A p p e n d i x V I I to Schedule I I deals w i t h the shortage of personnel and the
problem of recruiting in more detail.

Y L - A i r Force P r o g r a m m e a n d Requirements.
(For details, see Schedule I I I . )
80. A s indicated in p a r a g r a p h 34 above, the proposals of the A i r Council
comprise—
(i) The completion of the expansion programme as a t present approved, so
as to increase our metropolitan first-line air s t r e n g t h to a total of
123 squadrons (1,512 aircraft) by A p r i l 1937.
I t should be understood, however, t h a t increases i n the s t r e n g t h of
Germany and France above 1,500 first-line a i r c r a f t would involve
corresponding increases in our own first-line strength.
Cn) The provision of A r m y Co-operation squadrons to accompany the field
forces on the following scale : ­
(a) First contingent (regular), 7 squadrons (each of 12 a i r c r a f t ) ;
(b) One squadron for communication purposes to accompany the first
contingent;
(c) Second contingent (territorial) (after 4 months), 4 or 5 s q u a d r o n s ;
(d) T h i r d contingent (territorial) (after 6 months), 4 or 5 s q u a d r o n s ;
(e) F o u r t h contingent (territorial) (after 8 months), to be raised on
mobilisation.
Present arrangements allow for 5 A r m y Co-operation Squadrons of the
Royal A i r Force to accompany the first contingent of the Field Force, each
squadron having 18 aircraft. The W a r Office have represented t h a t from
the point of view of A r m y organisation, i t would be preferable if there were
7 squadrons each of 12 aircraft. This arrangement would provide a
squadron for co-operation w i t h each of the two Corps h e a d q u a r t e r s and five
Divisions constituting the first contingent of the Field Force (vide p a r a ­
g r a p h 65). I n a w a r of movement it is desirable t h a t Divisional Commanders
should be able to control the air reconnaissance on their own immediate
fronts. I f a total of only 5 squadrons is available, such an a r r a n g e m e n t
would clearly not be possible. A further argument in favour of the new
proposal is t h a t a squadron of 12 aircraft is a more mobile and compact
u n i t for a war of movement t h a n one of 18, owing to the reduction in q u a n t i t y
of transport, stores, &c. On the other hand, the 7-squadron organisation will
be rather more expensive in personnel and accommodation.
A squadron is required to accompany the first contingent for inter­
communication by air, especially to assist Commanders a n d Staff Officers to
m a i n t a i n touch between formations and units when roads are congested and
other communications are bad. Details of equipment and strength will
require discussion between the A i r Ministry and W a r Office, and for this
item no financial provision is a t present included.
The 8 squadrons required as t h e complement of the 8 t e r r i t o r i a l divisions
of the second a n d t h i r d contingents would be auxiliary a i r force squadrons.
As, however, there are practical limits to the number of auxiliary squadrons
which can be effectively raised, the A i r Council propose to meet these
 requirements in p a r t by a n increase of 4 additional auxiliary squadrons
(over and above the 16 at present included in the scheme for home defence),
and in p a r t by converting—from bombers to A r m y Co-operation—four of the
auxiliary squadrons at present earmarked as p a r t of the A i r Force expansion
scheme. To replace these units four new regular bomber squadrons would
be raised. The adoption of this plan would enable squadrons to be raised
in localities where they could co-operate with the territorial divisions to
which they are allotted.
I t may later be necessary to raise two more squadrons, in order to bring
the complement for Territorial Divisions u p to 10.
I n addition to the above, additional spotter flights will eventually be
required for co-operation w i t h Coast defences at Home, probably three flights
in all. No financial provision for this is a t present included.
(iii) The provision of a first-line strength of 504 aircraft for the Fleet A i r
Arm, in accordance with the A d m i r a l t y ' s programme, and the
consequent provision of further shore accommodation at home and
abroad.
(iv) T h e provision of additional a i r c r a f t a t various overseas stations,
amounting to 13 squadrons and 2 or more Spotter Flights, par­
ticulars of which are as under :-—'

/ (a) Singapore.
A n extra land-plane reconnaissance squadron, making the total number
of squadrons permanently based at Singapore u p to 6. Provision is also
needed for two additional operational landing grounds to facilitate the
operation of squadrons permanently allocated to Singapore and of those
earmarked to proceed there as reinforcements.

(b) Penang, Ceylon and Aden.

One land-plane reconnaissance squadron at each of the above.
These squadrons are required to co-operate w i t h the Navy in the
protection of the sea communications to the F a r East, to assist in the defence
of B r i t i s h territory and commerce in the Southern Pacific and I n d i a n Oceans
until the arrival of the Fleet at Singapore, and to secure bases which will
be required by the Fleet on its passage from European waters. A s the
plan for the defence of Singapore involves immediate a i r reinforcement
in an emergency by 4 squadrons from I n d i a and Iraq, no further squadrons
are likely to be available in those Commands for r a p i d despatch to t h e
ports in question. Moreover, the type of squadron best suited for t h e
purpose is one trained and equipped for long flights over the sea, and
no such squadrons are available outside the United Kingdom for strategic
reinforcement purposes. Provision of a p p r o p r i a t e squadrons permanently
based at Penang, Ceylon and Aden is therefore essential. A s and when i t
becomes necessary, spotter flights for co-operation with the Coast Defences
and the requirements of the Army for the t r a i n i n g of anti-aircraft u n i t s
will have to be provided.

(c) Hong Kong.

Approval has already been given in principle to the establishment at
H o n g Kong of a force of 4 squadrons and 1 spotter flight, together w i t h a
r e p a i r u n i t and an additional aerodrome.
(d) Middle East.
To give effect to the principle of a strategic air reserve enabling rein­
forcement along the imperial air routes, it is recommended t h a t a n
additional squadron should be located in the Middle East Command for this
purpose. Provision, therefore, is included for 1 General Purpose squadron
in order to strengthen our defensive position overseas.
(e) Malta.
I t is recommended t h a t the force at M a l t a should ultimately comprise
2 squadrons and 1 spotter flight. This provision is subject to further
consideration to which reference is made in p a r a g r a p h 29.
 (f) West Africa.
The a i r requirements for West Africa were stated by the J o i n t Over­
sea a n d Home Defence Committee in the following terms :—
" I t is considered t h a t the scale of a t t a c k on Freetown could be
effectively reduced by the provision in Sierra Leone in peace t i m e of a
total of 2 bomber squadrons a n d 1 fighter bomber squadron."
I t is considered t h a t u n t i l t h e international situation is more clarified
the provision of these units is not of u r g e n t moment, but the m a t t e r should be
kept under constant review. I n the meanwhile, provision is made for t h e
establishment of an aerodrome a n d for 1 General P u r p o s e squadron.
(g) East A frica.
For more t h a n a year a proposal has been under consideration for t h e
establishment of a squadron in E a s t Africa for local defence purposes. T h e
- principal difficulty has been t h a t t h e B r i t i s h Territories in E a s t Africa
cannot afford to pay the capital cost of the squadron, a n d cannot m a i n t a i n i t
except by reducing three battalions of t h e local forces; a n d t h e General Staff
hold strongly that, this reduction could not be made without detriment to
security—an opinion which has been confirmed by recent events. W i t h o u t
prejudice to the question of whether or when the E a s t A f r i c a n Territories
will be in a position to m a i n t a i n the squadron in whole or in p a r t , we
recommend t h a t one General P u r p o s e squadron should be provided as a
further contribution to t h e strategic a i r reserve. I t would, of course, also
be invaluable for local defence.
(h) West Indies.
1 reconnaissance (flying-boat or land-plane) squadron should be
established.
(i) Gibraltar.
Provision has been taken for the establishment of a landing ground with
flying-boat facilities.
U p to t h e present the ' ' all B r i t i s h ' ' route from the U n i t e d Kingdom t o
t h e Middle E a s t has been impracticable for a i r c r a f t owing to the limitations
of flying range and t o the lack of suitably spaced l a n d i n g grounds in B r i t i s h
territory. The first of t h e difficulties has now practically disappeared, a n d
w i t h i n a few years a large proportion of Royal A i r Force squadrons in the
U n i t e d Kingdom will be equipped w i t h a i r c r a f t capable of flying direct t o
Gibraltar (the longest stage in the route), and thence to M a l t a a n d the Middle
East. The provision of a n adequate intermediate a i r base a t G i b r a l t a r is
therefore the key to the whole strategic conception of I m p e r i a l a i r defence,
a n d on it will depend our ability to carry out large-scale reinforcement flights
from E n g l a n d to other p a r t s of the Empire, and vice versa, for many years
to come. A n a i r base a t Gibraltar is also essential for the local operation
of landplanes and seaplanes engaged in t r a d e protection a n d a i r defence.
There are many difficulties, political, geographical, meteorological a n d social,
in the way of providing the required facilities, b u t preliminary investiga­
tion of the problem suggests t h a t they a r e not insuperable. Accurate
estimates of t h e total costs involved cannot be given u n t i l further enquiries
have been made a n d plans have been d r a w n u p .

Sea Reconnaissance.
81. The A i r CounciFs proposals under p a r a g r a p h 80 (iv) above are designed
to enable the fullest use to be made of mobility a n d to permit reinforcement of t h e
threatened locality as required. The A i r Staff, in conjunction w i t h the Naval
Staff, are giving full consideration to the needs of the Navy in reconnaissance
aircraft to assist in the protection of t r a d e routes a n d naval bases. P e n d i n g
these explorations, we a r e not in a position to include a definite figure for this
purpose. I t is, however, a commitment which must be borne in mind.

Provision dependent upon International Situation.

82. Certain of the requirements shown above must be regarded as
provisional, since they are dependent on the outcome of the existing international
situation. For Malta, the Middle E a s t and E a s t Africa, for instance, require­
merits a r e framed without r e g a r d to the deterioration in the political relations
between this country and Italy, or to the strength of the forces which I t a l y may
ultimately keep in her African colonies. These are matters which, like the
strategical situation in the Mediterranean, will require careful examination
when the present Italo-Abyssinian question is cleared up. I n the interim, as
will be seen above, we have recommended an immediate provision of one composite
squadron and one flight for Malta, one general purpose squadron for the Middle
East, a n d one general purpose squadron for E a s t Africa,
Similarly, the general purpose squadron proposed for West A f r i c a must be
regarded as provisional for reasons given in p a r a g r a p h 80 (iv) (/).

War Reserves.
(i) Material.
83. The main item of expenditure in the A i r CounciTs recommendations
relates to the provision of w a r reserves. I t is clear t h a t in air warfare,
particularly in Europe, the clash will be immediate, intensive and sustained.
Losses in personnel and material will be heavy. The expenditure of a r m a m e n t
stores a n d fuel supplies will be continuous and on a large scale. Unless t h i s
wastage is continually replaced our air forces will be rapidly reduced in strength,
a n d in a very short time will become, impotent either to defend this country
against air attack, or to undertake offensive operations against the enemy. W a r
reserves to be adequate must be such as will bridge the gap between the outbreak
of w a r and the time a t which the aircraft industry can meet the demand. A s
yet it has only been possible to carry out a preliminary investigation of the
potentialities of the a i r c r a t t industry in war. Based upon this investigation
and upon the anticipated rate of wastage, it is calculated t h a t it will be necessary
to maintain in time of peace a reserve of aircraft amounting to 200 per cent,
of the first-line strength. Of this 200 per cent., however, it is expected t h a t
50 per cent, could be obtained from the working reserves provided for peace-time
maintenance, and in consequence the net figure for Avar reserves of aircraft will
be 150 per cent., with a r a t h e r lower scale for the Fleet A i r Arm.

84. The anticipated r a t e of wastage in pilots in w a r is also very high,

and in consequence it is- necessary to hold in reserve in time of peace sufficient
aircraft and engines to permit the establishment of additional flying t r a i n i n g
schools immediately on the outbreak of w a r to maintain the supply of pilots.
I t is considered that four months' supply in both airframes a n d engines is
necessary for this specific purpose.

85. Other items of aircraft equipment, airframe and engine spares and
general supplies have been calculated on the same basis, i.e., to cover the interval
before the output from the industry on a w a r basis could meet the demand,
which is at present assumed to be six months. I n the case of bombs, small arms
ammunition and pyrotechnics, it is calculated t h a t six months' supply would be
necessary to be held in reserve.
86. For motor transport, provision is made only for initial requirements
and for reserves of technical vehicles which cannot be readily obtained from civil
sources. I t is hoped to procure the remaining requirements by requisitioning
on the outbreak of war.
87. A further item of expenditure in the A i r Council's proposals to which
the Committee wish to d r a w attention is the provision of storage for reserves, and
the provision of jigs and tools for the manufacture of aircraft. I t is hoped t h a t
it may be possible to combine the provision of reserve storage Avith the provision
of adequate erecting space for the aircraft industry to meet the big demands
which will be made upon it on mobilisation. I t may, therefore, be possible for a
p a r t of the expenditure required for the provision of storage for reserve aircraft
to be borne by the aircraft industry. The provision of jigs and tools, & c , for the
manufacture of aircraft is a heavy item.
One aspect of the provision of aircraft reserves to which we wish to d r a w
attention is the r a p i d r a t e at which aircraft become obsolescent through the intro­
duction. of improved designs. U n d e r peace-time conditions the aircraft which
must be held in reserve to meet w a r wastage will, of course, be only partially
used u p . I n consequence, heavy recurring expenditure will be required for
periodical replacements of obsolete aircraft in the Reseiwe by newer types.

(ii) Personnel.
88. The problem of w a r reserves is not only one of equipment. A
substantial enlargement of the reserve of pilots will also be required. As d u r i n g
the next four years the number of first-line u n i t s is being largely increased it
will not be possible to accelerate the flow of Short Service Officers to the Reserve,
and the only practicable solution of the problem is a larger entry t h a n at present
of persons who could be t r a i n e d in flying ab initio for Reserve Service only.
The A i r M i n i s t r y estimate t h a t a further entry to the Royal A i r Force Reserve
of 600 pilots a year for the next three years will be required additional to the rate
of entry of 200 a year to which they are now working.

YII.—Industrial Production.

89. As stated in p a r a g r a p h 5 (ii), we have been instructed to include in our

Report answers to the following questions :—
(a) W h a t special measures would be required for increasing factory o u t p u t
so as to provide the material required within the period named
(i.e., by March 1939), and w h a t would be the cost of those measures ?
(b) I f no such special measures were taken as regards factory output, w h a t ,
state of preparedness would we be able to achieve by t h a t date, or,
alternatively, how long a period would be required to reach t h e same
state of preparedness as in (a) above?
I n addressing ourselves to these questions we have been largely guided by
the Memorandum of the Master-General of the Ordnance, which is attached as
Schedule I V , and, so far as A i r Expansion is concerned, by the M e m o r a n d u m by
the Chief of the A i r Staff (Schedule I I I , p a r a g r a p h s 4-7, a n d A p p e n d i x " A ")..
90. As regards question (a), we deal below w i t h the methods of increasing
factory output under the following heads :—
(a) M a n u f a c t u r e in or by I n d u s t r y ; and
(b) M a n u f a c t u r e by Government Factories;
and at the outset we would point out t h a t our proposals do not take into
consideration the requirements of the Dominions and India except to a small
extent in the case of the A ir Ministry.

Shadow Armament Industry.

91. W e consider t h a t the only method by which very large deficiencies i n
war material can be supplied, and at the same time a " potential " for the much­
greater quantities required after the outbreak of war built up, is by the creation
of a " Shadow A r m a m e n t I n d u s t r y . "
This is the method advocated by the Advisory P a n e l of I n d u s t r i a l i s t s (Lord
Weir, L o r d Riverdale and Sir J a m e s Lithgow), a n d approved by the Committee
of Imperial Defence.* I n principle, this method is simple and its application
is governed mainly by a regular supply of orders assured in advance.
Briefly, the principle is t h a t firms who do not normally make warlike stores
are engaged to do so by placing orders w i t h them in peace time on a relatively
small scale, on the condition t h a t they lay out their works and hold machinery
for a w a r output greatly in excess of their peace production.
W h i l s t the " S h a d o w A r m a m e n t I n d u s t r y " scheme applies essentially to
new firms, it can also be applied to existing contractors t o extend their ' ' w a r
potential." W e strongly recommend the adoption of this policy.

* C.I.D. Paper No. 1138-B. C.I.D., 264th Minutes, Conclusion 6.

[12270]
 Conditions Necessary.
92. The following are the conditions essential to this plan :—
(a) A n approved long-term programme of rearmament (this will need to be
reconciled in form with the constitutional prerogative of Parliament).
(b) Continuity of orders to the Trade, so t h a t contractors may be attracted
by business propositions. Year to year contracts, except in the case
of our normal contractors, have not proved to be an attraction.
Contractors must be assured of continuous business over a term of
years, to justify them in t r a i n i n g and retaining the necessary skilled
personnel a n d supervisory staffs.
(c) Government assistance (if found necessary) in order to provide the
selected firms with the additional machinery, jigs, gauges and machine
tools necessary to enable them to a d a p t their factories to the
production of war material. W e consider it important also t h a t this
subject should be discussed at an early date with representatives of
labour and industry. (See p a r a g r a p h 93 (b) and (c) below.)
(d) Greater recourse will be necessary to non-competitive contracts.
Generally also greater elasticity may be necessary in contract
procedure.
93. If the policy of creating a shadow armament industry is adopted, the
following problems will arise :—

(a) The Provision of A dditional Machinery, &c.

The Defence Departments are responsible for taking executive action to
ensure the necessary extensions, rearrangement and provision of the additional
machinery, jigs, gauges and machine tools of the firms allotted to them. The
requirements of the selected firms would be assessed by the Departments
concerned or by the Supply Board Technical Establishment^ as necessary in con­
sultation with the firms, but the actual orders for machinery, & o , would usually be
placed by the firms themselves. A good deal of exploratory work in this
connection has already been done by the Supply Board Technical Establishment
working in pursuance of the policy concerted at the P r i n c i p a l Supply Officers
Committee.* Machine tools are the bedrock of all production. Delays will,
however, occur in their provision, as the machine tools industry in this country is
at present swamped with work, having orders both from home and abroad for
several months ahead. Moreover, there is a shortage of skilled labour. Unless
arrangements are made to w a r n this industry of the probable increased require­
ments, if possible w i t h some indication in detail of the extent and n a t u r e of orders
contemplated, so. t h a t the necessary expansion of their works can be carried out
in time, an inevitable delay of from six to nine months may occur before the
industry can start to deliver the additional quantities of tools required.

(b) Co-operation of Industry : and Method of Collaboration.

We are convinced that it will only be possible to create the " shadow
armament i n d u s t r y " in consultation with industry itself. Selected representa­
tives of the industry and the organisations concerned in the expansion of industry
for war production (including the machine tool manufacturers) must be taken
into confidence and the defence requirements problem explained to them by a
Minister or Ministers, preferably the P r i m e Minister. I t will be necessary to
enlist not only the goodwill of the manufacturers, but also their ideas and
productive experience. The mobilisation of industry for the purpose will need a
g r e a t deal of organisation w i t h i n industry itself, a n d can only be gradually
developed. The help of the Advisory Panel of Industrialists (Lord Weir,

* The Principal Supply Officers Committee under the Chairmanship of the President of tire
Board of Trade is responsible for advising the Committee of Imperial Defence on Supply policy.
The Supply Board under the direction of the Principal Supply Officers Committee is
responsible, in conjunction with the Board of Trade, for preparing and maintaining estimates of
war requirements of the nation, of raw materials. and manufactured products,, arid for
ascertaining the productive capacity of the country required to meet our war requirements, j ; .
The Supply Board Technical Establishment is a special establishment administered by the
War Office, and charged with the duty of studying in peace war manufacturing problems in
connection with armament stores on behalf of the three Defence Departments.
Lord Riverdale and Sir J a m e s Lithgow) in this connection would be invaluable,
and the Federation of B r i t i s h Industries has already expressed a willingness to
play its p a r t . On the Government side the programme must be planned in its
sequence and detail in the first place by the Defence D e p a r t m e n t s in close
association with the T r e a s u r y ; and then co-ordinated by the P r i n c i p a l Supply
Officers Organisation, in p a r t i c u l a r by the Supply Board, which will also deal
with priorities as between the Defence Services, subject, we suggest, to appeal to
our Committee in the event of a deadlock.

(c) Provision of Labour.

I t will be appreciated t h a t increased orders for w a r m a t e r i a l will necessitate
a large increase in the amount of skilled and unskilled labour required in t h e
engineering industry and generally, of which there is at present a considerable
shortage, not only for civilian firms, but even for the Royal Ordnance Factories
and the Royal A i r c r a f t Establishment a t Farnborough. Steps will therefore
have to be planned, both by Government Departments and the firms concerned,
to t r a i n the type of personnel required, and consultation w i t h the T r a d e U n i o n s
will be necessary.

(d) Prevention of Profiteering.

This is a danger which must be a n t i c i p a t e d a n d will need the firmest
handling. I t is not only a question of safeguarding t h e t a x p a y e r against
unjustifiable charges; if t h a t were all, the existing contracts branches of the
three Defence Departments are, we believe, quite capable of dealing w i t h
extortionate tendencies on the p a r t of any company or firm to which they may be
giving orders. I t is essential, in addition, t h a t the public i n general, a n d labour
in particular, should have no excuse for any feeling or fear (however unjustified
in reality) t h a t contractors are t a k i n g advantage of the country's needs to feather
their own nests. E n s u r i n g public confidence on this point is a vital condition
if the defensive equipment of the country on the necessary scale is to be success­
fully achieved. From this point of view—and in no s p i r i t of criticism towards
the regular contracts branches—we recommend to the consideration of the Board
of A d m i r a l t y a n d the A r m y Council the special arrangement adopted by t h e
Air Council in connection w i t h the air force expansion scheme, viz. : the asso­
ciation ad hoc of a small committee of well-known business men w i t h the regular
contracts branch. This arrangement is working quite smoothly and h a s proved
the utility of providing a ' ' lightning conductor ' ' for suspicions of profiteering.
If a similar scheme were applied to the A d m i r a l t y and W a r Office, the necessary
inter-relationship would be insured through the agency of the existing Contracts
Co-ordinating Committee.
B u t there is another sphere of potential profiteering quite distinct from the
contractors and sub-contractors to Government Departments, and t h a t includes
the whole range of r a w and semi-wrought materials (such as steel, aluminium, &c.)
needed by the contractors and sub-contractors. Precautions against profiteering
in this field are, of course, of the first importance; and we recommend t h a t the
Treasury, in conjunction w i t h the Board of T r a d e and the other Departments
concerned, should take u p this question at an early date w i t h a view to ensuring
the necessary safeguards.
(e) Allocation of Firms to Defence Departments.
I n order to obviate overlapping, the Supply Board and its a p p r o p r i a t e Sub-
Committee should (as p a r t of the functions referred to in (&) above) complete, at
an early date, the allocation of firms between Defence Departments, on the­
principle t h a t firms, whose production is required by a Defence D e p a r t m e n t in
war, should have the necessary proportion of their capacity available to t h a t
Department for production in peace.

Manufacture in Government Factories.

94. So far we have dealt w i t h the considerations which apply mainly to.
manufacture in or by the trade. There remains the case of the Government
factories. To complete our w a r requirements there is a specialised kind of
output, which is either non-existent in the t r a d e or covers so small a proportion
of our eventual requirements t h a t we must rely largely (at all events at the earlier
[12270] ' E 2
stages) on Government factories. This mainly consists of such categories as
explosives and propellants, the filling of shells and cartridges, and fuzes, bombs,
mines and torpedoes; and we see no option but to extend our Government factories
and to p u t down the necessary capital.

Cost of Measures Recommended.

95. I t will be recognised t h a t this Section deals with the whole crux of
the problem, and our productive capacity must be enormously enlarged.
I t would be premature to estimate the costs of the measures for increasing
factory capacity, both in the trade and in Government Factories referred to in
the preceding paragraphs, but at our request tentative figures have been supplied
by:-
The W a r Office : £16,000,000 (Appendix I I to Schedule I I ) ; and by
The A i r Ministry : £10,100,000 (Appendix A to Schedule I I I ) .
The A i r Ministry total includes the sum of £2,100,000 required so t h a t
immediate measures can be taken to expand the capacity for the manufacture of
bombs in this country, which at present is very small.
The total expenditure under this head is therefore put conjecturally at
about £26,100,000, but it should be realised t h a t expenditure on industrial
production and provision of reserves (which will itself involve provision of
special machinery) are closely inter-related. The figure of £16,000,000 given
by the W a r Office is, however, entirely dependent on the success which attends
our policy of expanding industry to meet our requirements. If this policy fails
it will be necessary to open up more Government Factories, and the figure of
£16,000,000 will accordingly be increased. I t is therefore true to say t h a t the
figures quoted above can, a t present, hardly be regarded even as approximate.

State of Preparedness achieved by 1939 without Special Measures to increase

Factory Output.
96. This question, which is referred to in p a r a g r a p h 89 (&), is one which
does not affect the Navy, as for practical purposes no special measures are
considered necessary, and any expenditure for this purpose would be relatively
small.
97. As regards the Army, we should by the end of the financial year
1938-39 still be dependent on our existing resources plus such contractors
a s might be persuaded to enlarge their equipment. Our " w a r potential " would
stand practically as it stands to-day (e.g., in the case of ammunition requirements
a deficiency to the extent of some 85 per cent, in the first year of war), all of
which would have to be created after mobilisation.
The first contingent of the Field Force would still be short by 50 per cent, of
i t s present deficiencies and have no " war potential " behind it. I t might be
maintained perhaps four months in the field—a repetition of 1914.
W i t h reference to the alternative question of how long a period would be
required—in the absence of special measures to increase output—to reach the
state of preparedness referred to in p a r a g r a p h 89 (a), here again we must assume
t h a t the " w a r p o t e n t i a l " would be practically non-existent for many items
required. The corollary is t h a t we should have to create and hold in peace time
reserves sufficient to see us through the period required for the development of
" w a r potential," which must be estimated at about a year. (Itwill be remembered
t h a t in 1918, after the Ministry of Munitions had been in existence well over two
years, to build and get into production a new factory took a full twelve months.)
W e estimate that the stocks to be h e l d ' i n reserve as provided for in this
Report would have to be nearly doubled (measured by money values, which gives
a figure of £150-200 million which we might spend in 15-20 years); but it must
be remembered t h a t the very long period of peace, say, u p w a r d of twenty years,
required for the accumulation of such stocks cannot be guaranteed.
98. I n the case of the Royal A i r Force, on the assumption t h a t the aircraft
a n d engines required to complete the present expansion programme have actually
been produced by the 31st March, 1937, we anticipate that the enlargement of
the industry for t h a t purpose will suffice also to secure the production by the end
 ti 13

of 1938-39. of the numbers of aircraft and engines, & c , required for the scale of
reserves which we propose to accumulate in peace-time.
A s regards the position on the outbreak of war, if no special measures had
been taken to provide in addition a " war p o t e n t i a l , " the position would be as
follows : —
D u r i n g the first year of w a r an o u t p u t of a i r c r a f t and engines will be required
of approximately eight times the maximum annual o u t p u t reached by the I n d u s t r y
in the course of supplying our requirements to complete our reserves on the scale
now proposed. I t is unlikely t h a t more than one-third of the total w a r require­
ments could be obtained from firms normally engaged on aircraft and engine
production, allowing for increased shifts and other means for accelerating output.
The balance could only be obtained by t u r n i n g over suitable outside firms to
aircraft and engine production; but in the absence of the special measures
recommended in this section of our report there would be a long delay before these
new firms could come into production, a n d t h a t interval would spell disaster to us.

Recapitulation.
99. The subject dealt w i t h in the preceding p a r a g r a p h s is so vital to
our security t h a t we make no apology for briefly r e c a p i t u l a t i n g the points.
If we a r e involved in w a r a n d are to have a n y chance of successfully
defending ourselves we must ensure the availability of the necessary material
equipment of all kinds by a d o p t i n g one or other of the three following methods : —
(i) Create a n d hold in peace-time reserves on such a scale as would suffice
to cover the period, however long, needed for the conversion—without
previous preparation—of our peace industries into w a r i n d u s t r i e s ;
(ii) Organise, for war, our industries in peace-time so completely as to
enable the greater p a r t of the w a r reserves to be dispensed w i t h ;
(iii) Combine these two methods but on a much lower level, i.e., build u p
in peace-time reserves sufficient for a limited period after the outbreak
of war, and simultaneously plan a n d a r r a n g e our i n d u s t r i a l capacity
in peace-time so t h a t in the interval assured by these reserves it is
able to t u r n over to full w a r production
Method No. (i) would take years to complete and would be very uneconomical
owing to equipment becoming obsolescent. Method No. (ii) is unthinkable in a
democratic country like ours. Accordingly i t is the last method, No. (iii), which
we recommend as the only practicable alternative to doing nothing at all.
100. I n conclusion we must enter a caveat that, in the most favourable
conditions it will be impossible to carry out the full programme of supply for
the emergency of w a r by the 31st March, 1939. (See Schedule I V , p a r a g r a p h 5.)

VIII.—Miscellaneous Requirements.
101. I n preceding Sections of this Report we have dealt w i t h the major
requirements of our three Defence Services. There are, however, a number of
matters closely connected with our Terms of Reference, to which we must d r a w
attention if our Report is to present a complete picture of our defence
requirements.

Air Raid Precautions.

102. A survey of our defence position would not be complete without
reference to A i r R a i d * Precautions. W e therefore asked the A i r R a i d
Precautions Department of the Home Office to supply us w i t h a statement of their
estimated needs over the next few years.
103. Their Memorandum on the subject is appended as Schedule V, from
which i t appears t h a t the provision of Respirators (which has already been
accepted by the Cabinet) will amount to a possible total of £ 4 million plus
some £400,000 for corresponding protection for children. Other items, not
yet so clearly defined, are Protective Clothing, Bleach Powder and Hospital'
equipment, amounting to some £610,000. I n addition to the large expenditure
which may eventually fall on the Home Office, considerable sums, which cannot at
present be estimated, may have to be spent by the Service Departments.
104. I n their General Remarks on the question the A i r R a i d Precautions
Department again call attention to the dangers to which our vital industries are
liable in the event of a i r attack, a subject which is of ever-increasing importance
and anxiety. Information on this subject is being collected, a n d as material is
available the Department will p u t forward special appreciations for the
consideration of the Committee of Imperial Defence.
Woolwich, Billing ham and Ardeer.
105. The dangers to which Woolwich Arsenal may be exposed have already
been recognised, but we feel we should bring to particular notice the very
important establishments of Imperial Chemical Industries Limited at Billingham
and Ardeer. A t these factories exist the only plant in the country for the'
exidation of ammonia and nitric acid, both essential components of explosives
and propellants. Centralisation of so important a factor of our munitions
production in two places, and especially t h a t at Billingham, which to-day is
within reasonable air range of Germany, constitutes a veritable " Achilles''
heel." The size of the plants is so great, and so much money has been expended,,
t h a t there can be no question of moving them, but it is for consideration whether
every encouragement should not be given to the duplication, in a safe p a r t of the
country, of such component p a r t s as are absolutely vital.

Secret Service.
106. The attention of the Committee has been d r a w n to the difficulties
imposed on our Secret Service by lack of funds, and it is indispensable that
increased provision should be made for this most important purpose. Informa­
tion is, for obvious reasons, far more difficult to obtain now than formerly in all
the countries t h a t really matter, particularly Germany and J a p a n . If the
allowance under this head is not augmented, and very largely augmented, t h e
organisation cannot be expected to fulfil its functions, and this country will be
most dangerously handicapped. I t is difficult to assign an exact figure to this
service, on which increased demands are continually made; but nothing less t h a n
£500,000 will be really adequate.

Armed Merchant Cruisers and Defensively Equipped Merchant Ships.

107. The A d m i r a l t y make provision for supplementing the cruiser fleet by
the conversion of certain merchant ships into Armed Merchant Cruisers after
outbreak of hostilities. By the Washington Naval Treaty the preparations which
can be made in ships in time of peace are limited to the necessary stiffening of
decks for the mounting of guns not exceeding 6-inch calibre. Should this
limitation not be repeated in any future treaty, it would be possible for more
complete measures of p r e p a r a t i o n to be made. No such financial provision is
made in the Admiralty proposals, however, in view of the uncertainty of t h e
situation.
The Admiralty have in their proposals made provision only for the low-angle
guns, ammunition, paravanes and general stores required for both A r m e d
Merchant Cruisers and Defensively E q u i p p e d Merchant Ships. The general
policy of equipping these vessels with improved arrangements for anti-aircraft
defence is under consideration. When this is settled, provision for high-angle
guns and equipment, & c , will require annual consideration i n the normal
estimates.
Encouragement of Commercial Air Enterprises.
108. I n this Report we do not p u t forward any proposals for increased
financial assistance to commercial air enterprises, as we are aware t h a t the direct
value to Imperial Defence of subsidies to Commercial A i r Enterprises is much
less than that of an equivalent expenditure on the Royal A i r Force. Nevertheless
we recognise that, for reasons not directly connected with Imperial Defence, such
as national prestige, the improvement of communications and postal services, it
is the policy of the Government to develop civil aviation. W e wish to record our
view, subject to the above remarks, t h a t such development is of distinct value to
Imperial Defence. T h e establishment of bases, trained personnel, factory­
production, experience in design and the a i r c r a f t themselves—including, in
particular, flying-boat services which could be used to augment the reconnaissance
facilities of the Navy and other Services in the event of hostilities—are all
valuable elements in our w a r potential.

Forces in the Colonies.

109. I n view of the present world situation, it is most i m p o r t a n t t h a t the
regular and auxiliary forces in the Colonies, M a n d a t e d Territories, & c , should
be maintained in the highest state of efficiency. The cuts carried out in view of
financial stress d u r i n g recent years have reduced these forces to a m i n i m u m a n d
early consideration should be given to restoring them to their former strength.
The importance of full support being given to the auxiliary forces should be
especially emphasised.

. The Dominions.
110. The attention of the Dominions should be directed to the measures
which H i s Majesty's Government in this country have in contemplation and to
the reasons which in their view render these necessary. Their co-operation in
reducing t h e burden, or alternatively in increasing the scale of security provided,
should be sought in suitable terms. The A i r M i n i s t r y have included in their
requirements the necessary material for e q u i p p i n g 16 squadrons from the
Dominions, as it is thought t h a t in a major w a r the most useful form their help
could take would be to send the personnel sufficient for a certain number of
squadrons to this country, the necessary equipment being provided here. The
W a r Office, however, are not able to estimate w h a t ma)^ be required for land forces
from the Dominions a n d I n d i a in similar circumstances and no allowance has
consequently been made on their behalf.

The Remedying of Deficiencies in India.

111. I n our first R e p o r t we made a recommendation t h a t the Government
of I n d i a should be urged to expedite their " worst deficiencies " in order to keep
parallel w i t h our own action in the matter. W e fully appreciate t h a t financial
considerations must h a m p e r such action, but if the Home Government is now
to take yet further steps, a n d at great cost, t o put our defences in order, we
consider t h a t it is only fair to expect I n d i a also to loosen the purse-strings.
There is wide scope in I n d i a for improving the readiness for w a r of the Army,
the Royal A i r Force and of her Local Naval Defences.

IX.—Cost a n d Finance.
112. Our Terms of Reference, as stated in p a r a g r a p h 5 of this Report, leave
entirely open the method by which the programmes of the Defence Services are to
be financed. But we have worked on the assumption in those Terms of Reference
that­
" By the end of the financial year 1938-39, each Service should have
advanced its state of readiness to the widest necessary extent in relation to
the military needs of national defence w i t h i n the limits of practicability."
On this basis, as stated in p a r a g r a p h 35, our proposals for the three Defence
Services would result in an increased annual expenditure over the £124 million
(original Estimates) voted for Defence i n 1935, of the order of £49,650,000 in
1936, £86,750,000 in 1937, £102,400,000 in 1938, £88,450,000 in 1939, and
£90,050,000 in 1940. I n other words, an increased expenditure, compared to the
1935 rate, of about £239,000,000 in the next three years, and a further
£178,500,000 in the following two 3 ears. I n addition, there is a proposed
r

increase in the Home Office vote of £1,847,000 a year for each of the next three
years, for Air Raid Precautions equipment; and a recommendation t h a t
increased provision should be made for Secret Service work u p to £500,000
per annum.
 1 1 3 . We ivould again emphasise that this forecast is necessarily speculative,
and is merely an attempt to indicate the order of magnitude of the expenditure
involved. No allowance has been made therein for variations of rates and prices.
114. The detailed expenditure on each Service allocated to the various items
are contained in Schedules I, I I and I I I annexed to this Report. For convenience,
the financial aspects of the Service proposals are summarised in Table I (Navy),
Table I I (Army) and Table I I I (Air Force). A general statement showing the
totals of each Service is attached as Table I V . These Tables have been worked
out, so far as possible, on a common pro forma, and in each case sub-table A shows
capital expenditure, sub-table B net increase over 1 9 3 5 provision in annual
recurrent charges arising from present proposals, the capital cost of which is
set out in sub-table A ; and sub-table C gives a rough forecast of net estimates
for the next five years if the proposals are approved. I n studying these tables it
is of great importance that the accompanying footnotes should receive close
attention.
I n the case of the Navy, an additional sub-table is appended (Table I A * )
showing the costs of naval construction. -It will be appreciated t h a t financial
provision for naval construction cannot conveniently or appropriately be shown
either as a capital cost or as an annual recurrent charge due to capital costs..
For that reason i t is convenient to show costs under this head in a separate forim
W e would call attention to the fact referred to in p a r a g r a p h 4 7 , t h a t the r a t e
of naval construction after t h e financial year 1 9 3 9 will be governed by t h e
continuation or otherwise of Naval Treaties, under which, at present, our naval
forces are limited.
1 1 5 . A d d i t i o n a l to Service expenditure, but a form of expenditure which
should be classed as " Defence," are the costs for A i r R a i d Precautions. T h e
sum totals, as given in Schedule V and summarised in p a r a g r a p h 1 0 3 , are as
follows: Provision of Respirators and similar devices for children, £ 4 , 4 0 0 , 0 0 0 ; :
Protective Clothing, Bleach Powder and Hospital Equipment, £ 6 1 0 , 0 0 0 . W i t h
a three year spread-over, these would involve an annual charge on Home Office
Votes of £ 1 , 8 4 7 , 0 0 0 .
1 1 6 . I n p a r a g r a p h 1 0 6 we have further recommended t h a t increased
provision should be made for Secret Service work up to £ 5 0 0 , 0 0 0 per annum.
1 1 7 . Throughout the Report we have referred to a number of matters which
are still under discussion or on which it is not possible, for various reasons, to
make any recommendations at the present time. The most important, from t h e
financial point of view, of these outstanding items are as follows : ­
(a) Possible expenditure in further modernisation of old capital ships should
J a p a n increase the numerical strength of her battle fleet by the
retention of old capital ships in addition to any replacement she may
construct ( p a r a g r a p h 5 6 ) .
(6) F u r t h e r increases in reconnaissance aircraft to assist the Navy in the
protection of trade routes and Naval Bases (paragraphs 8 0 (iv)
and 81).
(c) Possible expenditure in the provision of a Fleet Air A r m base ashore,
in addition to the figure of £ 2 million already proposed
(paragraph 6 1 ) .
(d) Possible expenditure in providing a Naval Base in Cyprus (para­
graph 6 2 ) .
(e) Ultimate expenditure involved in the provision of additional I n f a n t r y
Battalions not at present recommended owing to recruiting limitations
(paragraph 74).
(/) Additional expenditure on the defences of Hong Kong if the present
restrictions under Article X I X of the Washington Treaty are
removed (paragraph 7 1 ( & ) ) .

Expenditure in Foreign Countries.*

1 1 8 . I n considering the financial aspect of our proposals we feel we should
d r a w attention to what has been happening abroad. Most of the great Powers
have for some time past relied on borrowing to meet some p a r t of the cost of their
* F i g u r e s quoted are at current rates of exchange.
F i g h t i n g Services. The procedure adopted varies. I n some countries specific
items of defence expenditure are met from loans. I n others the r a t e of expen­
diture on armaments results in a deficit on the Budget as a whole which is met by
borrowing.

Japan.
119. The army a n d navy account for £ 5 9 - 7 million, out of a total expen­
diture of £ 1 2 3 - 4 million, while the deficit on the Budget is £ 4 5 million (1935-36).

United States of A merica.

120. Items described as emergency expenditure correspond broadly to the
Budget deficit. The items of expenditure on the Navy and W a r D e p a r t m e n t s
which fall under the head of emergency expenditure (i.e., expenditure creating
employment) amounted to £ 4 2 - 3 million in 1934-35 and £ 2 2 million in 1935-36.
The total annual expenditure, from revenue and loans combined, of the U n i t e d
States on defence has risen from £ 1 1 4 million in 1933 to £180 million in 1935.
These figures include no provision for non-effective charges (e.g., pensions), which
in the case of the B r i t i s h estimates for 1935 represented no less than £18 million
out of the total of £124 million.

France.
121. Special borrowing powers have been obtained to meet specific items of
defence expenditure, and there has also been a series of deficits on her Budget.
Thus, in 1934, the law of the 7th July, 1934, authorised special borrowing
powers of £ 4 1 - 8 million, while a further £ 1 0 - 7 million was authorised by the
law of the 4th J a n u a r y , 1935. E x p e n d i t u r e under these laws will continue
in the year 1936. A n ostensible reduction of the defence expenditure
included in the o r d i n a r y Budget from £134 million in 1935 to £89.5 million
in 1936, to enable the Budget to be balanced, is accompanied by the creation of
Fonds d'Armements financed by borrowing, from which £ 7 3 million is to be
spent in 1936.

Germany.
122. The real state of the Budget since the accession to power of H e r r Flitler
has not been made public. According to public returns the debt increased by
7,000 million marks between December 1932 and J u n e 1935. This sum is equiva­
lent at the old r a t e of exchange to £350 million sterling, but a t the official r a t e s
now prevailing to £570 million sterling. W h i l e this increase w a s no doubt in p a r t
for Public Works, a substantial sum was certainly for armaments. B u t it is known
that there are a r m a m e n t bills and Bank advances and liabilities in respect of
Government guarantees which are not included in the published debt returns.
According to confidential information the a d d i t i o n a l liabilities so incurred in t h e
same period have been p u t as high as 12,000 million marks (£600 to £980 million
sterling) and are alleged to be increasing a t the r a t e of 500 million m a r k s a month
(£25 to £ 4 0 million sterling). I n terms of sterling there is reason to believe t h a t
the expenditure on re-armament (outside the Budget) was between £500 million
and £1,000 million in its peak year, and t h a t such expenditure has been r u n n i n g
round about £500 million a year, though i t may now be beginning somewhat t o
diminish.

X.—Observations.

The Difference between this Enquiry and that of 1934.

123. I n reaching the conclusions which we now recommend, we think it
relevant to recall t h a t the circumstances of our present enquiry differ completely
from those leading u p to our first Report (D.R.C. 14, also C P . 64 (34) ). O u r
earlier Report, by the instructions under which we were working, w a s concerned
[12270] F
solely w i t h our " w o r s t deficiencies" which, if possible, were to be met on a
five-year programme. U n d e r our present terms of reference, however, we are
required to work out " programmes on the assumption t h a t by the end of the
financial year 1938-39 each Service should have advanced its state of readiness
to the widest necessary extent in relation to the military needs of N a t i o n a l defence
a n d within the limits of practicability."
124. I t is not necessary to recapitulate the causes, chiefly in the inter­
national situation, which have necessitated, within a period of less t h a n two
years, so great a change in the general outlook on defence matters. B u t the-fact
serves to emphasise t h a t the subject of Defence Requirements is not one which,
after decisions have been reached, can be dismissed for any long period a s a
matter which has been finished and done with. New events will occur, which in
the majority of cases are likely to increase, rather t h a n to reduce, our commit­
ments and risks. There can therefore be no finality in this or any later review
of Defence Requirements.

Tendencies of the Future.

125. The ambition, caprice, or brutality of man is not the only element of
doubt or difficulty. The march of science is a factor which will tend in the future,
even more p e r h a p s than in the past, to enlarge defensive needs; the submarine,
the aeroplane and the tank are obvious illustrations. Not only have these to be
included in our armaments (in addition to and not in substitution for other
weapons), but their antidotes have also to be invented, purchased and manned.
The complications introduced into modern w a r will tend to grow, a n d a s an
instance may be quoted the ever-increasing range of a i r c r a f t which in the near
future will necessitate defence measures at many places hitherto considered
immune from air attack, and on a scale which we should be wise not to
under-estimate.
126. W e have done our best in this R e p o r t to meet as satisfactorily as
possible our responsibilities in respect of the defence of the Empire against the
principal dangers to which it is exposed; but there are formidable difficulties,
particularly in assessing at their proper value the risks to which we are exposed.
We wish to emphasise t h a t in calculating our Defence Requirements we have
deliberately avoided any exaggeration of these risks and difficulties, and have
based ourselves on a conservative estimate of what is necessary for security. Our
Report, however, would be incomplete if we did not mention its limitations. The
first of these difficulties concerns Maritime Power, on which our vital overseas
communications depend.

Maritime Power.
127. I t is well to remember t h a t Maritime Power, once it is achieved, has
this great advantage—-it is not easy to challenge it. Great navies cannot be built
in a night, they are only created by a strong and consistent naval policy over a
prolonged period with much financial sacrifice. Once supreme, the efforts of
rival nations can be watched and guarded against and the lead kept.
I t is an inevitable corollary that, if a great Maritime Nation neglects its
Navy, i t must go through years of danger and anxiety before i t can regain its
old position of security.
128. I n certain important respects we are well on our way to lose our sea
security. Our serious deficiency in cruiser strength is well known. Our Battle
Eleet will die of old age at the same time as those of the United States a n d J a p a n ,
and, except fox such new construction as is completed before t h a t time, the
existing Battle Fleets of these three great Powers would be reduced almost to a
common zero level. Other nations may shortly be in a favourable position to
challenge us a t sea; Germany is in process of building a brand-new Fleet and
h a s started a lap ahead.
On the other hand, we still have something to rely on in our Naval experience
a n d the fact t h a t we have turned our national engineering skill into naval
channels, also in our shipbuilding capacity, our great dockyards and bases, and
the naval instinct of the nation which enables the Fleet to be manned w i t h superior
seamen.
 If, therefore, we take u p the task wholeheartedly and accept whatever
sacrifices a r e necessary, the position can, we are certain, be retrieved gradually.
The world knows we can do it and seeing us make a determined s t a r t may realise
the futility of challenging us.

The Uncertainty of the Future.

129. A second m a i n difficulty is t h a t the conditions of the world to-day a r e
such that the f u t u r e course of events affecting I m p e r i a l Defence is more t h a n
usually uncertain. Elsewhere in this Report, for example, we have referred to
the difficulty, u n d e r the system of collective security, of a p p r a i s i n g the q u a r t e r ,
extent and occasion of the dangers we may have to meet, using for purposes of
illustration the M a n c h u r i a n dispute of 1931-33 and the Italo-Abyssinian d i s p u t e
of 1935. No-one can foretell when or where the next emergency will arise, n o r
the extent to which our action may be trammelled by w h a t has happened a t Geneva
in 1935. I t may be t h a t the arguments employed so effectively to secure t h e
application of sanctions to I t a l y may be used w i t h inexorable logic to secure
our co-operation in the application of sanctions in some dispute (e.g., in Central
or Eastern Europe), from which the country might otherwise prefer to stand
aloof. A powerful State like Germany or J a p a n , h a r b o u r i n g the same resentment
as Italy to-day, might react to sanctions in a very different manner and w i t h
very different results to ourselves.
130. So far as Germany is concerned, one of the difficulties in p r e d i c t i n g
the course of events is the meagreness of our information of the capacity of t h a t
country for offensive action. Our own proposals have been worked out on the
basis of such knowledge as we possess, and on a n expert appreciation of German
capacity based on t h a t information; but we have no certainty t h a t our information
is complete. A recent illustration of effective concealment on Germany's p a r t is
to be found in her naval rearmament, on which our Intelligence proved defective.
We know something of Germany's industrial development and capacity, but it
would be a dangerous illusion for us to infer t h a t we have a reliable measure of
what she can d o ; still less of w h a t she may be able to do in the near future. T h e
best that we can do is to strengthen our Intelligence system and our own w a r
potential (output capacity), so as to be able to increase our forces correspondingly
in the case of a German increase. But, although we have included recommenda­
tions for both these purposes, we can give no assurance, especially in r e g a r d to
aircraft production, t h a t we may not be at a serious disadvantage compared w i t h
Germany.

The Danger of Sudden Attack (particularly by Air).

131. A n o t h e r difficulty is the increasing danger of sudden attack upon this
country, which has always been recognised to apply w i t h special force to the case
of Germany. I n 1907-08 a very strong Sub-Committee of the Committee of
Imperial Defence, under M r . A s q u i t h ' s Chairmanship, which was considering
Lord Roberts 's case on the risks of invasion by Germany, after exhaustive
examination reached the conclusion—
T h a t the possibility of a surprise attack being made upon this country
d u r i n g normal diplomatic relations is not sufficiently remote to be ignored.
They agree w i t h Mr. Balfour t h a t if the German Government believed t h a t
the adoption of such a plan made the difference between failure and success
it is conceivable t h a t they might resort to i t . "
The above conclusion was mentioned by Mr. A s q u i t h in a speech in the House of
Commons on the 29th July, 1909, and was endorsed by another equally strong
Sub-Committee under Mr. A s q u i t h ' s Chairmanship in 1913-14.
132. German behaviour since 1913 has done nothing to weaken the above
authoritative opinion. Whatever may be the correct view as to a surprise attack
" during normal diplomatic relations," a sudden attack when relations are
somewhat strained (as they have been for months between I t a l y and ourselves)
cannot be ruled out, more particularly if sanctions were being applied.
133. W h a t e v e r the risk of sudden attack, the form it would take to-day is
infinitely more serious t h a n it was before the war. I n 1914 the worst risk was
[12270] 2 F
considered to be an invasion or r a i d across a sea which our superior naval forces
would have rapidly controlled. To this must now be added the risk of an air
attack of great, and possibly unknown, strength. No doubt Germany would have
t o weigh the effect of a sudden air attack on world opinion and its reaction on
herself; but if successful it would fulfil the Teutonic conception of a short, sharp
war, and we do not see how it could be excluded from the range of possibilities.
W e are not suggesting t h a t the danger of sudden attack is such t h a t it must be
met, any more than it was before the Great W a r , by m a i n t a i n i n g our forces
continuously on the alert, but in our view it should enjoin a relatively high level
of readiness and of vigilance on the p a r t of the Government, the Foreign Office
a n d the Defence Departments.

The Importance of Public Morale.

134. A n important factor in a German decision to make a sudden
aggression would be their estimate of its effect upon our own population. For
centuries our people have been exempt from risk of armed invasion or occupation,
which weighs so heavily on Continental peoples and to some extent prepares their
minds for endurance. As a nation we are still free from the dangers and
ignominy of armed invasion or occupation, but our Capital and our p r i n c i p a l '
cities and manufacturing districts are in some respects as exposed to a i r attack
as those of most Continental nations. We are confident t h a t our people are at
least as capable of enduring such attacks as any other race; but their minds must
have been steeled by foreknowledge and by understanding of w h a t to expect and
w h a t to do to minimise casualties; they must feel t h a t the utmost is being done
for their protection and defence; and they must be encouraged by the certainty
t h a t the people who have unloosed this brutality are being themselves made to
feel w h a t it is like, in equal or greater degree.
135. I n our previous R e p o r t (D.R.C. 14, also C P . 64 (34), p a r a g r a p h 162)
we drew attention to the state of moral disarmament of the population.
Since then a good deal has been done by the Government to improve the
position; for example, by the increased Programmes, the W h i t e P a p e r on
Defence, Debates in Parliament, the launching of the A i r R a i d Precautions
Scheme, and speeches by Ministers. But, as recruiting figures testify, much
remains to be done to awaken the public mind to the realities of the situation, and
the campaign for the enlightenment of public opinion must be continued—in a
spirit not of panic, but of realism. I n particular, we suggest t h a t the importance
of defence should be emphasised in our educational system at least to the same
extent as, and indeed as an integral element in, the p r o p a g a n d a for peace and
the League of Nations that is carried on to-day in our schools.

Co-operation of Government Departments.

136. The Defence Services will need in the future even greater support
on the p a r t of Ministers and Departments if the proposed programmes are to
have a prospect of success. For example, as is well known, the recruiting
situation in the Army is very unsatisfactory and certain approaches to the
Ministry of Labour to enlist their co-operation have not proved successful. I t
was suggested t h a t recruits could be attracted to the A r m y in connection w i t h
the schemes for the relief of the Depressed Areas, but on enquiry it was found
t h a t no encouragement could be given to active steps at T r a i n i n g Camps and
Centres to induce men to enlist. Whilst it is not for us to comment on this
policy, which is quoted as an example, we feel strongly t h a t unless the full
co-operation of all the Departments of State is freely given there is the likelihood
of delay, if not of failure, in our proposals for the rehabilitation of the Services.
137. Another aspect of the recruiting figures which merits the attention of
the Government in several of its Departments is the high percentage of rejections
of applicants for physical or medical reasons, which over a term of ten years
from 1923 never fell below 50 per cent. I n the year ending the 30th September,
1934, no less than 68 per cent, of the applicants for the A r m y were rejected on
account of physical, educational or other defects, * which is not flattering to the
s t a n d a r d of physique of the rising generation. We suggest t h a t the attention
* Cmd. 4821 ( 1 9 3 5 ) , paragraph 2.
 37 3 U4

of the M i n i s t r y of Health, the corresponding D e p a r t m e n t in the Scottish Office,

the Medical Research Council and the Board of Education (from the point of
view of physical training) be d r a w n to the vital importance to I m p e r i a l Defence
of an improved physical s t a n d a r d in the population.

Conclusion.
138. W e should like, in conclusion, to say t h a t we are fully conscious of the
very heavy expenditure over the next few years which our proposals involve,
even though those proposals are based on a reasonable appreciation of the inter­
national situation and do not provide a m a r g i n for all the possible contingencies
mentioned in this section of our Report. B u t we are convinced t h a t the situation,
both present and prospective, which we have h a d to review is grave enough to
require the most resolute effort on the p a r t of this country, and t h a t there can
be no salvation in half-measures. Except in so far as the country has in the
years since the w a r allowed its defences to deteriorate progressively, the situation
is none of our m a k i n g ; look in w h a t direction we may, we find a world increasingly
nationalistic, armed to the teeth, and influenced by rapacity and the doctrine of
force.
-

139. The B r i t i s h E m p i r e , as perhaps the extreme illustration of the " h a v e s "

of life, is not u n n a t u r a l l y exposed to ' ' the envy of less happier lands." I f then,
as we believe, E n g l a n d and the E m p i r e have still a contribution to make to
civilisation, and their survival is, therefore, w o r t h while, we feel t h a t a d d i t i o n a l
insurance against the accumulating dangers is the alternative to the e p i t a p h
" E n g l a n d h a t h made a shameful conquest of itself."
 X L — S u m m a r y of Conclusions and Recommendations.

140. Our conclusions and recommendations may be summed u p as follows : ­

(1) The system of collective security provided by the Covenant of the League­
of Nations, which has been adopted by successive Governments with strong
popular support as the basis of our foreign policy, has been shown by recent events
to complicate the calculation of defence requirements. The M a n c h u r i a n episode
of 1931-33, and more especially the Italo-Abyssinian affair, show t h a t this system
is liable—
(a) to involve this country, as the only great sea-power in the League, in
unforeseen commitments at very short notice;
(&) to embitter our relations, almost without warning, with countries like
J a p a n , Italy and France, with whom we had deliberately cultivated
close relations in order to exclude them from the range of possible
enemies; and
(e) to produce unexpected reactions on our own security for which we were
totally unprepared (e.g., in the F a r East in 1931-33; in the
Mediterranean in 1935). ( P a r a g r a p h s 10 to 15.)
(2) From the point of view of national and imperial security it should be a
cardinal principle to avoid a situation in which we might be confronted simul­
taneously w i t h the hostility, open or veiled, of J a p a n in the F a r East, Germany
in the West, and any Power on the line of communications between the two.
( P a r a g r a p h 16.)
(3) Recent events accentuate the importance of a policy of accommodation
and friendliness with J a p a n as recommended in our first Report. ( P a r a g r a p h 16.)
Similarly as regards Germany it is very desirable t h a t we should respond as
favourably as circumstances permit—though circumstances are likely to impose
a concrete limit—to H e r r H i t l e r ' s desire to be on good terms w i t h this country
and t h a t we should do everything we can, in conjunction with France, to promote
and maintain friendly relations with Germany. ( P a r a g r a p h 17.)
.' - (4) Before I t a l y can so far recover from her present embarrassments as to
become a permanent factor in calculating our defence requirements, our long­
range policy should be so aligned as to ensure t h a t we shall never be in a position
of hostility to J a p a n and Italy at the same time, to say nothing of Germany,
without the certainty of French military support. ( P a r a g r a p h 18.)
(5) The outstanding feature of recent world events is t h a t a strong B r i t a i n
is essential to the peace of the world. The policy of collective security contained
in the Covenant can only succeed under the leadership of a strong and re-equipped
Britain. W i t h t h a t backing the League would be a far more effective instrument
for the maintenance of peace and as a deterrent to w a r t h a n it is to-day. To the
League system of collective security the alternatives are a more limited system
of collective security on the Locarno model; the pre-war system of alliances and
ententes; or isolation. For any of these systems to prove effective our armaments
must be raised to a far more effective s t a n d a r d t h a n has hitherto been aimed at.
( P a r a g r a p h s 19 to 23.)
(6) The following new considerations affecting the calculation of our Defence-
Requirements have arisen :—
(a) As the result of the principle of collective security our forces must be
more ready t h a n before;
(&) There is now the possibility of a hostile Italy on our main line of imperial
communications;
(c) As the one big Naval Power of the League of Nations, we may have t o
exhaust ourselves to the detriment of the balance of security against
J a p a n and Germany, who are outside it;
(d) As a result of the assumption by Germany of the r i g h t to build u p a new
navy free of the restrictions of the Treaty of Versailles, the Navy of
t h a t country (though fortunately now limited to 35 per cent, of our
own strength) has to be taken into account;
(e) I n view of the enormously increased capacity of output by Germany,
there is the possibility of attack from the air so continuous and concen­
trated, and on such a scale, that a few weeks of t h a t experience might
so undermine the morale of any civilian population as to make i t
difficult for the Government to continue the war. ( P a r a g r a p h 25.)
 (7) W i t h reference to (6) (&) above, the eventual position vis-a-vis I t a l y is as
yet too obscure to appraise in terms of defence requirements. The situation will
have to be watched carefully and a close study of t h e strategical problem in the
Mediterranean will have to be made. I n any event, it would be materially
impossible, w i t h i n the three-year period w i t h which this R e p o r t is primarily
concerned, to make additional provision for a hostile Italy. For these reasons we
have limited ourselves to the same hypotheses as in our first R e p o r t (D.R.C. 14,
also C P . 64 (34)), namely, the provision of an adequate deterrent to Germany
and J a p a n , and a protection to the U n i t e d Kingdom and the E m p i r e in these two
contingencies. ( P a r a g r a p h s 27-29.)
(8) The s t a n d a r d s of security at which we should aim are as follows : —
Navy.
A new s t a n d a r d of naval strength defined as follows : ­
(i) to enable us to place a Fleet in the F a r E a s t fully adequate to act on the
defensive and to serve as a strong deterrent against any threat to
our interests in t h a t p a r t of the globe;
(ii) to m a i n t a i n in all. circumstances in Home W a t e r s a force able to meet the
requirements of a war with Germany at the same time.
Included in (i) and (ii) should be the forces necessary in all p a r t s of the world,
behind the cover of the main fleets, to protect our territories and merchant ships
against sporadic attack.

A rmy.
(i) To m a i n t a i n garrisons overseas on the present general basis for purposes
of I m p e r i a l Defence;
(ii) to provide for the military share in Home Defence, which includes
anti-aircraft defence, Coast Defence and internal security;
(iii) to enable us to provide reinforcements a n d / o r a Field Force from Home
in time of emergency or war, w i t h adequate equipment and reserves.
U n d e r (i) and (ii) the most important requirements are a substantial improve­
ment in coast defences at Naval bases at Home and Abroad, and the completion
of the A r m y ' s share in the A i r Defence of Great B r i t a i n .
U n d e r (iii) the most important requirement is to organise a Field Force which
can be sent abroad at short notice for the protection of our vital interests, and to
enable us to honour our international obligations, p a r t i c u l a r l y under the T r e a t y
of Locarno, which would involve effective co-operation w i t h other signatories on
the Continent of Europe. This includes the occupation for ourselves and the
denial to the enemy of an advanced air base in the Low Countries.

Air Force.
W e regard as a minimum the strength already decided for the Royal A i r
Force at Home, viz. : 123 squadrons (1,512 first-line aircraft) to be completed by
A p r i l 1937. This figure was based on the assumption t h a t by t h a t d a t e the number
of German first-line aircraft will amount to some 1,500. I n the absence of any
agreement for the limitation of air forces there is, however, no guarantee t h a t
she will not build u p to an even higher figure of first-line strength. I t is therefore
vital t h a t the position should be kept under the closest continuous review.
I n addition we propose—­
(i) Provision of w a r reserves, w i t h o u t which the A i r Force could only fight
for a very short time;
(ii) strengthening of the air forces overseas and, in particular, those
' required to meet the possibility of w a r with. J a p a n in the F a r E a s t ;
(iii) additions to the Fleet A i r A r m to correspond to the naval p r o g r a m m e ;
(iv) additions to the Army Co-operation Squadrons (mainly auxiliary
squadrons) to provide the requirements of the four contingents of
the Field Force.

For all Three Services.

A n effective scheme for the expansion of industry in time of w a r and provision
of reserves of w a r material sufficient to m a i n t a i n them from the outset of w a r
until industry is able to supply their needs from current output. ( P a r a g r a p h 34.)
 Navy Programme and Requirements.

(9) The naval programme required to carry out the new s t a n d a r d of naval
strength proposed above cannot be worked out a t present, as it depends upon the
programmes of other Powers and upon the information which may be available
after the Naval Conference. I n any event, it is impossible to increase the Navy to
the new s t a n d a r d within the next three years owing to difficulties of material and
personnel unless resort is made to extraordinary measures such as those adopted
in the case of the Royal A i r Force expansion, which, in the opinion of the
Admiralty, would prejudice the efficiency of the Service. ( P a r a g r a p h s 37 to 41.)
We strongly recommend, however, t h a t d u r i n g the next few years ships
should be laid down early in the financial year instead of in the last q u a r t e r as at
present. ( P a r a g r a p h 42.)
(10) For the time being we must concentrate on the requirements of the
existing approved standard, doing.all we can at the same time to p r e p a r e for a
fresh programme to bring the Navy up to the new s t a n d a r d if it is approved by
the Government. We recommend t h a t the Government should at once approve
the new s t a n d a r d in principle and instruct the A d m i r a l t y —
(i) to work out the naval programme required to give effect to it as soon as
the necessary d a t a are available; and
(ii) to make suggestions as to any items in the new programme t h a t can be
p u t in hand before the expiration of the next three years. These will
probably be limited by material considerations to the smaller classes
of warship.
( P a r a g r a p h s 43 and 44.)
(11) To complete the needs of the existing approved standard the programme
we recommend includes :—
7 capital ships to be laid down in the period 1937-39 (2-3-2). (Para­
graphs 46 and 47.)
4 aircraft carriers (some of a smaller type) to be laid down in the period
1936-42. ( P a r a g r a p h 48.)
5 cruisers a year between 1936 and 1939. ( P a r a g r a p h 49.)
1 destroyer flotilla in 1936-37 and thereafter 1 flotilla in alternate years
up to 1942. ( P a r a g r a p h 50.)
Submarines, sloops, other small craft and auxiliaries at the same r a t e
as in the past, t h a t is to say about 3 submarines and 5 or 6 sloops a year.
( P a r a g r a p h 51.)
(12) The cost of the above construction programme is approximately £ 1 9 ^
million in 1936, rising to £36^ million in 1939. Thereafter it should fall, but
only if the quantitative restrictions of the Naval Treaties a r e renewed. Other­
wise it may increase. If the new s t a n d a r d of naval strength is adopted an
increased programme will be required involving additional expenditure not yet
calculable. ( P a r a g r a p h s 52 and 53.)
(13) The naval deficiency programme includes :—
Complete modernisation for 3 capital ships.
P a r t i a l modernisation for 4 capital ships.
(Further modernisation if quantitative restrictions are not renewed and
other nations retain their older capital ships.)
Construction of a further Boys T r a i n i n g Establishment.
35,600 increase in personnel between 1936 and 1942.
Fleet A i r A r m increase from 190 (the present figure) to 504 by 1942.
( P a r a g r a p h s 55 to 64.)

Army Programme and Requirements.

(14) The Army Programmes and requirements include :—
Field Force: First Contingent (Regular Army).
4 Divisions.
1 Mobile Division (6 mechanised Cavalry Regiments and a T a n k Brigade
with supporting arms and services).
 3 new A r m y T a n k Battalions (making, with the existing Battalion, one
for each division).
Speeding u p mobilisation arrangements to enable the Mobile Division
a n d A i r Defence Brigades to be disembarked on the Continent in a week, a n d
the remainder of the first contingent a week later. ( P a r a g r a p h s 65 to 67.)

Second, Third and Fourth Contingents (Territorial Army).

Second Contingent of 4 Divisions a t 4 months after the outbreak of
war.
T h i r d Contingent of 4 Divisions at 6 months after the outbreak of
war.
F o u r t h Contingent of 4 Divisions at 8 months after the outbreak of
war.
( P a r a g r a p h 68.)
Modernisation of the T e r r i t o r i a l A r m y at a cost of £26,000,000, the
previous suggested allotment of £250,000 a year being retained for improve­
ment of t r a i n i n g and efficiency. ( P a r a g r a p h 69.)
Ammunition reserves for the earlier contingents. ( P a r a g r a p h 70.)
Coast Defence Modernisation at home and abroad. ( P a r a g r a p h 71.)
A i r Defence of Great B r i t a i n to be w i t h i n sight of completion i n five
years. ( P a r a g r a p h s 72 and 73.)
A n increase of 4 i n f a n t r y battalions as an instalment of a possible
eventual increase of 12 (or 14) battalions. ( P a r a g r a p h 74.)
Re-equipment of the Field Artillery by converting the 18-pdr. g u n t o
t a k e a 25-lb. shell (with increase of r a n g e to 12,000 yards), which will replace
both the 18-pounder field gun (range 9,000 yards) and 4.5-inch howitzer
(range 6,500 yards).
A m m u n i t i o n for the above. ( P a r a g r a p h s 75 to 77.)
Improvement in Housing conditions. ( P a r a g r a p h 78.)

Air Force Programme and Requirements.

(15) The A i r Force P r o g r a m m e and Requirements include ( p a r a g r a p h 80):—

(i) Completion of the expansion programme as at present approved so as
to increase our metropolitan first-line air strength to 123 squadrons
(1,512 aircraft) by A p r i l 1937.
(ii) A r m y Co-operation squadrons to accompany the field forces on the
following scale :-—
F i r s t Contingent (regular), 7 squadrons (each of 12 aircraft),
together w i t h one squadron for communication purposes.
Second Contingent (territorial) (after 4 months), 4 or 5 squadrons;
T h i r d Contingent (territorial) (after 6 months), 4 or 5 squadrons;
F o u r t h Contingent (territorial) (after 8 months), to be raised on
mobilisation.
The above involves r a i s i n g 4 new regular bomber squadrons and
4 new auxiliary squadrons, and possibly 2 additional T e r r i t o r i a l
squadrons later.
(iii) A first-line strength of 504 a i r c r a f t for the Fleet A i r A r m and further
shore accommodation a t home and abroad.
(iv) A d d i t i o n a l aircraft a t overseas stations amounting to 13 squadrons and
2 or more Spotter Flights, viz. :—
Singapore.—An e x t r a land-plane squadron and 2 additional
landing grounds.
Penang, Ceylon and Aden.—One land-plane squadron apiece to
co-operate with and assist the Navy.
Hong Kong.—3 squadrons, 1 spotter flight, 1 r e p a i r u n i t a n d an
additional aerodrome.
Middle East.—An addition of 1 General Purpose Squadron.
[12270] ­ G
r ' Malta.—2 squadrons and 1 spotter flight as the ultimate strength,
subject to later consideration as proposed in p a r a g r a p h 29.
West A frica-1 General Purpose Squadron and an aerodrome.
East A frica.-—1 General Purpose Squadron.
West Indies.—1 reconnaissance (flying boat or land-plane)
squadron.
Gibraltar.—An aerodrome to provide an intermediate air base on
an " All British '' air route to Malta and the F a r East.
Certain of the above proposals must be regarded as provisional since
they are dependent on the outcome of the international situation.
( P a r a g r a p h s 80 to 82.)
(v) War Reserves.—In order to bridge the g a p between the outbreak of war
and the time a t which industry can meet wastage—
A war reserve of aircraft (amounting to 150 per cent, of first­
line strength);
Four months' supply, additional to the above, of airframes and
engines for additional flying t r a i n i n g schools to be established on the
outbreak of w a r to m a i n t a i n the supply of pilots;
A reserve of six months' supply of bombs, small a r m ammunition
and pyrotechnics;
For motor t r a n s p o r t — i n i t i a l requirements w i t h reserve of
technical vehicles not readily obtainable from civilian sources.
( P a r a g r a p h s 83 to 86.)
(vi) Storage for reserves and the provision of jigs and tools for manufacture
of aircraft! ( P a r a g r a p h 87.)
(vii) Personnel.—A further entry to the Royal A i r Force Reserve of 600
Pilots a year for the next three years, additional to the 200 a year to
/ ' which the A i r Ministry are now working. ( P a r a g r a p h 88.)

Industrial Production.
(16) The only method by which very large deficiencies in w a r material can
be supplied and an adequate ' ' war potential '' built u p is by the creation of a
" Shadow Armament I n d u s t r y " ( p a r a g r a p h 91), which will demand a h approved
long-term programme of rearmament, continuity of orders, Government: assistance
and greater recourse to non-competitive contracts ( p a r a g r a p h 92). I n this
connection certain problems will arise, n o t a b l y - - ,"
the provision of additional machinery, methods of collaboration w i t h the
industry, provision of labour, the prevention of profiteering and the allocation
of firms to defence departments ( p a r a g r a p h 93),. and the extension of
Government factories (paragraph 94).
(17) The cost of the industrial measures recommended i s . necessarily
conjectural; the suggested figure for the W a r Office is £16,000,000, for the A i r
M i n i s t r y £10,100,000, but these figures are dependent on the success attending the
policy of expanding industry. ( P a r a g r a p h 95.)
(18) The state of preparedness which would be achieved by. the end of
1938-39 if no special measures are instituted for increasing factory, output are
dealt w i t h in p a r a g r a p h s 96-98. The A r m y would be the most adversely affected
since the first contingent of the Field Force would still be short by 50 per cent, of
its present deficiencies and also have no " w a r p o t e n t i a l " b e h i n d . i t . I n the
absence of this " w a r potential," stocks would have to be built up gradually to a
value of £ 1 5 0 - £ 2 0 0 million. ( P a r a g r a p h 97.) For the Royal A i r Force the
enlargement of the sources of production which is necessary to carry out by 1937
the expansion programme already authorised will (it is anticipated) substantially
provide by 1939 the further numbers of aircraft and engines required to build up
war reserves. The £10,100,000 referred to in (17) above is required to enable
sources of production not employed in satisfying A i r Force requirements in peace
to t u r n over to war production without delay in an emergency. ( P a r a g r a p h 98.)
(19) I n the most favourable conditions it will be impossible to carry out the
full programme of supply for the emergency of w a r by the 31st March, 1939.
( P a r a g r a p h 100.)
 Miscellaneous Requirements.

(20) I n Section V I I I of this R e p o r t we have d r a w n attention to develop­

ments Which will require attention i n t h e near future, of which the most i m p o r t a n t
are—
(i) Provision of requirements for A i r R a i d Precautions,- e.g'!, gas masks for
the civilian population a n d other anti-gas equipment. (Paragraphs
102 and 103.)
(ii) Dangers to which our vital industries are liable from a i r attack, a n d
notably the importance of Woolwich, Billingham and A r d e e r in t h i s
connection. ( P a r a g r a p h s 104 and 105.)
(iii) Increased provision for the Secret Service. ( P a r a g r a p h 106.)
(iv) A r m e d merchant cruisers a n d defensively equipped merchant s h i p s .
Certain limitations are a t present imposed by the W a s h i n g t o n N a v a l
Treaty. If these limitations are not repeated in any future T r e a t y
the position will need reconsideration. ( P a r a g r a p h 107.)
(v) The desirability of encouraging commercial air enterprises. ( P a r a ­
g r a p h 108.)
(vi) The importance of m a i n t a i n i n g at the highest state of efficiency t h e
R e g u l a r and A u x i l i a r y forces in the Colonies, M a n d a t e d Territories,
&c. ( P a r a g r a p h 109.)
(vii) The need for d r a w i n g the attention of t h e Dominions to the measures
to be undertaken in this country and for inviting their co-operation.
( P a r a g r a p h 110.)
(viii) The need for remedying deficiencies in I n d i a . ( P a r a g r a p h 111.)

Costs and Finance.

(21) The proposals of this R e p o r t would result in an increased a n n u a l

expenditure over the £124 million (original Estimates) voted for the defence
services in 1935 of the order of :—
£
1936 49,650,000
1937 86,750,000
1938 102,400,000
1939 ... ... 88,450,000
1940 ... 90,050,000
A total of £ 4 1 7 ^ million over t h e five-year period, of which £239 million is in t h e
next 3 years. All figures are, however, necessarily speculative, and are merely a n
attempt to indicate the order of m a g n i t u d e of the expenditure. (Paragraphs
112-114.)
(22) I n addition are the costs for air r a i d s precautions equipment, a p p r o x i ­
mately £ 5 million ( p a r a g r a p h 115), a n increase to million per a n n u m for the
Secret Service ( p a r a g r a p h 116) and a number of o u t s t a n d i n g matters on which
it is not possible to make recommendations or frame costs at the present time
( p a r a g r a p h 117).

General.
(23) W e recommend in general t h a t every possible step should be taken to
bring home to the people of this country a n u n d e r s t a n d i n g of the international
situation and the need for sacrifices, both personal and financial, in order to
provide the defence forces and defences essential to security. I n p a r t i c u l a r we
recommend—
(a) t h a t the importance of defence should be emphasised in our educational
system at least to the same extent as, and as an integral element i n
the p r o p a g a n d a for peace and the League of Nations, t h a t is carried
on to-day in our schools. ( P a r a g r a p h 135.)
(b) t h a t civilian Departments of the Government should render all the
assistance within their power to the Defence Departments, e.g., in t h e
expansion of industry and recruitment for the forces. ( P a r a ­
g r a p h 136.)
 (c) T h a t the attention of the Departments concerned should be d r a w n to the
vital importance to I m p e r i a l Defence of an improved physical
standard in the population. ( P a r a g r a p h 137.)
(24) Our Report is based on a reasonable estimate of w h a t is required to
meet our responsibilities in respect of the security of the E m p i r e , and does not
provide a margin for every conceivable danger, such as an unexpectedly r a p i d
increase in the naval strength of J a p a n or the air strength of Germany; a sudden
attack in time of normal diplomatic relations such as was deemed possible before
the war. (Section X.)
(Signed) M. P . A. H A N K E Y (Chairman).
ERNLE CHATFIELD.
E. L. E L L I N G T O N .
N. F . W A R R E N FISHER.
A. A. MONTGOMERY-MASSINGBERD.
ROBERT VANSITTART.

(Signed) H. R. POWNALL (Secretary).

A. W. CLARKE (Assistant Secretary).

2 Whitehall Gardens, S.W.1,

November 21, 1935.
 TABLE I.—NAVY.

Total
Tota l origin
origin-­ To be spent under present Proposals i n —
Provision
Provisio n Tota l of
Total
ally
all y reeom
reeom-­ made
mad e i n 193
19344 presen
presentt Remarks.
Remarks .
Items..
Items mende
mended d an
andd 1935
1935.. 1939 and Proposals
Proposals..
(C.P.6
(C.P.644 (34))
(34)).. 1936. 193 r
1938.
subsequently.
(2)
(2 ) (3)
(3 ) (4) (5) (6) (") (8)
(8 ) (9
(9))
(1)
(1)
£ £ £ £\I £ . £ £
Modernisatio n of Capita
Modernisation Capitall Ship
Shipss 1,861,000 1,848,000 1,466,500 1,497,500 1,111,400 482,600 4,558,000 Completes 1939'.
Expansio
Expansion n of th
thee Flee
Fleett Ai
Airr Ar
Arm .... 3,711,000*
m .. 399,500* 147,000 790,000 762,000 2,850,000 4,549,000 Completes 1942.
Stocks
Stock s of Materia
Materiall fo
forr Reserv
Reservee 12,173,000f 1,134,200 3,700,200 4,054,500 3,398,700 1,021,700 12,175,100 Completes 1939 except for Mines.
Depots
Depot s fo
forr storag
storagee 3,468,000 361,000 1,004,000 1,693,000 1,011,000 2,067,400 - 5,775,400 Completes 1942.
Other
Othe r Ne
New w Work
Workss (includin
(includingg
Singapore
Singapor e Nava
Navall Base
Base)) 4,435,000 1,281,000 878,500 1,992,000 2,300,500 1,183,200 6,354,200 Completes 1940.

Total
Tota l ..
.... 25,648,000* 5,023,700* 7,196,200 10,027,000 8,583,600 7,604,900 33,411,700

1939=1,457,5001 From 1941 onwards, the annual provision

Increase over provision made in 1934 = £1,6131,500$ 5,514,700 1 8,345,500 6,902,100
1940= 309,500/ required is less than in 1934.

* Includes Aircraft for n e w Cruisers and Capital Ships, included under Naval Construction in figures for 1936 onwards,
f Inclusive of £594,000 for Mines (continuation to 1950). $ Excluding Aircraft for Cruisers and Capital Ships.
TABLE IA*.—Naval Construction.

To be spent undt r present Proposals i n -

Total
Tota l of
Propose
Proposedd Expenditur
Expendituree 1934-3
1934-388 Provisio n i n
Provision presen
presentt Remarks.
Remarks .
( C P . 6 4 (34))
(34)).. 1934
193 4 an
andd 1935
1935.. Proposals.
Proposals .
1936. 1937. 1938. 1939-42.

(1)
(1 ) (2
(2)) (3) (4) (5) (6) (7)
(7) (8
(8))

£ £ . £ £ £ £ £"
66,979,000f 22,845,000f 19,325,000 31,042,50 0 32,872,500 141,885,000 225,125,000 Th e su
The summ i n colum
column n (6
(6)) include
includess
. i
£25,095,0000 carr
£25,095,00 carryy ove
overr t o 194
19433
Excess of proposed expenditure over provision in 1934 17,742,500 and
an d subsequen
subsequentt year
yearss t o com
com--­
(including Aircraft for Cruisers and Capital Ships) - 7,870,000 19,587,50 0 21,417,500 (average plet
pletee programme
programmess (u (upp t o an
andd
£11,455,000 1939-42) includingg 1942
includin 1942)) b y 1946
1946..

Excess of proposed expenditure over the average cost 12,697,500

of replacement in futurer;r£16,500,000:j: 2,825,000 14,542,500 16,372,500 (average
1939-42)
f Exclusive of Aircraft. % Based on 15 Capital Ships and 70 Cruisers.
NOTE.—Net cash provision in 1935 was subject to an abatement (allowed for above) of £540,000 received from Australia in respect of H.M.A.S. Sydney. Similar
deductions have been made from the expenditure shown for the three succeeding years of £540,000, £360,000 and £200,000 respectively.

TABLE IB.—Net Increase over 1 9 3 5 Provision in Annual Recurrent Charges arising from the
present Proposals shown in ( Columns 4 to 7 of Tables I A and I A * .
(a) At March 31, (6) At March 31,
Items.
1939. 1941.

Service personnel (including pay and £ £

maintenance) 2,155,000 3,446,000
Other I t e m s ... 2,545,000 4,154,000

Totals 4,700,000 7,600,000

NOTE.—The annual recurrent charges will continue to rise after the 31st March, 1941, allow­
ance having to be made, inter alia, for ultimate increases in non-effective charges and for the
replacement of obsolescent material.
T A B L E IC.—Rough Forecast of net Totals of Annual Navy Estimates for the
next Five Years if present Proposals are approved.
1936. 1937. 1938. 1939. 1940.

£ £ £ £ £
74,900,000 89,000,000 90,650,000 90,700,000 88,300,000

NOTE.—It must be emphasised that the forecast is necessarily speculative, and. is an

attempt to indicate the order of magnitude of the expenditure involved rather than an estimate
of the money Parliament m a y be asked to Vote. No allowance has been made for possible
variations in rates and prices.
 TABLE II-ARMY.

(The figures should be regarded as provisional only. T h e y do n o t allow for acceleration of t h e r a t e of mobilisation, vide p a r a g r a p h 67.)

TABLE HA.—Capital Expenditure.

To be spent under present Proposals in—

Total Total of Already Total
Tota l of
Items. originally existing provided present
presen t Remarks.
recommended authorised in 1934 Remaining Proposals.
Proposals .
(CP. 64(34)). Provision. and 1935. 1936. 1937. 1938. 1939. 1940. to
complete.
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
£ £ £ £ £ ; £ £ £ £ £
(a) Field F o r c e -
(i) Material and Works ... 14,820,000(') 5,312,000 2,086,000 2,863,000 5,813,000 9,613,000 5.535,000 23,824,000 O Excludes £2,860,000 for ammunition for
(ii) Ammunition Reserves ... 10,860,000( )2
4,800,000 743,000 1,565,000 2,085,000 3,130,000 9^380,000 15,500,000 4,373,000 36,033,000 first 3 months, now transferred to (a) (ii).
(iii) Industrial Mobilisation O Includes £2,860,000, transferred from
(including removal of (a)(i).
certain factories from
Woolwich and Wal­
tham) (Army share
only) 3,500,000 5,100,000 8,765,000 ... 17,365,000
(b) Territorial Army ... 520,000 520,000 1,040,000 5,200,000 11,440,000 7,362,000 26,082,000

(c) Defended Ports 10,719.0000 4,977,000 2,401,000 1,456,000 1,609,000 1,177,000 525,000 525,000 5,258,000 10,550,000 ( ) Excludes £796,000 for A.A. Defence of
3

Home Ports, transferred to (d) (i).

(d) A.D.G.B.­
(i) General charges 2,526,000 0 2,027,000 522,000 490,000 690,000 800,000 1,600,000 2,000,000 2,564,000 8,144,000 O Includes £796,000, transferred from (c).
(ii) Reserve Ammunition ... 500,000 400,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 500,000 5,500,000

(e) Rebuilding of Barracks and

Provision of New Barracks 400,000 800,000 1,100,000 1,100,000 1,100,000 5,500,000 10,000,000

(/) Barracks for additional

Infantry Battalions 50,000 150,000 150,000 350,000

(g) Re-equipment of Field

Artillery ... 100,000 780,000 970,000 2,630,000 3,747,000 703,000 8,930,000
39,425,000 17,516,000 . 5,752,000 11,944,000 18,547,000 27,745,000 26,970,000 35,312,000 26,260,000 146,778,000

T A B L E I I B . — N e t Increase over 1935 Provision in Annual Recurrent Charges

arising from the Proposals shown in Columns 5 to 9 of Table HA.

At March 31, At March 31,

Items.
1939. 1941.*

£ £
1. Personnel (military and civilian)—effective
charges
2,470,000 3,487,000
2. Other recurrent charges, e.g., for maintenance
of buildings, vehicles, &c.
510,000 1,083,000
Total 2,980,000 4,570,000

* Recurrent charges after the 31st March, 1941, must continue to rise still further to allow
for capital expenditure in column 10, and also for non-effective charges and for the replacement
of obsolescent material.

TABLE l i e . — R o u g h Forecast of net Totals of Army Estimates for the next

Five Years if present Proposals are approved.

1936. 1937. 1938. 1939. 1940;

£ £ £ £ : :
£
54,000,000 62,000,000 72,000,000 72,000,000 82,000,000
 TABLE III.—AIR FORCE

Cost of Schemes already authorised. To be spent under present Proposals in—

Total origin­ Financial
Totall of
Tota
ally re com­ Already Remaining Year in which
Items. mended 1939 and present
presen t
provided in to be Total. 1936. 1937. 1938. I t e m s will be
(C.P.64(34)). subsequently. Proposals
Proposals..
Estimates. provided. completed.

(1) (2) (3) (4) (5) (6) (?) (8) (9) (10) (11)

£ £ £ £ £ £ £ £
H o m e Forces 800,000 8,000,000 32,000,000 (a)40,000,000 100,000 500,000 900,000 500,000 2,000,000 1940

Fleet Air Arm 3,000,000 150,000 1,100,000 (6) 1,250,000 250,000 400,000 600,000 750,000 2,000,000 1941

Overseas Forces 3,790,000 750,000 2,000,000 (c) 2,750,000 400,000 1,600,000 2,000,000 2,000,000 6,000,000 1941

War Reserves 4,625,000 200,000 1,000,000 1,200,000 *6,000,000 *16,000,000 *2S,000,000 *16,000,000 (d) 63,000,000 1940

Totals 12,215,000 9,100,000 36,100,000. 45,200,000 6,750,000 18,500,000 28,500,000 19,250,000 73,000,000

NOTE.—(a) Estimated capital cost of increasing Home Defence Force to 123 squadrons.
(b) Additional Works Services at home and abroad for Fleet Air Arm.
(c) Equipment and Works Services for new squadrons for Singapore and Hong Kong. Items for Singapore provisionally estimated in 1934 to cost £900,000
now estimated to cost £1,734,000.
(cl) The provision for War Reserves includes the following sums in respect of such Reserves for the Fleet Air Arm, viz.: 1936: £500,000; 1937: £1,700,000"
1938: £1,700,000; 1939-40: £2,900,000. Total: £6,800,000.
* These figures show the provision which would be necessary if the exigencies of the international situation require that the bulk of the provision for
essential War Reserves should be completed by the 31st March, 1939. A very steep decline in output would ensue after that date which would necessarily have
serious reactions, e.g., a wholesale discharge of labour would be inevitable. If, therefore, the international situation permits it would be desirable to effect
a more gradual spread of this expenditure, and carry forward a larger proportion beyond 1938-39.

TABLE I I I B . — N e t Increase over 1935 Provision in Annual Recurrent Charges

arising from present Proposals, the Capital Cost of which is set out in
Columns 6 to 9 of Table I I I A above.

(a) At March 31, (6) At March 31,

Items.
Items . .
1939. 1941.

£ £
Personnel 1,450,000 1,650,000

Equipment ... 1,800,000 2,100,000

Other charges 250,000 400,000

Total ... . ... 3,500,000 4,150,000

NOTE.—Recurrent charges after the 31st March, 1941, will continue to rise in order to provide
for ultimate increase in non-effective charges for replacement of obsolescent material. It is
expected that in the financial year 1941 a s u m of about £5,000,000 will be required to replace
obsolete or deteriorated war reserves and a similar amount in each subsequent year.

TABLE IIIC.—Rough Forecast of net Estimates for next Wive Years if present
Proposals are approved.

1936. 1937. 1938. 1939. 1940.

£ £ £ - £ £
45,000,000 60,000,000 64,000,000 50,000,000 44,000,000

NOTE.—It must be emphasised that this forecast (which excludes the probable increase in
Civil Aviation Expenditure) is to a great extent speculative, and is an attempt to indicate the
order of magnitude of anticipated expenditure rather than to give a trustworthy estimate of the
money Parliament m a y be asked to Vote. I n this connection, particular attention is called to
the note against * above. No attempt has been made to forecast probable variations in rates
or prices.
 Provision
Provisio n mad
madee To be spent under present Proposals i n —
Total
Tota l originall
originallyy
i n 193
19344 an
andd 1935
1935,, Total
Tota l o f presen
presentt
Service
Service.. recommended
recommende d
combined,
combined , Proposals.
Proposals .
( C P . 6 4 (34))
(34)).. 1940 and
towards
toward s col
col.. (2)
(2).. 1936. 1937. 1938. 1939.
subsequently.
(1)
(1 ) (2)
(2 ) (3)
(3 ) (4) (5) (6) (?) (8) (9))
(9

£ £ £ £ £ e.:
£
Navy
Nav y [Excludin
[Excludingg Nava
Navall Con
Con-­
struction
struction]] 25,648,000* 5,023,700 7,196,200 10,027,000 8,583,600 7,60 1,900 33,411,700
Arm
Armyy ..
.... ..
.... 39,425,000 5,752,000 11,944,000 18,547,000 27,745,000 26,970,000 61,572,000 146,778,000
Ai
Airr Forc
Forcee ..
.... ..
.... 12,215,000 9,100,000 6,750,000 18,500,000 28,500,000 19,25 3,000 73,000,000

Tota
Totall 77,288,000 19,875,700 25,890,200 47,074,000 64,828,600 253,189,700
(Not including Naval
Construction in
Table I V A * . )

TABLE IVA*.—Naval Construction.

To be spent under present Proposals i n -

Provision
Provisio n i n 193
19344
and
an d 1935
1935.. 1939-42 and for completion in
1936. 1937. 1938.
subsequent years (see Table I A * ) .

£ £ £ £ £
Naval Construction .... ... 22,845,000 19,325,00 0 31,042,500 32,872,500 141,885,000

TABLE IVB.—Net Increases over 1 9 8 5 Provisions in Annual Recurrent Charges arising from present Proposals set out in Columns 4 to 8 in
Table I V A and in Table I V A * .

Service. (a) At March 31, 1939. (6) At March 31, 1941.

£ £
Navy ... ... ... ... 4,700,000 7,600,000
Army ... 2,980,000 4,570,000
Air Force ... ... ... 3,500,000 4,150,000

Total 11,180,000 16,320,000

TABLE I V c . — R o u g h Forecast of net Estimates for next Five Years if present Proposals are approved.

1934.
1935. 1940.
[Original and supple- Service. 1936. 1937. 1938. 1939.
mentary Estimates.] [Original Estimates.]

£ £ £ £ £ £ £
56,700,000 60,050,000 Navy 74,900,000 89,000,000 90,650,000 90,700,000 88,300,000
39,850,000 43,550,000 Army 54,000,000 62,000,000 72,000,000 72,000,000- 82,000,000
17,761,000 20,650,000 Air Force ... 45,000,000 60,000,000 64,000,000 50,000,000 44,000,000

114,311,000 124,250,000 Total... 173,900,000 211,000,000 226,650,000 212,700,000 214,300,000

NOTE.—The Notes appended to the detailed Tables in Tables I , I I and I I I apply equally to this summary, particularly the emphasis laid on the speculative
nature of Table TVc above.

:-/-.! .1.1
 Provision made To be spent under present Proposals in-
Total originally Total of present
in 1934 and 1935,
Service. recommended
combined, Proposals.
( C P . 64 ( 3 4 ) ) . 1940 and
towards col. (2). 1936. 1937. 1938. 1939.
subsequently.

(1) (2) (3) (4) (5) (6) (?) (8) (9)

£ £ £ £ £ £
Navy [Excluding Naval Con­
struction] 25,648,000* 5,023,700 7,196,200 10,027,000 8,583,600 7,604,900 33,411,700
Army 39,425,000 5,752,000 11,944,000 18,547,000 27,745,000 26,970,000 I 61,572,000 146,778,000
12,215,000 9,100,000 6,750,000 18,500,000 28,500,000 19,250,000 73,000,000
Air Force ...
77,288,000 19,875,700 25,890,200 47,074,000 64,828,600 253,189,700
Total (Not including Naval
Construction in
Table I V A * . )

TABLE IVA*.—Naval Construction.

To be spent under present Px*oposals i n -

Provisio
Provisionn i n 1934
193 4
an
andd 1935.
1935 .
1939-42 and for completion in
1936. 1937. 1938.
subsequent years (see Table I A * ) .

£ £ ' '!
;
£ £ £
Naval Construction .... ... ... 22,845,000 19,325,000 31,042,500 32,872,500 141,885,000

T A B L E I V B . — N e t Increases over 1 9 8 5 Provisions in Annual Recurrent Charges arising from present Proposals set out in Columns 4 to 8 in
Table I V A and in Table I V A*.

Service. (a) At March 31, 1939. (6) At March 31, 1941.

£ £
Navy 4,700,000 7,600,000
Army ... 2,980,000 4,570,000
Air Force 3,500,000 4,150,000

Total 11,180,000 16,320,000

TABLE I V C . — R o u g h Forecast of net Estimates for next Five Years if present Proposals are approved.

1934.
1935.
[Original and supple- Service. 1936. 1937. 1938. 1939. 1940.
[Original E s t i m a t e s . ]
mentary Estimates.]

£ £ &
1 £ £ £ £
56,700,000 60,050,000 Navy 74,900,000 89,000,000 90,650,000 90,700,000 88,300,000
39,850,000 43,550,000 Army 54,000,000 62,000,000 72,000,000 72,000,000- 82,000,000
17,761,000 20,650,000 Air Force ... 45,000,000 60,000,000 64,000,000 50,000,000 44,000,000

114,311,000 124,250,000 Total... 173,900,000 211,000,000 226,650,000 212,700,000 214,300,000

NOTE.—The Notes appended to the detailed Tables in Tables I, I I and I I I apply equally to this summary, particularly the emphasis laid on the speculative
nature of Table I V c above.
 3 l r-D
4

D.R.C. 2 5 .
(4 foe P a ^ r -Afo. D.P.R. 12.)

ANNEX.

PROGRAMMES OF THE D E F E N C E SERVICES.

Interim Report.
ON the 8th July, 1935, the Ministerial Sub-Committee of the Committee
of Imperial Defence on Defence Policy and Requirements invited the Defence
Requirements Committee to re-examine, in the light of the situation set forth in
P a p e r No. D.P.R. 6,* and with special reference to financial co-ordination, t h e
programmes of the Navy, A r m y and A i r Force, a n d to make recommendations
for the future.
2. W e have held two meetings and have made a preliminary survey of the
programme of defence requirements in the light of the present a n d prospective
international situation. As a result we have decided t o submit a n interim Report
asking for confirmation of our own views a n d seeking further guidance before
proceeding to work out in detail fresh programmes of defence requirements.
3. Our p r e l i m i n a r y survey has already revealed a number of additional
requirements, some of which were foreseen in our original R e p o r t as liable to
arise, while others have matured as the result of fresh developments. They include
the following :—,
(i) Naval increases, such as the additional sum for the modernisation of
4 capital ships which was reported to the Ministerial Committee last
J u l y a n d increased equipments for the A / A a r m a m e n t of the fleet.
I n addition, Germany's decision to re-build her fleet by the end of
1942 (limited though her fleet fortunately now is to 35 per cent, of
our own) necessitates a more r a p i d replacement of our old ships.
This is most marked in the case of the capital ship category in
which, by the end of 1942, Germany may possess 5 new ships whereas
as the result of the postponement of replacement under the London
Naval T r e a t y 11 of our 15 existing capital ships would be 26 years
or more old at t h a t time. Lack of m a n u f a c t u r i n g facilities enhances
the importance of an early decision. F o r example, a t present there
are in the whole country only four gun pits for the erection of the
largest gun mountings.
(ii) The A r m y programme, which was cut down by half by the late
Ministerial Committee on Defence Requirements, reveals very heavy
deficiencies. W i t h o u t additional expenditure the Field Force will not
be able to fulfil its responsibilities for many years, a n d this is even
more t r u e of the Territorial Army, for which a less t h a n meagre
pittance has been provided. A s an example, the requirements of the
Field Force in material (apart from ammunition) were estimated, in
the original Report of the Defence Requirements Committee, a t
£14,820,000. A t the present approved r a t e of provision, on the
1st A p r i l , 1939, over £ 9 ^ millions will still be outstanding.
The reconstruction of the German Navy necessitates some
speeding u p of the programme for renovating coast defences a t home,
which has been cut down to annual instalments so small as actually
to involve 100 years for the completion of the modest approved
scheme.
The serious and concrete t h r e a t to Anglo-Italian relations t h a t has
developed owing to the dispute between I t a l y and Abyssinia, reveals
the risk of delaying too long the reconditioning of the coast and a i r
defences of Mediterranean ports. The I t a l i a n s have for long been
outspokenly aware of these weaknesses.
Certain additional defences may be required for Hong Kong and
Singapore beyond those for which provision was recommended in the
previous Report.
* Also Paper No. D.R.C. 22.
 (iii) The plans for the extension of the A i r Defence of Great B r i t a i n , which
are now before the Sub-Committee on Defence Policy and Require­
ments, involve a further heavy expenditure, whatever m a y be the
decision as to the year of completion to be aimed at.
(iv) The provision of adequate reserves for the Royal A i r Force is an
essential defence requirement. W i t h o u t reserves of bombs and
machines the Royal A i r Force would remain effective as a fighting
force only for a few weeks in the event of hostilities. Sooner or later
the lack of reserves will become known to Germany, and probably
more widely, a n d the deterrent effect of the recent increases to the
Royal A i r Force will be discounted,
(v) Considerable expenditure On machine tools, jigs, gauges and so forth
will be required in the near future if i n d u s t r i a l mobilisation is to be
a reality. The position in respect of shells and air bombs is
particularly disquieting.
The completion of the above deficiencies will require large sums over and above
those included in our original report.
4. The international situation affords no comfort. I t has deteriorated even
since the 7th J u n e , when the R e p o r t referred to in our Terms of Reference
(D.P.R. 6) was completed. The situation in the F a r E a s t remains superficially
unchanged, and the attitude of J a p a n has not become any more reassuring.
There have, indeed, been recent signs t h a t the military hotheads are in
undiminished power and capable as ever of forcing the h a n d of a not unwilling
civil government. J a p a n e s e naval and m i l i t a r y preparations are well advanced,
and for this reason 1936 and subsequent years, when our own p r e p a r a t i o n s will
still be backward, are particularly dangerous years. Moreover, there is increasing
evidence of a rapprochement between J a p a n and Germany. I t is probable, in
fact, t h a t this will become more open in the n e a r future.
5. I n Europe the international situation provides no ground for optimism.
Since our original Report was presented in February 1934 the evidence of
German rearmament in the air has compelled the Government to adopt plans
for the expansion of the Royal A i r Force greatly exceeding our own recommen­
dations. The recent naval conversations, though satisfactory in so far as they
have curtailed the strength of the German Navy to 35 per cent, of our own, have
confirmed the impression of Germany's intention to r e a r m almost regardless of
cost. I n this connection the Treasury have received information confirming, and
indeed tending to increase, the estimate given in D.C.M. (32) 145, p a r a g r a p h 13,*
of £1,000 million a year as the r a t e of German borrowing, mainly, of course, for
expenditure on armaments.
6. Meanwhile, the dispute between Italy and Abyssinia threatens to weaken
the u n i t y of the nations t h a t can hold German ambitions in check. I t is to be
apprehended also that, as German strength increases, there will be a tendency
for her to a t t r a c t satellite nations into her orbit and away from the other Powers.
Examples of this tendency are already to be found in the case of P o l a n d and, to
a lesser extent, Yugoslavia,.
7. I n d r a w i n g u p a programme we have to consider not only our own
deficiencies, but also the date by which they ought to be made good—a matter
t h a t is now before the Sub-Committee on Defence Policy and Requirements. On
this subject we should like to offer the following observations, in the hope t h a t
they may assist the Sub-Committee in reaching a conclusion before the
P a r l i a m e n t a r y recess.
8. The date has to be determined" by two principal considerations :—
(i) T h e date a t which G e r m a n y - t h e ' ' firebrand '' of Europe—will have
completed her preparations to the point a t which she would be able
to launch an aggression,
(ii) The international factor.
9. So far as the German Navy is concerned, the Chief of the Naval Staff
thinks that, in view of the technical difficulties involved in naval construction on
a large scale over a period of years, the statements made during the recent Anglo­
* Attached to Paper No. D.P.R. 6.
German Conversations t h a t Germany aimed at her new fleet being ready by the
end of 1942 can be accepted; in any case, it would be difficult for the German
Navy to be completed and t r a i n e d to a w a r standard before 1942. '
10. The Chief of the I m p e r i a l General Staff has furnished us with figures,
obtained from reliable sources, which indicate t h a t by the year 1939 the numerical
strength of the German A r m y on a war footing will nearly approach t h a t of the
French Army. By the year 1942 the Germans will possess a marked numerical
superiority. The rate of expansion is believed to depend largely on the r a t e at
which w a r material can be provided. The Chief of the I m p e r i a l General Staff
will communicate the figures on which this statement is based, which are very
secret, to the Sub-Committee on Defence Policy and Requirements.
11. A s far as A i r Forces are concerned, both H i t l e r and Goering have
recently made statements to the effect t h a t they hoped to a t t a i n p a r i t y with France
in the air, at a figure of approximately 2,000 first line aircraft, by the end of this
year. Whilst it is not considered t h a t this is within the bounds of possibility if
first line strength, as we use the term in this country, is to be taken as the basis,
yet there is no reason why Germany should not build u p a first line strength of
1,500 aircraft by A p r i l 1937, organised in Squadrons, w i t h pilots who have
completed their individual t r a i n i n g , and backed by an industry organised for w a r
production on a big scale. This achievement in so short a time would only be
possible in a country dragooned under a Nazi system. If an agreement for
limitation of A i r Forces cannot be reached at a figure of 1,500 first-line strength,
Germany will undoubtedly continue to expand u p to 2,000 first-line strength, and
there is no reason why she should not do this by the end of 1938. Although a
strength of 1,500 in 1937 or 2,000 in 1938 may be reached, it is unlikely t h a t the
Squadrons will be fully t r a i n e d as such, or that the German A i r Force as a whole
will be provided w i t h fully t r a i n e d and experienced subordinate Commanders.
W e can assume that, whatever the strength of the German A i r Force, France
will accept nothing less t h a n numerical parity, so that, against any combination
of Powers, Germany will be in a position of numerical inferiority in the air.
Against this, however, we must offset the fact that in technical excellency, in
t r a i n i n g and in i n d u s t r i a l organisation France will tend to lag behind the all­
round efficiency of Nazi Germany and, further, as far as we ourselves are
concerned, we must offset the fact t h a t the comparative vulnerability to air attack
of this country and of Germanjr operates, and must always operate, greatly in
favour of the latter.
12. F r o m t h e technical m i l i t a r y point of view, therefore (using the term in
its widest significance), i t would seem improbable t h a t the German forces as a
whole could reach t h a t state of completion, readiness, t r a i n i n g and experience,
which would logically justify t h e i r leaders (especially after the experience of
1914-18) in deliberately launching an aggression before 1942.
13. I t must be remembered, however, t h a t Germany is living under an
autocracy; that, apparently, she has control of unlimited funds to spend on her
defence forces; and t h a t i n d u s t r y can be diverted to the production of w a r
material to any extent desired. I n these circumstances Germany can do things
that are impossible for us, working under peace conditions. W e must be on our
guard, therefore, against under-estimating German capacity.
Germany, as the potential aggressor, can select her own date for the war,
and so lay out the development of her t r a i n i n g and production of material t h a t
it reaches its peak at the moment chosen by themselves. This gives Germany all
the advantages of the possessor of the initiative where the p r e p a r a t i o n for w a r
is concerned.
14. Readiness, moreover, is a relative term. If t h e nations t h a t act as a
deterrent to Germany, and particularly the United Kingdom, remain in their
present state of unpreparedness, Germany might easily decide to take advantage
of some opportunity or pretext to embark on some political adventure, perhaps
against some minor objective such as Memel, perhaps on a more ambitious scale
in Eastern or Central Europe. The position m Europe is a t present so obscure
that it is impossible to say t h a t no such opportunity can arise, or t h a t psycho­
logical possibilities of this kind can be ignored. The P e r m a n e n t Under-Secretary
of State for Foreign Affairs considers i t impossible to guarantee the political
peace of E u r o p e u n t i l 1942. Germany is not likely to go to w a r by calculation
before 1942, but she might do so by miscalculation or political error of judgment.
H e distinguishes between a likely date (e.g., one governed by military considera­
tions) and a date beyond which the maintenance of peace could not be assumed.
H e regards the 1st J a n u a r y , 1939, as the latest date which could reasonably be
assumed for the purpose of our own security, and i t could not be guaranteed t h a t
Germany would remain politically quiescent u n t i l then; to accept any date beyond
1939 would be to r u n a big risk.

First Recommendation.
15. On a review of these considerations, and t a k i n g into account the
unsatisfactory state of our industry for r a p i d production of armaments, we agree
t h a t it is not safe to postpone the date at which we should aim at a reasonable
state of preparedness beyond J a n u a r y 1939—which only gives us three budget
years.
16. The present dangerous position of our defence forces a n d defences
results from the juxtaposition of r e a r m a m e n t by Germany a t an unprecedented
r a t e w i t h low-water m a r k in our own armaments resulting from the policy of
successive Governments since the war. W h e t h e r the year a t which we aim is
1939, as suggested above, or 1942, we do not believe it is possible to achieve a state
of preparedness which would constitute an effective deterrent or defence within
the limits of increases of expenditure in the annual estimates of the Defence
Services. W e see no prospect of being able to submit acceptable or realisable
programmes on t h a t basis. W e know t h a t Germany is financing her p r e p a r a t i o n s
by loans on an immense scale, and t h a t the same is being done in varying degrees
by other countries. If then this country is to equip itself adequately for its own
security and to discourage aggression, we can see no alternative but for the
Government to widen its horizon a n d to resort to some system of capital
expenditure for this purpose.

Second Recommendation.
17. I n spite of the urgency of the question we feel it would h a r d l y be
reasonable on our p a r t to ask for a decision on this large question of Government
policy before the recess. For the moment, therefore, all we request is authority
to work out the programmes entrusted to us on the basis t h a t they are to be
completed as early as possible—financial considerations to be of secondary
importance to the earliest possible security—and t h a t by the end of the financial
year 1938-39 each Service shall have advanced its readiness to the greatest extent
t h a t physical conditions permit w i t h normal peace time practice, or by such other
date as the Cabinet or the Sub-Committee on Defence Policy a n d Requirements
may decide, leaving for later consideration by the Government the question of bow
the finance is to be met. If we are authorised to proceed on this basis we will do
our best to produce programmes to meet the national need, but we must enter a
caveat that, the present state of our m a n u f a c t u r i n g resources will very definitely
limit w h a t it is possible to do in the time available.

(Signed) M. P . A. H A N K E Y (Chairman).
ERNLE CHATFIELD.
E. L. E L L I N G T O N .
N. F. W A R R E N F I S H E R .
A. A. M O N T G O M E R Y - M A S S I N G B E R D .
ROBERT VANSITTART.
(Signed) H. R. POWNALL (Secretary).
A. W . CLARKE (Assistant Secretary).
2 Whitehall Gardens, S.W.1,
July 24, 1935.
 THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTVS GOVERNMENT

Printed for the Committee of Imperial Defence. November 1935

144

MOST SECRET Copy No.

I t is requested t h a t special care may be taken to

TO Bensure
E K E Pthe
T secrecy
U N D E Rof Lthis
O C Kdocument.
AND KEY.

COMMITTEE OF IMPERIAL DEFENCE

DEFENCE REQUIREMENTS SUB-COMMITTEE

VOLUME II

SCHEDULES TO T H I R D REPORT

SCHEDULE 1.—Naval Defence R e q u i r e m e n t s . (Pages 1-22)

( M e m o r a n d u m by t h e F i r s t Sea L o r d and Chief of Naval
Staff)
SCHEDULE 2.—Army Defence R e q u i r e m e n t s . (Pages 23-38)
(Note by t h e Chief of t h e Imperial General Staff)
SCHEDULE 3.—Royal Air Force Defence R e q u i r e m e n t s . (Pages 39-52)
( M e m o r a n d u m by t h e Chief of t h e Air Staff)
SCHEDULE 4.—Army Defence R e q u i r e m e n t s . (Pages 53-55)
(Note by t h e Master-General of t h e Ordnance)
SCHEDULE 5.—Air Raid P r e c a u t i o n s R e q u i r e m e n t s . . (Pages 57-60)
( M e m o r a n d u m prepared by t h e Air Raid P r e c a u t i o n s
D e p a r t m e n t , H o m e Office)

2 Whitehall Gardens, S.W. 1,

November 21, 1935

12270-1
 S C H E D U L E I TO D.R.O. 37.

Naval Defence Requirements.

Memorandum by the First Sea Lord and Chief of Naval Staff.

1. T H E Sub-Committee on Defence Policy and Requirements a t their

meeting* on the 29th July, 1935, agreed—
" To authorise the Defence Requirements Sub-Committee to work out^
for their consideration, programmes on the assumption t h a t by the end of
the financial year 1938-39, each service should have advanced its state of
readiness to the widest necessary extent in relation to the m i l i t a r y needs
of National defence a n d w i t h i n the limits of practicability."

The memorandum which follows deals w i t h the Defence Requirements of

the Navy. W h i l e the making good of w h a t h a s been known as " deficiencies,"
Table B of D.R.C. 14, can be largely compressed into the three programme years
before the end of the year 1938-39, the broader requirements of the Navy, such
as new construction a n d personnel increases, can only be viewed in their proper
perspective if considered over a further period of years a n d programmes have in
consequence generally been carried on to the year 1942.

Strategical Considerations.

2. I n the d r a f t R e p o r t of the 1935 Naval Conference Ministerial Committee

(N.C.M. (35) 12), which was circulated to the D.C.(M). Committee as
D.C.(M) (32) 121, the following A d m i r a l t y statement of our m i n i m u m naval
strategical requirement for security was accepted as the basis of our calculations
of Naval strength :—
' ' W e should be able to send to the F a r E a s t a Fleet sufficient to provide
' cover ' against the J a p a n e s e Fleet; we should have sufficient a d d i t i o n a l
forces behind this shield for the protection of our territory and mercantile
marine against J a p a n e s e a t t a c k ; a t the same time we should be able to retain
in European waters a force sufficient to act as a deterrent a n d to prevent the
strongest European Naval Power from obtaining control of our vital home
terminal areas while we can make the necessary redispositions."

3. Since the date ( J u n e 1934) when this memorandum was p r e p a r e d three

major events have taken place, which affect our Naval strategical requirements.

4. Firstly, as a result of the resumption by Germany of the r i g h t to build

up a new Navy free of the restrictions of the Treaty of Versailles, the Navy
of t h a t country (though fortunately now limited by agreement to 35 per cent,
of our own strength) has to be taken into account.

5. Secondly, events have shown t h a t our membership of the League of

Nations may lead us at little notice into a situation where w a r is within, sight
and that a period of deterioration of relations with a possible adversary, d u r i n g
which our lack of w a r p r e p a r a t i o n s could be made good, can no longer be
depended on.
* D.P.R. 4th Meeting, Minute 2.
[12270-1] B
 6. Thirdly, by the prominent p a r t which our position in the Mediterranean
has compelled us to take in connection with the Italo-Abyssinian dispute, we
have incurred the hostility of Italy, which feeling may well last for a generation.
A s a result, i t is no longer possible to depend on our old friendship w i t h Italy,
a n d should we be engaged in war in the F a r E a s t it is essential t h a t we should
be able to m a i n t a i n our line of communications and uphold our general position
in the Mediterranean in the face of a possibly hostile Italy.

7. A s a result of the changed circumstances mentioned above, i t is

necessary that, if we had to send a Fleet to the East, we should be able to retain
in European waters a considerably more powerful Naval Force t h a n was thought
necessary before these circumstances arose.

8. Again, the present emergency has brought into clear relief the inadequacy
of our Naval forces in many respects, especially w i t h reference to cruisers and
destroyers. For a possible war w i t h Italy, w h i c h . should, owing to her
geographical position, be a simpler problem than a w a r with any other great
power, it has been essential to bring home cruisers, destroyers and submarines
from the various stations abroad, including even China, where in the face of
J a p a n e s e strength we can ill afford any display of weakness.

9. I n spite of the important factors mentioned, the proposals in this paper

do not ask for an expansion of the Royal Navy at the present time to meet these
n e w strategical needs, and they are based on the maintenance of approximately
t h e same number of ships as is aimed at a t present, i.e.—
15 Capital ships.
70 Cruisers (of which 10 can be over-age).
16 Flotillas of destroyers (of which 4 can be over-age).
I t is possible t h a t the action of other Powers or changes in the international
situation will make it necessary when we have replaced the existing aged fleet to
consider an increase in the strength of the Fleet. I n the case of battleships, since
the building programme p u t forward for the next three years is the maximum
t h a t we can build, any numerical increase in our battlefleet cannot in any case
t a k e place till 1940, and then only by the keeping of old ships instead of scrapping
them. This question of possibly having to increase the strength of the Royal
N a v y is a matter of first-class importance to which I consider the Committee
should d r a w attention. ' :

Revised Requirements of Naval Defence.

10. The revised requirements of Naval defence which follow in this

memorandum result generally from the various considerations mentioned above.
The main items of these requirements are as follows :—

(a) Naval Construction (Appendix No. 1).

The estimated cost of the new construction required to enable the Fleet to
fulfil its duties is given in A p p e n d i x No. 1.
This programme shows a considerably increased rate of financial expenditure
over t h a t given in A p p e n d i x 1 to D.R.C. P a p e r No. 14, and the reasons for the
main increases are explained in detail in the notes on A p p e n d i x No. 1.
I n this connection, attention is again directed to the connection between new
construction a n d modernisation of old ships. Owing to the more r a p i d replace­
ment of capital ships now required to meet the building of other Powers, i t is
possible to make an actual reduction in the number of ships to be modernised.

:-(b) Navy Deficiency Programme (Appendix No. 2).

This programme is contained in A p p e n d i x No. 2. I t is, in general, arranged
in the same manner as the Navy Deficiency P r o g r a m m e contained in Table B of
D.R.C. 14, and deals with t h e same matters, e.g., modernisation of capital ships,
anti-submarine equipment, reserves of ammunition, stores, & c , except that
X X . A.
personnel and Fleet A i r A r m are now excluded (see Items (c) and; (d) below), and
a new item for various works (Item 17) has been added. For convenience of
reference, however, the same numbers have been retained for the various other
items as were used in D.R.C. 14.
The figures in general show an increase over those contained in D.R.C. 14.
Details of changes from t h e previous figures, and the reasons for such changes, a r e
contained in t h e notes on A p p e n d i x No. 2.
In accordance with the decision of the Defence Policy and Requirements
Committee t h a t " b y the end of the year 1938-39 each of the defence services
should have advanced its state of readiness to t h e widest necessary extent in
relation to the military needs of national defence and w i t h i n the limits of
practicability " the provision for making good the above deficiency has so far as
practicable been inserted under the programme years 1936, 1937, 1938. There
remains, however, a certain balance which it would not be possible to spend i n
these years.

(c) Personnel (Appendix No. 3).

The figures for personnel are given in A p p e n d i x No. 3. They provide in
general for an expansion of strength of some 35,600, spread over the years 1936­
1942. This number of men will enable the present deficiency to be met as well as
the increase necessary in connection with the remaining proposals in this paper,
and when it is completed in 1942 the total personnel of the Navy will be 130,000, as
compared w i t h the present totals for the U . S A . of 122,000 and for J a p a n
of 114,245.
I n order to enable this increase of personnel to be made, it is essential t h a t the
provision of t h e t h i r d Roys' t r a i n i n g establishment, provided for in I t e m 17 of
Appendix No. 2, shall be authorised as soon as possible.
Attention is particularly called to this point.
N.B.—-Personnel figures of J a p a n can N O T be quoted publicly.

(d) Fleet Air Arm (Appendix No. 4).

I n the estimates of requirements contained in D.R.C. 14, provision for the
Fleet A i r A r m was divided between the " d e f i c i e n c y " p r o g r a m m e dealt w i t h in
(b) above and a separate programme to meet requirements of new construction.
In the present memorandum the cost of aircraft for new battleship and cruiser
construction is included in the cost of t h e Naval Construction P r o g r a m m e shown
in A p p e n d i x No. 1. The figures of cost in A p p e n d i x No. 4 cover the provision of
aircraft for new aircraft c a r r i e r s and for rearmament of or completion of existing
flights a n d also for the maintenance of the Fleet A i r A r m d u r i n g the period of
expansion.
I n addition to the requirements contained in A p p e n d i x No. 4, the A d m i r a l t y
consider t h a t a Fleet A i r A r m Base ashore is a vital requirement for t h e efficiency
of the Fleet A i r A r m . I t is realised t h a t this is a matter which will require p r i o r
consultation between the A d m i r a l t y and the A i r Ministry, a n d the proposal is
only mentioned a t this stage because to omit i t from this general review of naval
defence requirements would be misleading. The A d m i r a l t y estimate t h a t the cost
of this base would be some £5,000,000. This estimate is mentioned without
prejudice to the principle of whether the provision would finally a p p e a r in Naval
or A i r Estimates and as t h e scheme is at present only tentative it is not included
in the Summary of estimates of cost, and no actual proposals for c a r r y i n g out t h e
work are made a t the moment.

(e) Possible Base in Cyprus (Appendix No. 5).

The question of a possible base in Cyprus to supplement our base facilities
in the Mediterranean in the event of a war w i t h I t a l y or France is discussed in
Appendix No. 5.
This proposal raises many big questions and while an estimate of cost is
attached to A p p e n d i x No. 5 no actual proposals for carrying out the work a r e
made at this stage a n d nothing is included for this purpose in the summary of
estimates of cost.
[12270-1] B 2
 11. A p p e n d i x No. 6 shows the total expenditure in excess of the Navy
Estimates for 1935 t h a t would follow directly from the proposals contained in
t h i s memorandum (except t h a t in r e g a r d to a Base in Cyprus and the Fleet Air
A r m Base) in each of the years 1936-1942. Allowance must, however, be made for
t h e omission, which will be of increasing importance in the later years, of
provision for indirect consequences, such as, e.g., increased expenditure on main­
tenance a n d t r a i n i n g of the fleet. I t has not been found possible to determine
even approximately the amount of such expenditure.
(Signed) ERNLE CHATFIELD,
Chief of the Naval Staff.

October 9, 1935.
 APPENDIX No. 1 to SCHEDULE I.

Approximate Cost of New Construction for the Years 1 9 3 6 - 4 2 on the Basis of the attached Programme of Shipbuilding.

Garry on to
1936. 1937. 1938. 1939. 1940. 1941. 1942. 1943 and later Total.
year.

Old Programme 1935 14,400,000 9,700,000 2,550,000 26,650,000

New Programme 1936 5,465,000 15,207,500 11,050,000 5,800,000 500,000 38,022,500
New Programme 1937 6,495,000 13,377,500 12,675,000 6,950,000 750,000 40,247,500
New Programme 1938 6,095,000 13,172,500 11,485,000 5,115,000 500,000 36,367,500
New Programme 1939 , , * *"
... 5,000,000 11,667,500 11,090,000 6,150,000 1,000,000 34,907,500
New Programme 1940 ... 3,250,000 6,820,000 4,805,000 2,400,000 17,275,000
New Programme 1941 ... 2,550,000 5,335,000 7,770,000 15,655,000
New Programme 1942 ... ... 3,175,000 13,925,000 17,100,000

Abate for H.M.A.S.

Sydney 540,000 360,000 200,000 ... ... 1,100,000

19,325,000 31,042,500 32,872,500 36,647,500 33,852,500 26,325,000 19,965,000 25,095,000 225,125,000

SU5
 EXPLANATORY NOTES ON A P P E N D I X 1—BUILDING PROGRAMME.

(A)—Capital Ships. ,
I n p a r a g r a p h 14 of Annex I I I to N.C. (M) (35) 50, R e p o r t by the British
Representatives on the Anglo-German Naval Discussions, it was stated :—
" Im. these circumstances, it may be essential for the Naval Staff to
recommend a more r a p i d replacement of the B r i t i s h battlefleet in order to
ensure t h a t in new ships the British Fleet does not fall behind the capital
ship strength of J a p a n and Germany combined."
2. The more detailed information of the German building programme that
has been communicated to us since the date of t h a t report enables the position to
be reviewed i n greater detail, t a k i n g into consideration also the French and
J a p a n e s e naval building programmes as far as they are known.
German Capital Ship Building Programme.
3. The G e r m a n capital ship building programme, which it is intended to
complete by the end of 1942, comprises five new capital ships. To enable the fifth
ship to be constructed the Germans calculate on t r a n s f e r r i n g tonnage into t h e
capital ship category or on " adjusting " the category tonnage.
4. Capital Ships " D " and " E " of 26,000 tons w i t h 11-inch guns (Ships
" A , " " B " and " C " are Deutschlands) are expected to complete by the
end of 1938; Ship " F " of 35,000 tons with 14-inch or 15-inch guns will be laid
down on the 1st July, 1936, and should.complete in 1940; Ship " G , " which will
be of 35,000 tons if France builds a second 35,000-ton ship, is expected to complete
in 1941; Ship " H " of the maximum qualitative limit t h a t may be agreed upon
is expected to complete in 1942.

Japanese Building Programme.

5. The J a p a n e s e building programme is not known, but for the purpose of
t h i s paper it is assumed to be not less t h a n t h a t indicated by A d m i r a l Yamamoto
as his personal programme, viz., 4 ships to be laid down in the six years 1937-1942,
of which 2 ships might be completed by the end of 1942.

French Building Programme.

6. France is building 2 Battle Cruisers of the Dunkerque class, laid
down in 1932 and 1934 respectively (26,500 tons each w i t h 8 - 1 3 - i n c h guns and
h i g h speed); she intends to lay down a new ship of the France class of
35,000 tons, w i t h 15-inch guns, towards the end of 1935, and to lay down a second
ship of this class on or after the 1st J a n u a r y , 1937. F u r t h e r programmes are
unknown and probably undecided.

Italian Building Programme.

7. Italy is building 2 ships of 35,000 tons and 15-inch guns, which were laid
down in 1934. ,

Summary of New Ships.

8. Thus, at the end of 1942 we may be faced with a German Capital Ship
force of 5 new ships (not including the Deutschlands). D u r i n g the same period,
J a p a n may have completed at least 2 new capital ships, France 4 or more, and
I t a l y 2.
Modernisation.
9. J a p a n is modernising all her capital ships, and i t is anticipated t h a t all
9 ships will have been modernised before the end of 1937.
10. France is modernising the 3 ships of the Bretagne class which were
completed in 1915 and 1916. The 3 ships of the Jean Bart class (completed
1913 and 1914) were extensively refitted in 1929, though it is not considered that
they can be regarded as " m o d e r n i s e d " ships. The Diderot class (completed,
in 1911) have not been modernised and are considered to be of small fighting value.
I t is possible t h a t they may be scrapped on completion of the new ships, and they
have not been included in the comparison of numbers.
 11. I t a l y is modernising her 2 ships of the Giulio Cesare class a n d greatly
increasing their speed.
12. Of the B r i t i s h Fleet, Nelson, Rodney a n d Hood a r e post-war ships t h a t
do not require modernisation. Warspite, Queen Elizabeth and Renown will be
completely modernised. Bar ham, Malaya, Royal Oak, and Repulse have been
or are now injhand for p a r t i a l modernisation, but they w i l l not be re-engined, nor
will they have improvements to m a i n armament mountings or such increased A / A
armaments and aircraft. They cannot be counted as " modernised " ships. T h e
remaining 4 ships of the Royal Oak class and Valiant axe not being modernised
at all.
13. I t is desired to emphasise once again t h a t " m o d e r n i s a t i o n " is not a
substitute for a p r o p e r replacement programme. A s was pointed out in the
Appendix to N.C. (M) (35) 1, whatever r a t e of replacement (within practical
limits) is adopted, the extreme age to which some of our ships will necessarily
have to last must give cause for t h e greatest anxiety. T h e present modernisation
programme is designed to make the older ships reasonably able to carry out their
functions for the period t h a t they must remain in service; i t does not make them
comparable to new ships. This especially applies to t h e p a r t l y modernised ships.
14. T h e minimum situation as regards numbers of capital ships w i t h which
we may be faced a t the end of 1942 is shown below, together w i t h the B r i t i s h
position t h a t will result from the adoption of the different replacement
programmes indicated :—

Modern or
TJnmodernised
New Ships. Modernised Total.
Ships.
Ships.

Germany 5 5
(4-3 Deutsohlands) (-f- 3 Deutsahlands)
Japan ... ..: 2 7­ 9
France ... ... 4 3 "3 10
Italy ... 2 2
5(a) 6 "4 15
British (
6(b) 6 3 \ 15
Commonwealth 1 2
7(c) 6 15 ­ ­
;

(a) British replacement programme of 2 : 1 : 2 ships a year.

(b) British replacement programme of 2 ships a year.
(c) British replacement programme of 2 : 3 : 2 ships a year.

15. The figures for J a p a n in this table a r e based on the assumption t h a t

J a p a n scraps a ship for each new ship completed. Should J a p a n r e t a i n her old
ships on completion of t h e new ones her total would be 11, a n d by r e t a i n i n g 2 of
the older ships (which, however, would not be modernised ships) the B r i t i s h total
would be 17.. I t is w o r t h noting t h a t 35 per cent, of the tonnage represented by
these 17 ships would not give Germany sufficient tonnage to build more t h a n the
5 ships already allowed for. If, however, the B r i t i s h number was increased to
18, Germany would have a reasonable claim to build a sixth ship.
16. I t will be seen t h a t the B r i t i s h total of 15 ships is approximately equal
to the total of Germany and J a p a n , if we count the 3 Deutschlands as only equal
to one ship, but there are 7 new ships in the German-Japanese total, and 7
modernised J a p a n e s e ships as well. A British building p r o g r a m m e of 2 ships a
year (Table C of Enclosure No. 3 to A p p e n d i x to N.C. (M) (35) 1) would produce
only 6 new ships by the end of 1942, a n d a programme of 3 ships in 2 years only 5,
even if the ships laid down in 1939 were started sufficiently early to ensure their
completion within the year 1942. Both of these programmes are inadequate in.
the face of the German and J a p a n e s e programme, which, as stated above, will
realise 7 new ships at this date.
17. A building programme of 7 ships in 3 years, to provide equality in new
ships only w i t h Germany and J a p a n , is, therefore, the least t h a t gives reasonable
security, a n d then only if the 1939 ships are laid down sufficiently early to be
completed within the year 1942. Moreover, the first 2 ships should be laid down
 a

at the earliest possible moment, i.e., J a n u a r y 1937. If J a p a n s t a r t s building at

a greater r a t e t h a n has been assumed in this paper the rate of building would
require further acceleration.

(B)—Aircraft Carriers.
H i t h e r t o our building programme for aircraft carriers has been aimed at
providing five large aircraft carriers which would accommodate approximately
360 aircraft.
I n order to spread the replacement, the rate of construction hitherto
proposed has been one ship every three years. Under this r a t e of construction
Courageous and Glorious would not have been scrapped u n t i l they reached the
age of t h i r t y and thirty-three years, respectively, counting from the time of their
first completion as cruisers. There is grave doubt whether ships which have to do
so much steaming could be made to last for such periods, but the matter has
hitherto been governed by the fact t h a t the scrapping age of aircraft carriers, as
laid down in the Washington Treaty, twenty years, has been held to apply as from
the date of completion as aircraft carriers, under which rule they could not be
replaced earlier. I t was the intention to raise the question of special allowance
being made for these ships in any treaty to replace the W a s h i n g t o n Treaty. As
there is now no probability of quantitative limitation of aircraft carriers
preventing the replacement of these ships when desired, more r a p i d replacement is
obviously desirable.
2. Both Commanders-in-Chief of the large fleets have pressed for carriers
containing smaller numbers of aircraft, so t h a t they may be separately and more
widely disposed. The A d m i r a l t y concur in this view, and it is accordingly now
proposed to aim at a force of three large carriers accommodating seventy-two
aircraft each and four small carriers accommodating thirty-six aircraft each,
giving the same total aircraft accommodation as in the previous policy of five
large aircraft carriers.
3. The proposals in the present paper allow for the laying down of 4 carriers
w i t h i n the period 1936-1942, of which one will be a large one and 3 small.
By the end of 1942 replacement vessels will have been completed for all
existing carriers except Courageous and Glorious. Courageous will be replaced
about 1944 by the last of the 4 carriers mentioned, which it is only proposed to lay
down in 1941, and she will then be 27 years old from the date of her original
completion as a cruiser. Glorious, of the same age, will remain to be replaced at a
later date.

(C)—Cruisers.
1. Nobody can foretell at the present moment w h a t will be the cruiser
problem t h a t we shall have to face during the next decade. If there is no agree­
ment on total tonnage or on qualitative limitations, any size of cruisers may be
built, and we shall be forced to make an adequate reply. The calculations of
the cost of Cruiser building in the programme of new construction is based on
the assumption t h a t the new cruisers to be built are mainly of t h e 10,000-ton
6-inch gun type. I t must therefore be regarded as a minimum.
2. I t is necessary in the first place to consider by w h a t date we should aim
at bringing the B r i t i s h Commonwealth Cruiser strength u p to the minimum
requirement of 60 Under-age Ships in a total of 70 ships. I t would be desirable,
if it were practicable, t h a t this position should be reached in 1942, since Germany
has announced her intention of completing her 35 per cent, quota by t h a t year,
and all of i t will be under-age. I n relation to the F a r Eastern situation, an
earlier date would be suggested, but, as will be seen from p a r a g r a p h 4, the
question is determined by w h a t is practicable r a t h e r than by w h a t is strategically
desirable. 1942 is therefore a convenient date on which to base the present
review. The state of the Commonwealth cruiser force a t the end of t h a t year
that would result from various building programmes is set out in the
attached table.
3. I t will be seen that in the table 44 R.N. cruisers are shown in full
commission. The number of R.N. cruisers at present maintained in full commis­
sion is 30, but in the view of the Naval Staff an increase in this number is
necessary for the following r e a s o n s : The present tension in the M e d i t e r r a n e a n
has exposed markedly our weakness in cruisers in commission. I n order to equal
even the I t a l i a n cruiser strength in the M e d i t e r r a n e a n it h a s been necessary to
reinforce the cruisers of the Home and M e d i t e r r a n e a n Fleets by w i t h d r a w i n g
those stationed all over the world for the protection of our trade. The w a r
training of the Home Fleet is handicapped by having only one cruiser squadron
in that fleet, and squadrons abroad are h a n d i c a p p e d by the absence of ships
returning home for refits and recommissioning. I n addition, it is undesirable
to have too large a percentage of cruisers in reserve, or to p u t into reserve
comparatively new ships. I t is intended, therefore, to add a second squadron
to the Home Fleet and to increase the Home and Mediterranean Fleet cruiser
squadrons from 4 to 5 ships each. The normal number of ships in a fleet cruiser
squadron has in the past always been five, and was only reduced in 1930-31 as
an economy measure. T h e increase of 14 ships in commission would therefore
be distributed as follows :—
New Home Fleet Squadron ... o
Additional ship to 1st, 2nd, 3rd O S . 3
Additional ships to other foreign stations... 6

14

4. I t is not considered t h a t the position resulting from a 3-ship-a-year

programme, which would still leave us w i t h 23 overage cruisers in our total in
1942, is one t h a t can be accepted. On the other hand, if we are to complete the
whole of our requirement of 60 underage cruisers by t h a t date, it will be seen
that 24 ships (plus 1 R.A.N.) would have to be included in the four programme
years 1936-39. So r a p i d an increase would entail a large number of compara­
tively modern ships being placed in reserve, and no further building could take
place between 1939 and 1 9 4 5 , when ships would be laid down to replace the Kent
Class which become overage in 1948. I t is considered t h a t a steady building
programme of 5 ships a year offers a suitable compromise, a n d is recommended
for adoption. If the 5-ship-a-year programme is adopted up to 1939 4 ships can
be included in the 1940-44 programme period.

[12270--1
 Building programme of
Present Building Pro- 25 (1 of which is Proposed Building Pro.
gramme of 3 ships/ R.A.N.) ships in gramme of 5 ships/
year. 1936-39 programmes year + 1 R.A.N. ship
(inclusive). to replace Adelaide.

Underage ships in 1942 15 8-inch. 15 8-inch. 15 8-inch.

10 Southamptons. 10 Southamptons. 10 Southamptons.
8 Leanders. 8 Leanders. 8 Leanders.
4 Arethusas. 4 Arethusas. 4 Arethusas.
10 " New Types." 23 " New Types. "* 19 " New Types. "*

47 60 56

Overage ships to make 2 E. Glass. 2 B. Class. 2 E. Class.

total 70 ships in 1942 4 Hawkins or 4 0. 4 Hawkins or 4 D. 4 Hawkins or 4 C.
Class. Class. Class.
8 D. Class. 4 D. Class. 8 D. Class.
1 Adelaide.
8 C. Class.

23 10 14

Details of 44 R.N. Ships . 11 8-inch. 11 8-inch. 11 8-inch.

in commission in 1942 10 Southamptons. 10 Southamptons. 10 Southamptons.
5 Leanders. 22 " New Types." 1 Leander.
4 Arethusas. 1 Are thus a. 18 " New Types."
10 " New Types." 4 Arethusas.
4 Overage ships.

44 44 44

Dominion Ships 1942 2 8-inch R.A.N. 2 8-inch R.A.N. 2 8-inch R.A.N.

-6 2 6-inch R.A.N. 2 6-inch R.A.N. 2 6-inch R.A.N.
(1 Leander, (1 Leander, (1 Leander,
1 Adelaide). 1 New Type). 1 New Type).
2 Leanders, New 2 Leanders, New 2 Leanders, New
Zealand. Zealand. Zealand.

6 6 6

Details of 20 R.N. Ships 2 8-inch Refitting. 2 8-inch Refitting. 2 8-inch Refitting.

refitting or in reserve, 18 Overage as above 5 Leanders. 4 Leanders.
1942 less Adelaide. 3 Arethusas. 14 Overage as above.
10 Overage as above.

20 20 20

* Assumes R.A.N. build one ship to replace Adelaide.

(D)—Destroyers.
The A d m i r a l t y policy for replacement of destroyers since the w a r has been
largely influenced by the desirability of having a steady replacement programme,
and for this reason only one flotilla a year has been built u p to 1935, in spite of
the fact t h a t all the destroyers being replaced were completed in the war years,
and so come overage about the same time.
2. In A d m i r a l t y P a p e r No. 1, p r e p a r e d for the 1935 Naval Conference, it
was proposed t h a t we should accept a limit of 150,000 tons (12 flotillas) of
destroyers, and t h a t if submarine tonnage was not reduced we should retain a
further 50,000 tons (4 flotillas) of " overage " vessels. This proposal was put
forward when it w a s hoped to obtain a tonnage limitation in each category and
by keeping a portion of our destroyer tonnage permanently overage we should
thus limit the underage destroyer tonnage of other Powers to an agreed ratio of
underage tonnage, whilst still retaining additional vessels ourselves for
Anti-Submarine duties.
 9 i
.4 d

3 . I t seems most unlikely now t h a t any limitation by total tonnage in

various categories will be agreed to in any conference in the near future, or t h a t
submarine tonnage will be reduced, and it is therefore necessary to review t h e
proportion between " u n d e r a g e " a n d " overage " tonnage.
4. The first four post-war flotillas become overage 1946-49, a n d hence till
that date, if we are to r e t a i n 4 overage flotillas, these flotillas will have to consist
of war-built " V " a n d " W " classes, completed in 1917-19; some of these
ships, therefore, will not be scrapped till they a r e 30 years old.
5. On completion of the 1936 programme, there will be 11 u n d e r a g e flotillas
complete a n d only one more flotilla would be required to be built to complete the
12 underage flotillas u n t i l replacement for the " A " class is required in the 1944
programme.
6. To spread out destroyer building and to reduce the time the older
" V " class will have to be retained, it is necessary t h a t the p r o p o r t i o n of
underage to overage tonnage should be temporarily increased, a n d a flotilla is
accordingly included in each of the 1938, 1940 a n d 1942 programmes.
This will result in the following position :—
Underage. Overage.

Flotillas. Flotillas.
1938 11 5
1939 11 5
1940 12 4
1941 12 4
1942 13 3

[12270-11 i)
 A P P E N D I X NO. 2 to S C H E D U L E 1.

Navy Deficiency Programme (except Personnel and Fleet Air Arm, for which see Appendices 3 and 4).

Provision proposed.!

Item (Number as in D. 1.1.0. 14). Provision in Eemaining ! Balance

Total Cost. Eemarks.
1934 and 1935. be provided (Asterisk
1936. 1 9 3 7 . 1938. indicates
completion
in 1939).

(1) (2) (3) (4) (5) (6) (?) (8) (9)

&
2. Modernisation of Capital 6,406,000 4,558,000. 1,466,500 1,497,500 1,111,400 482,600*
Ships 1,848,000
4. Anti-Submarine Equipment 362,500 325,000 116,000 110,000 99,000
of Auxiliary Vessels 37,500
5. Local Seaward Defences ... 1,436,400 1,330,000 446,000 444,000 440,000
6. Fleet Fuelling Eeserves— 106,400
(a) Storage—
(i) Works ... 2,575,000 2,281,000 665,000 1,039,000 513,000 64,000*
(ii) Machinerv 80,000 294,000 80,000 20,000 33,000 17,000 10,000*
(b) Oil Fuel ..." ... 3,410,000 3,410,000 758,000 1,365,000 985,000 302,000*
7. Ammunition for the Fleet... 1,756,900 1,455,800 873,700 372,700 209,400
8. Torpedoes to complete Ee­ 865,200 301,100 865,200 154,700 406,300 304,200
serves (including T.N.T.)
j). Mines for Far East and 1,240,000 1,004,000 88,100 98,100 98,100 719,700 To complete
Eeplacement of H.2 236,000
by 1950.
Mines (including T.N.T.)
10. Stores and Equipment for 1,695,500 122,500 1,573,000 527,000 520,700 525,300
Auxiliary Services
11. Naval Stores for Miscel­ 1,900,000 262,000 1,638,000 546,000 546,000 546,000
laneous Services
12. Victualling and Clothing 288,000 39,000 249,000 83,000 83,000 83,000
Stores
 Depots and Storage—
(a) Works 2,991,000 64,000 2,927,000 241,000 577,000 449,000 1,660,000 To complete
by 1942.
(b) Machinery ... 490,400 3,000 487,400 78,000 44,000 32,000 333,400 To complete
by 1942.
15 14 Depth Charges ... 317,800 22,700 295,100 97,700 98,700 98,700
- 4 15. Medical Stores 37,000 7,000 30,000 10,000 10,000 10,000
? 16. Completion of Singapore
Base—
(a) Works 4,844,000 1,137,000 3,707,000 597,000 1,157,000 1,174,000 779,000 To complete
by 1940.
(b) Machinery, &c. ... 1,375,700 : 144,000 1,231,700 249,500 382,500 470,500 129,200 To complete
by 1940.
New Hem.
17. Boys' Training Establish­
ment, and other works
services—
(a) Works ... 1,330,000 1,330,000 32,000 445,000 608,000 245,000*
(b) Machinery. &c. ... 85,500 85,500 7,500 48,000 30,000*

33,486,900 4,624,200 28,862,700 7,049,200 9,237,000 7,821,600 4,754,900*

f Comparable provision in 1935, £2,836,500.

J Viz., 1939, 2,434,000; 1940, 852,000; 1941, 568,100; 1942, 223,500; 1943-50, 327,300, Item 9; No date assigned, 350,000, Item 13.

b
Is?
Notes on Figures contained in Appendix No. 2, with Special Reference to
Differences between these Figures and those contained in Table B of Paper
D.R.C. 14.
I t will be seen t h a t it is not found possible to compress into three years the
whole of the deficiencies remaining to be provided.
A s compared w i t h a provision for " deficiencies " in the 1935 Navy Estimates
of £2,836,500, the amounts proposed for the succeeding three years are as
follows :—
£
1936 7,049,200
1937 9,237,000
1938 7,821,600

Total ... 24,107,800

leaving £4,754,900 to be met subsequently, of which £2,434,000 would fall in 1939.
I n the following p a r a g r a p h s the main grounds of divergence between the
total for deficiencies under the several headings in the present statement and in
t h a t which was before H i s Majesty's Government in 1934—vide Table B of
C 1 . D . paper D.R.C. 14—are explained in general terms.
The total cost of all items, excluding Naval Personnel and the Fleet A i r Arm,
was given in 1934 as £21,343,000. to which should be added £594,000 (the balance
of the programme to 1950 under Item 9 (Mines)), making a total of £21,937,000,
as compared with the present revised total of £33,486,900. On the other hand,
the provision made in 1934 and 1935 Estimates towards meeting this total was
only £4,624,200, as compared with proposed provision under D.R.C. 14 of
£6,599,100, so t h a t the prospective deficiency as from the 1st April, 1936, is
actually increased by as much as £ 1 3 ^ million, the total being nearly £29 million.
T h i s can, however, be considered as p a r t l y reduced by the amount that, will have
to be found additional in 1935 for certain of the items concerned for emergency
expenditure, wdiich has the effect of reducing the deficiency. The total of such
expenditure approved to date is £830,000.
The factors accounting for the increase of approximately £ 1 2 million in the
total of deficiencies fall under three m a i n heads (the dividing line is, however,
frequently obscure) :—
(1) Compression of expenditure within fewer years (£150,000). I t is
i m p o r t a n t to emphasise t h a t nothing has been included for the
inevitable expansion at the Admiralty and outports in the matter of
staff to cope with the large volume of extra work involved.
(2) Effects of the passage of time (e.g., variation in prices, modern improve­
ments) and of under-estimate of deficiencies in 1934 (£900,000).
(3) Change of policy or in the definition of "deficiencies," including the
addition of a Boys' T r a i n i n g Establishment (£575,000) and further
facilities for manufacture and storage of armament supplies
(£2,250,000).
The main changes are as follows :—

Item No. 2.—Modernisation of Capital Ships.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£1,861,000 £6,406,000 + £4,545,000
Subsequent to the production of the above-mentioned figure in D.R.C. 14,
information received as to the extent of modernisation of these ships by other
Powers shewed t h a t very considerable e x t r a work was necessary on our own ships,
if they were to be comparable to those of the Powers concerned.
The matter was brought to the notice of the Disarmament Conference
Ministerial Committee in paper D.C. (M.) (32) 125, but money was asked for to
c a r r y out full modernisation of only 4 capital ships (Warsjnte, Renown, Queen
Elizabeth, Valiant). The work involved consisted principally of re-engining and
re-boilering, increasing the elevation of t u r r e t guns, addition, & c , to A.A.
armament and new equipment of 15-inch shell. These proposals led to a very
considerable increase on the figures given in D.R.C. 14.
 Owing to the increased building programme now required (see A p p e n d i x
No. 1), it has been possible to remove Valiant for the present from t h e list of ships
to be fully modernised, so t h a t the total is reduced by the £2,000,000 approximately
that would have been required to modernise t h a t ship.

Item No. 4.—-Anti-Submarine Equipment of Auxiliary Vessels.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£250,000 £362,500 -I- £112,500
The figures in D.R.C. 14 provided for an increased provision of asdic and
depth charge sets to equip auxiliary vessels t h a t would be taken u p on the outbreak
of war.
The present emergency, in which a possible w a r in the n a r r o w w a t e r s of the
Mediterranean is visualised, has emphasised the need for increased provision of
anti-submarine a p p a r a t u s . I n particular, provision is now made in A p p e n d i x
No. 2 for fitting A / S equipment to 40 old destroyers a n d to provide reserves of
harbour defence A / S sets and reserves of q u a r t z from which A / S oscillators are
constructed and which can only be obtained from sources outside the B r i t i s h
Empire.
Item No. 5.—Local Seaward Defences.
D.R.C. 14. A p p e n d i x No. 2. Difference.
£1,075,000 £1,436,400 . -i- £361,400
The programme of expenditure in D.R.C. 14 covered the provision of local
seaward defences, particularly against submarine activities, at ports at Home and
Abroad, excluding I n d i a n and Dominion ports and certain bases of relatively
minor importance, such as B e r m u d a and K i n g s t o n (Jamaica).
Provision is now made for further boom defences at Singapore in view of
the development of new types of fast motor boat. A t H o n g Kong provision is also
now made for booms and other forms of local seaward defences which are not
permitted so long as Article X I X of the W a s h i n g t o n T r e a t y is in force. This
item is inserted in view of the possibility t h a t the W a s h i n g t o n Treaty will lapse
after the 31st December, 1936. The present lay-out of local seaward defences at
Hong Kong is admittedly quite inadequate.

Item No. 6.—Fleet Fuelling Reserves.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£ £ £
(a) Storage ... 2,476,000 2,655,000 +179,000
(&) Fuel ... 4,180.000 3,410,000 -770,000

Total ... 6,656,000 6,065,000 -591,000

The amount of oil to be provided remains the same as in D.R.C. 14. The
increase in the cost of storage is mainly due to compression of the period allowed
for construction of tanks into three years. The large reduction in the cost of
oil is mainly due to a revision of the policy as to where it is to be stored, resulting
in a greater proportion being stored abroad instead of in the U n i t e d Kingdom,
with a consequent large reduction of freightage charges.

Item No. 7 . — A m m u n i t i o n for the Fleet.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£681,000 £1,756,900 -h £1,075,900
The main provision under this head in D.R.C. 14 was for ammunition for the
new type of anti-aircraft pompom which is being mounted in the larger ships of
the fleet and which is a weapon of great importance for resisting attack by
torpedo-carrying aircraft and diving bombers.
T h e increase now proposed is again due almost entirely to increased provision
for anti-aircraft ammunition, but it is now for all types of a n t i - a i r c r a f t guns,
for which a much larger amount of ammunition t h a n t h a t hitherto provided
is considered essential, in view of developments of modern aircraft a n d the
rapidity of fire of the modern anti-aircraft gun.
 Item. No. 8.—Torpedoes to complete reserves.
D.R.C.14. A p p e n d i x No. 2. Difference.
£563,000 £865,200 -t- £302,200
T h e deficiency in connection with torpedoes originally arose from the fact
t h a t as a measure of economy the reserve of torpedoes provided for various classes
of ships was, in 1925, reduced from 100 per cent, to 66f per cent. The deficiency
figures in D.R.C. 14 represented generally the cost of providing the e x t r a 3 3 ^ per
cent, of reserves for destroyers and submarines. I t was not possible at the time
D.R.C. 14 was d r a w n u p to make satisfactory proposals for completing the
deficiency because of the lack of factory capacity. The deficiency has been
increased since the figures in D.R.C.14 were prepared owing to the completion
of new ships for which only 66f per cent, reserves have been provided. I t is
considered t h a t the full completion of these important deficiencies should now be
undertaken and the recent decision to establish a new torpedo factory enables
this to be done.

Item No. 9.—Provision of Mines for Far East and Replacement of H.2 Mines,
D.R.C.14. A p p e n d i x No. 2. Difference.
£646,000 £1,240,000 -j- £594,000
The figures for mines in D.R.C. 14 allowed only for the money to be spent
u p to 1942 and it w a s stated in t h a t paper t h a t the programme extended till
1950. The total programme and its cost at t h a t time was the same as that shewn
in A p p e n d i x No. 2, where it is now included in full, so t h a t the increase of
£594,000 is an a p p a r e n t a n d not a real one. As the provision of these mines is
largely a matter of replacement r a t h e r than a new requirement, provision on a
programme extending till 1950 is being continued.

Item No. 10.—Stores and Equipment for Auxiliary Services.

D.R.C.14. A p p e n d i x No. 2. Difference.
£1,652,000 £1,695,500 4- £43,500
T h e small increase on this item is due to an increased estimate of the cost
of providing a reserve of p a r a v a n e (anti-mine) equipment to be used by merchant
vessels in the event of w a r .

Item No. 11.—Naval Stores for Miscellaneous Services.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£1,900,000 £1,900,000 No change.
While there is no change in the total, provision is now made to make good
this deficiency in the three programme years 1936-38.

Item No. 12.— Victualling and Clothing Stores.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£275,000 £288,000 4- £13,000
The small increase in this item is due to extra provision of clothing required
for decontamination work after gas attack.

Item No. 13.—Depots and Storage.

D.R.C.14. A p p e n d i x No. 2. Difference.

(a) Works 992^00 2,991,000 4- 1,9^9,000

(b) Machinery ... ... 490,400 4- 490,400
Total ... 992,000 3,381,400 4- 2,489,400
The considerable increase in this item is due to the inclusion of new depots
not included in the tables in D..R.C. 14, the main items being for a new main
armament depot and other necessary magazines (£2,250,000). The existing
congestion in storage for explosives was referred to in D.R.C. 14, a n d for reasons
of safety and to allow for storage of the increased provision of ammunition now
being made it is necessary to construct these new magazines. I t is hoped t h a t
it will be possible for the site of this new depot to be in a " depressed a r e a . "
I t is not possible to complete these magazines w i t h i n the years 1936-38 a n d a
large proportion of the sum will remain to be spent in later years. The mine
depot in the Mediterranean, referred to in D.R.C. 14 (which the present emer­
gency has shown to be an i m p o r t a n t requirement), is included in these figures,
£440,000, but the whole of this sum is included in expenditure subsequent to 1938.
The figures in D.R.C. 14 did not allow for provision for machinery a t the
various depots and this is now included at a cost of some £500,000.

Item No. 14.—Depth Charges.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£320,000 £317,800 - £2,200
I n D.R.C. 14 the replacement was spread over the years u p to 1942, but it is
now proposed to complete replacement in the three programme years 1936-38.
The small decrease is due to revised estimates of costs.

Item No. 15.—Medical Stores.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£37,000 £37,000 No change.
I n this item again it is now proposed to complete provision in the three
programme years 1936-38.

Item No. 16.—Completion of Singapore Base.

D.R.C. 14. A p p e n d i x No. 2. Difference.
£ £ £
(a) W o r k s ... ... 3.510,000 4,844,000 -f- 1,334,000
(6) Machinery, &c. 925,000 1,375,700 + 450,700

Total 4,435,000 6,219,700 -r 1,784,700

The provision in D.R.C. 14 allowed for the following m a i n items :—

(a) Completion of Jackson Contract (docks, wharves, dredging, & c ) .
(&) Erection of a generating station, p u m p i n g station and entrance caissons
for the dock.
(c) Building an armament and mine depot.
(d) Provision of workshops, storehouses, &c.
(e) Construction of water supply, reservoir and oil pipe-line.
The increase in this item is in p a r t due to speeding up, but mainly t o
provision now being made for various requirements at this base which have
from the first been required for the scheme, but for which provision h a s been
omitted, since the need for strict economy and the assumption t h a t a period of
warning would be available before the base could be required for use m a d e i t
desirable and possible to p u t off the full completion of the Base. These require­
ments, which can be met to a small e x t e n t from savings on the former estimate for
the scheme as a whole, a r e —
£
Completion of E a s t and South Walls of Naval Stores Basin 815,000
Four additional U n d e r g r o u n d Magazines to accommodate
e x t r a ammunition ... ... ... ... ... ... 154,600
Boom Defence Depot (completion) ... ... ... ... 50,000
New Torpedo Depot ... 236,500
Submarine Battery Shed ... 30,500
Oxygen P r o d u c i n g and C O . 2 P l a n t 12,500
Distilling P l a n t (completion) ... 10,000
Refuse Destructor (completion) ... ... ... ... 3,000
H i g h Pressure Test Boiler House ... 11,500
 £
Rangefmder Test House 16,000
Completion of Boat House ... 33,000
Dynamic Balancing Machine (completion) ... ... ... 3,500
Electric Power and Lighting Installation for above
(completion) ... ... ... ... ... ... 5,500
Provision of a W h a r f in North Wall G a p to accommodate
destroyers and small craft ... ... ... ... 90,000
Dredging for above ... ... ... ... ... ... 32,000
Provision of a 30 ft. deep channel, 650 ft. wide, between
floating dock and North Wall Gap ... 20,000
Spare Caisson for Dock ... ... ... ... ... 65,000
Motor T r a n s p o r t , &c 10,000
Fuelling facilities afloat ... ... ... . . . . . . 50,000
Accommodation on shore for ships' crews ... ... ... 138,000
Combined S u r g e r y and Sick Quarters ... ... ... 25,900
Hospital for Asiatics ... 22,400
Signal Tower 23,500
Gunmounting Bay ... ... ... ... ... ... 52,000
Heavy Crane Tracks on Gunstorage Ground 53,000
Recreational Facilities ... ... ... ... ... 31,500
Dockside Crane and Standard Gauge Travelling Crane ... 30,000

Total 2,024,000

I t is not possible to include the whole of the extra provision in the programme
years 1936-38, but the dockyard should be in a position to function by 1939, and
i t is hoped to complete all requirements by the year 1940.

Item No. 17.—Boys' Training Establishment and other Works Services.

D.R.C. 14. A p p e n d i x No. 2. £
.' ' Nil. (a) W o r k s 1,330,000
(6) Machinery, &c. ... . 85,500

Total 1,415,500
T h i s is a new item, for which no provision was made in D.R.C. 14. £575,000
of the sum shown is due to the need for the provision of a new Boys' Training
Establishment. The two existing Boys' T r a i n i n g Establishments are quite
inadequate to allow the increase of personnel now required (Appendix No. 3) to
be made, both establishments being already full to capacity. T h e t r a i n i n g period
cannot be shortened, and i t is consequently urgently necessary to provide a new
t r a i n i n g establishment.
£410,500 is for the widening of No. 10 dock at Plymouth, to enable it to take
large capital ships and for the provision of a spare entrance caisson for t h a t dock.
There is a t present no dock at Plymouth which will take a large capital ship.
£30,000 is for the expansion of the A n t i - S u b m a r i n e base at P o r t l a n d to
enable it to fulfil its duties in connection w i t h the increased requirements of
anti-submarine material, personnel and training.
£400,000 is also included for the widening of the large dock at Gibraltar to
take any capital ship (except Hood). Experience in the present emergency has
shown t h a t this is a matter of great importance.
g APPENDIX No. 3 TO SCHEDULE I.
o -

PERSONNEL.

Statement of Increased Expenditure on Pay, Allowances, Victualling and Clothing (non-effective charges not included).

Provision required to be made year by year.*

Tota
Totall provisio
provisionn
Item
Item.. in 193
19344 an
andd To be provided
Remarks.
Remarks .
in 1936-42.
1935.
1935.
1936. 1937. 1938. 1939. 1940. 1941. 1942.

£ £ £ £ £ £ ' £ £ £
Increases of years 1934 459,000 3,920,000 560,000 560,000 560,000 560,000 560,000 560,000 560,000 The annual charge continues
and 1935 at £560,000 so long as the
numbers are maintained at
94,482.

Increases of 5,084 a year 10,348,000

10,348,000 260,00
260,0000 780,000
780,000 1,400,000
1,400,00 0 2,155,000
2,155,000 2,743,000
2,743,000 3,446,000 4,154,000
4,154,000 The annual charge continues
in years 1936-42 in- to increase and ultimately
clusive becomes £6,100,000 so long as
numbers are maintained at
130,000.

Total 459,000 14,268,000 820,000 1,340,000 1,960,000 2,715,000 3,303,000 4,006,000 4,714,000 The ultimate annual total
direct charge, £6,660,000.

* N.B,-Provision in 1935 in respect of increases made in 1934 and 1935 is £379,000.

 A P P E N D I X No. 4 TO S C H E D U L E 1.

Fleet Air Arm.

Total,
excluding pro­
Cost of
Cost of New Cost of Bombs periodical Maintenance
vision of
Aircraft for and Torpedoes rearming of Aircraft for
Year— of whole
Carriers and for New Fleet Air Arm Fleet Air Arm. new construc­
modernisation. Aircraft. - Units. tion Capital
Ships and
Cruisers.

£ £ £ £ £
1936... 117,000 30,000 2,050,000 1,100,000 3,297,000
1937 ... 657,000 133,000 "705,000 1,368,000 2,863,000
1938 ... 571,000 191,000 927,000 1,640,000 3,329,000
1939... 597,000 108,000 1,110,000 1,950,000 3,765,000
1940... 858,000 281,000 1,312,000 2,310,000 4,761,000
1941 ... 741,000
741,00 0 250,000 1,570,000 2,712,000 5,273,000
1942 ... . 15,000 1,800,000 2,902,000 4,717,000

Total . ... 3,541,000 1,008,000 9,474,000 13,982,000 28,005,000

NOTES.

1. The total number of new first line aircraft is 314, an increase of 37 over the figures given in
D.E.C. 30, paragraph 36. This 37 is accounted for by a slight increase in the carrying
capacity of the carrier programme contained in Appendix 1 and by the fact that the
cruiser programme is slightly increased and extended beyond the original programme date.
2. The total capital cost of aircraft for carriers and for modernising H.M. ships is £3,541,000.
There is a further capital cost of aircraft for new construction ships. amounting to
£2,594,700, but this is included in the cost of the ships themselves.
3. There will also be a possible addition of about £570,000 for 60 aircraft as alternative equipment
for certain cruisers. This will materialise between 1939 and 1941.
4. It is' further possible that one existing carrier might be retained as a training carrier; if
so she will keep her aircraft, and to that extent there will be an increase in the capital
cost of new aircraft in the year when she would have been scrapped and an increase in
the annual maintenance cost of the F A . A . thereafter.

A P P E N D I X No. 5 TO S C H E D U L E I.

Possible Base in Cyprtis.

The present emergency has shown that u n t i l experience has proved w h a t the
t h r e a t from the a i r really amounts to and whether it can be effectively countered
by anti-aircraft defences, we must remain uncertain of being able to make full
use of our main base in the Mediterranean (Malta) in a war against France or
Italy. The present situation of our fleet in E a s t e r n Mediterranean ports w i t h no
docking facilities whatever is one t h a t can only be contemplated w i t h serious
anxiety.
A n investigation has accordingly been carried out as to the possibility of
providing base facilities elsewhere in the Eastern Mediterranean. I n view of the
status of E g y p t and Palestine, Cyprus is considered the most satisfactory site
for such a base, and a tentative estimate for establishing a base a t F a m a g u s t a in
t h a t island is given in the table attached to this Appendix.
I t is not - for several reasons suggested t h a t M a l t a (where we have sunk
millions of money) should be abandoned as a naval base. Firstly, the doubt as to
its availability only arises in connection with a w a r w i t h I t a l y or France, and it
would be of g r e a t value in any other conflict. Even in a w a r w i t h France the
question would not be of such great importance as in the case of Italy, because
such a w a r would be mainly fought in the Atlantic, and not in the Mediterranean.
 Secondly, to abandon M a l t a as a Naval Base would lead to a most difficult
situation in connection w i t h the Maltese population, which has increased largely
during the century and half we have occupied the island a n d which is to-day
largely dependent on the Navy and garrison for its livelihood.
Again, such abandonment would inevitably lead to g r e a t growth of the
present p r o - I t a l i a n feelings a n d it m i g h t even raise the question of the cession of
the Island to Italy, which Icould not be contemplated from the strategical point
of view. !
While the above reasons for r e t a i n i n g our base a t M a l t a are considered
decisive, we may well be faced in the ensuing years w i t h a hostile I t a l y r e a d y to
threaten our position in the M e d i t e r r a n e a n if ever we are engaged elsewhere.
This being so, it is considered t h a t it will probably be very desirable t h a t we shall
possess some facilities in the E a s t e r n Mediterranean for the r e p a i r a n d
maintenance of our fleet in addition to those at Malta.
The investigation represented by the attached table made provision for a
full-scale base w i t h a view to investigating the question. I t is unlikely, however,
that such extensive facilities would be required, at any r a t e in the first instance,
but it may well prove advisable to u n d e r t a k e the first essentials of the scheme,
such as the construction of the breakwater and one dock, together w i t h the
provision of sufficient facilities to enable a large ship damaged below water to be
repaired.
While this question is brought to the notice of the Committee, ho actual
proposals for expenditure are made at this stage.

Table Attached to Appendix No. 5.

The figures in p a r a g r a p h 2 below show very approximately the cost of
establishing a Fleet Base a t F a m a g u s t a , which would include :—
(i) Anchorage space for 8 capital ships, 4 a i r c r a f t carriers, 15 cruisers,
54 destroyers, and the necessary small craft and auxiliaries,
(ii) Alongside berths for a proportion of the above.
(iii) 2 capital ship docks, 2 cruiser docks and 2 smaller docks.
(iv) Mine and A r m a m e n t Depot,
(v) Torpedo Depot and Range.
: (vi) F.A.A. Base,
(vii) Hospital a n d Barracks,
(viii) W / T Stations,
(ix) Oil fuel storage for 300,000 tons.
(x) Breakwater and reclamation work as necessary to enclose the above.
2. Estimated Cost of Naval Measures.
£ .
Vote 10, W o r k s a n d E q u i p m e n t ... 14,350,000
Dredging ... 4,000,000
Vote 8, G e n e r a l ' 2,000,000
Miscellaneous 2,035,000
Seaward Defences ... ... 40,000

Total 22,425,000
3. I t is emphasised t h a t these can only be regarded as " t o k e n " figures,
pending /detailed examination of the site, nature of sea bottom, &c. T h i s
particularly applies to the figures which have been included for dredging and
breakwater construction. There would also, of course, be the cost of services n o t
borne by naval votes, such as seafront defences, A i r Forces, &c.
 APPENDIX No. 6 TO SCHEDULE I.

Synopsis of the effect upon Navy Estimates 1936-1942.

(N.B.—Except as regards the Meet Air Arm, increased cost of maintenance and other expenses indirectly resulting
are not allowed for in these figures.)

Approximate requirement for the year.

Provision in Total
Total for
for the
th e
Appendix.
Appendix. 7 years
years 1936-
1936 ­
1935.
1936. 1937. 1938. 1939. 1940. 1941. 1942. 1942.
1942.

£ £ £ £ £ £ £ . £ -'.
1. New Construction* 11,020,000 19,320,000 31,040,000 32,870,000 36,650,000 33,850,000 26,320,000 .19,960,000 200,010,000
2. " Deficiencies " ... 2,840,0001 7,050,000 9,240,000 7,820,000 2,430,000 850,000 570,000 220,000 28,180,000
3. Increase
Increase of Person-
Person- 380,000 820,000 1,340,000 1,960,000 2,720,000 3,300,000 4,010,000 4,710,000 18,860,000
nel
ne l
4. Fleet
Flee t Air
Air Arm
Arm ...
.. . 1,820,000 3,300,000 2,860,000 3,330,000 3,760,000 4,760,000 5,270,000 4,720,000 28,000,000

Total 16,060,000 30,490,000 44,480,000 45,980,000 45,560,000 42,760,000 36,170,000 29,610,000

Increase over 1935 in respect of above

items ... 14,430,000 28,420,000 29,920,000 29,500,000 26,700,000 20,110,000 13,550,000 162,630,000

Increase over figures in D.R.C. 14 in Increase for these years over D.R.C. 14 cannot be given as
respect of above items 10,630,000 24,440,000 25,920,000 new construction forecast in that paper was only carried as
far as 1938

* After deduction of payments by Australia in respect of the Sydney.

f Exclusive of emergency provision which will be made in 1935 and will have the effect of reducing the total requirement
in the following years by possibly £1 million or more.
NOTE.—All figures rounded to the nearest £10,000.
 COPY NO. 8 5

S C H E D U L E I I TO D.R.C. 37

Suggested Programme for Meeting the Deficiencies now

existing in the Defence Services

Note by the Chief of the Imperial General Staff on Army Requirements

In accordance with Conclusion (ii) at the 14th Meeting of the Defence

Requirements Sub-Committee, and the conclusions reached at the 4th Meeting of the
Defence Policy and Requirements Committee (D.R.C. 27), I have had a compre­
hensive revision made of the estimates of Army requirements shown in the tables
attached to D.R.C. 24. In revising the figures, account has been taken of the latest
decisions regarding the reorganization and mechanization of the Army, of the possibil­
ities of stimulating the manufacture of warlike stores both in normal times and after
the outbreak of war, and of probable wastage of material and expenditure of ammu­
nition in a future European war under modern conditions.
2. I t will be seen that as a result considerable adjustments, and in most cases
increases, have had to be made to the original approximate estimates included in
D.R.C. 14 and D.R.C. 24. The reasons for these alterations are explained in detail
below.
3. In addition, further tables are now attached covering the following items which
were not formerly included in the Defence Requirements programme :—
(1) Erection of new factories for ammunition components and filling, and provision
of jigs, tools, etc., for industrial mobilization in order to increase our " w a r
potential." (Appendix II.)
(2) An increase in the number of Infantry Battalions in the British Army.
(Appendix III.)
(3) Replacement of out of date barracks and provision of new barracks.
(Appendix IV.)
4. The first of these three must, I suggest, be considered as directly connected with
our defence arrangements. The second has a very direct bearing both on the efficiency
of our defence arrangements abroad and on the training of the Army at home ; whilst
the third, as has been pointed out in Army Estimates speeches on several occasions,
not only influences recruiting of the Army at home which, as the Committee are aware,
is at present one of the major difficulties we have to face in the preparation of the
Army for war, but is a matter which in any case must be attended to in the near
future as many of the existing barracks and huts provide accommodation considerably
below the accepted standard in civil life, and involve very large expense in upkeep.
The additional tables have therefore been attached in order that the Committee
may have before it as complete a picture as possible of the total ultimate needs of the
Army both at home and abroad.
5. As is explained below, estimates both for warlike stores and for military works are
dependent on a variety of factors which cannot be assessed Avith complete accuracy.
The length of the programme adopted, the demands on firms for civil requirements and
similar factors are all liable to cause considerable variations. It is believed, however,
that the figures shown in the attached tables may be accepted as a good working basis
for assessing the needs of the Army in relation to war in the comparatively near future.

Appendix L (A)—Regular Contingent.

6. (a) Personnel.—This annual recurrent expenditure rising from £180,000
next year to between 1-1 million and one and a half million pounds, according to the
final decision regarding the rate of mobilization, is necessary in order to provide a
sufficient army reserve for existing units and to create certain additional units at
present entirely lacking, such as coast defence units, anti-aircraft units and army tank
battalions. At the present time most of the arms and services have insufficient
reserve personnel to complete them to establishment on" the outbreak of war and to
(9061) A
replace wastage in the interval before post-war recruits can be trained. The shortages
in personnel and the problem of stimulating recruiting is dealt with in more detail in
Appendix VII,
Possible additional infantry battalions are not included in the above estimate of
expenditure which might have to be farther increased if additional financial attractions
have to be offered to obtain sufficient recruits.
7. (b) Material.—It will be observed that the figure shown in the original D.R.C.
report of £14,820,000 (exclusive of ammunition required for the first contingent
during the first three months of war) has now risen to 25 million, approximately,
exclusive of works services (for additional storage capacity, garages, e t c ) .
The reasons for this increase briefly are :—
(a) More detailed calculations are now available as to probable rates of wastage of
material in a European war under modern conditions, and in most cases it
has been necessary to increase the original figures allowed for reserves.
(b) The capacity of industry after the outbreak of war can now be assessed more
accurately, and in many cases it seems certain that reserves to meet
wastage during the initial stages of war must be greater than was at first
anticipated.
(c) Formation of a mechanized mobile division instead of a horsed CaA^alry
Division and the addition of Army Tank Battalions (for the support of
Infantry) have since been allowed for.
The cost of providing on a fully mechanized basis a new Field Artillery equipment
to replace the present 18-pr. gun and 4'5-inch howitzer which must be regarded as
obsolescent, is not included in the above figure of £ 2 5 millions.
Appendix V I , however, contains notes by the Chief of the Imperial General Staff
and the Master General of the Ordnance dealing with this subject, and the probable
ultimate cost is included, in Appendix VII, in the Grand Total of capital sums required.
8. In addition, an estimate has been added for storage and garage accommodation
which will b'e required fcoth for w ar equipment and reserves.
r

I. should here make it clear that in estimating requirements of both equipment and
ammunition reserves, it has been necessary to make a large number of assumptions with
regard to the time taken to produce each individual article of equipment, and these
assumptions naturally affect the quantity of equipment of each class that has to be held
in peace time. The same factors apply to ammunition reserves.
Over and above these detailed assumptions, I should stress the fact that all
estimates for material and ammunition are based on the hypothesis that war will occur
when the programme for completing Army deficiencies has just been completed, i.e.,
when industry has got well into its stride in the matter of providing war-like
stores and can therefore be expected to expand rapidty to meet war conditions. Should
this not be the case, the various branches of industry which have been dealing with the
re-equipment of the Army would naturally in the course of a few years lose a pro­
portion of their " war potential " and the quantities of reserves, both of equipment and
ammunition, would proportionally have to be increased.
9. (c) Ammunition reserves.—The original estimate of £10,860,000 in the D.R.C.
report under this heading has now risen to £35,276,000 (including £743,000 already
passed) plus about one and a half million for works services.
The new figure is based on a more accurate appreciation of the capacity of industry
to meet war expenditure of ammunition, and it should be emphasized that the figure is
absolutely conditional on some £ 1 4 millions being spent as a preparatory measure on
the erection of certain new factories and on preparations for industrial mobilization.
If nothing was done to stimulate industry, the cost of war reserves and ammunition
which it would be necessary to hold in peace time would probably be at least doubled,
and, of course, it would be impossible to build up this reserve of ammunition in five, or
even perhaps, ten years, under present conditions of manufacture.
10. (rf) Erection of new factories for ammunition components and filling and
provision of jigs, tools, etc., for industrial mobilization in order to increase our " war
potential.' ''—The
1
object of this expenditure, £15,805,000, is explained above. Details
of the factories, etc., for which this money is required are given in Appendix I I .
The figure covers the proposals for the removal of two of the Royal Ordnance
Factories from Woolwich to sites less subject to air attack as given in C.I.D. paper.
208 A dated March, 1935, and also provides for additional capacity.
 It is unnecessary here to stress the fact that in a European war it would be folly to
rely on producing a large proportion of our guns and ammunition, in the present
Arsenal.

(JS) Territorial Army.

11. In paragraph 85 of D.R.C. 14 it was mentioned that a Regular Field Force
consisting of 4 divisions, a Cavalry Division, 2 Air Defence Brigades and a Tank
Brigade with a Royal Air Force contingent of appropriate numbers together
with the necessary complement of G.H.Q. Corps and L. of C. troops, constituted
the approximate minimum which can be despatched to the Continent with any hope
of operating effectively in conjunction with Allies. I am still of this opinion,
although I should like to add that I consider it essential that this force should be
provided with all its essential needs in establishments and reserves and as regards modem
armament and equipment, e.g., tanks, anti-tank weapons, armoured machine gun
carriers, etc.
12. In paragraph 86 of D.R.C. 14, it was mentioned that in 1914 we were in
grave danger of defeat, firstly because of the shortage of artillery ammunition and
secondly because no adequate provision had been made in peace for a properly
organized force to augment the Regular Expeditionary Force within a reasonable
period.
13. The question of artillery ammunition has been dealt with above. As regards
augmenting the Regular Field Force with further contingents, [ have now reached t h e
conclusion that we cannot envisage leaving the small Regular Field Force unsupported
for more than a period of 4 months, and that we must aim at placing the following
contingents of the Territorial Army in the field fully equipped on a modern scale
as follows :—
4 Divisions at 4 months.
4 Divisions at 6 months.
4 Divisions at 8 months.
14. After allowing for the conversion of two Territorial Army Divisions in order
to create additional units for the air defence requirements of Great Britain, there are
12 Divisions remaining for the above purpose.
15. The Territorial Army is in an even less satisfactory state as regards personnel
than the Regular Army and as indicated in Appendix VII energetic measures to­
stimulate recruiting must be taken if the Territorial Army is to be in a condition to
undertake its air defence and home defence duties in addition to supplying contingents
to reinforce our small Regular Army after the outbreak of war.
As regards material both mobilization equipment and war reserves for the
Territorial divisions are virtually non-existent, whilst for training they have to rely
largely on out of date equipment which is not regarded as good enough for the Regular
Force.
16. It is, therefore, in my opinion essential that steps should be taken to provide
adequate training equipment, mobilization equipment and war reserves for the above
contingents of the Territorial Army to allow them to take the field at the periods
shown above and to create a " war potential " to complete equipment and to maintain
these forces in the field. Whilst reliance can be placed on post war production for
producing many of the cheaper and more simple warlike stores, complicated articles
such as tanks, guns, small arms, etc., the manufacture of which is at present limited to
very few firms, take 6 months or more to produce.
It is, therefore, necessary to provide at home in peace time a considerable
proportion of the latter, and it is on this basis that the figures shown in Table (B) (a)
have been produced.
17. In the original Defence Requirements Report (D.R.C. 14) it was proposed
that a sum of £250,000 per annum should be allotted to the Territorial Army to
increase its state of training and efficiency. After careful consideration both of the
training and personnel aspect, I consider that this sum is still required in addition to
the capital sum for material shown in (B) (a) of Appendix I in order to provide
cadres for certain missing units, better training facilities, regular instructors, etc.
I should add that although the figure in (B) (a) of Appendix I is a startling
increase to those previously before the Committee, every possible allowance for the
production of equipment after the outbreak of emergency has been made.
(U061) A 2
 18. The ammunition requirements of the Territorial Army, when they take the
field, have been catered for under the heading (A) (a) " Ammunition Reserves ", and
in this case also it is clearly necessary to hold considerable reserves for the Territorial
Army in time of peace since the production of ammunition, even allowing for all
possible stimulation of industry and the preparation of peace time plans, cannot be
expected to overtake expenditure in war until about the sixth month.

(C) Defended Ports *

19. Item (a) (ii). Singapore Stage II.—This Item includes two 15-inch guns
already approved, three 6-inch batteries, six Defence Electric Lights, and barracks for
an additional infantry battalion. The cost will be £949,000 (see Note 12, Appendix I ) .
This will be required as follows if the defences are to be completed as early as
possible :—
1935-36 ... £77,000^
1936-37 £301,000 j
1937-38... £ 4 7 8 , 0 0 0 ! These figures
1938-39 £93,000 fare approximate.

Total £949,000 J

20. Item (ad) (i). Other Ports east of Suez including Hong Kong.—The bulk of
the capital sum now required is for Hong Kong, which is increased from
£1,200,000 to £1,999,000 as a result of further revision of the rearmament required
within the limitations of the Washington Treaty. The lapse of that Treaty would
entail further increases, and any deterioration of the political situation in the Far East
will require additions to the ammunition reserves at Hong Kong, for which a low
interim scale only has been approved.
21. At the present rate of provision (£200,000 a year) this programme will take
15 years to complete. An increase of £100,000 a year (making £300,000) is recom­
mended in order that the programme may be completed in 10 years. The more
important portion of it would, of course, be finished at a much earlier date. This
increase would entail an acceleration of the rise in annual recurrent cost of personnel,
vide Notes 16 (c) and (d). It is suggested that provision of Anti-Aircraft ammunition
be treated as a separate item (see paragraph 28).
22. Item (aa) (ii). Hong Kong barracks for additional infantry.—This item is
explained in Note 14.
The expenditure will not materialize until a battalion is available.
23. (b) Mediterranean and Cape Route.—This is on a 20-year programme and the
present political situation shows that some acceleration, especially in regard to Malta, is
desirable. Emergency measures taken in connection with the present crisis will
probably enable some acceleration to be made in the approved programme, but some
further allotment is clearly desirable. An addition of £50,000 per annum will suffice.
This will enable the more important items especially at Malta to be completed within
a reasonable period.
24. (c) Home Ports.—Many of these are not of great importance, but the present
allotment is quite insufficient to remedy even urgent requirements. The Naval
situation in Home waters has altered considerably since the original Defence Require­
ments Committee sat. It is considered that a total of £75,000 per annum should be
allotted, i.e., an additional £50,000.
25. (d) Personnel.—The total eventual cost, as stated in Note 16, amounts to
approximately £900,000 per annum. This will be partially offset by the eventual
completion of the modernization programme. In the meantime, an additional
£100,000 per annum is required for personnel to cover Stage I I for Singapore and a
part of the increase to R.A. and R.E. establishments at Home. This will eventually
rise to £148,000 per annum, vide Notes 16 (b) and (e). The present crisis has shown
that the latter increases are urgently required.

* Note.—In this paper no account is taken of the possible establishment of a new Naval Base
at Cyprus.
(D.) Air Defence of Great Britain.
26. (a) General Charges,
and
(b) Reserve Ammunition.
It would be convenient to treat A.A. ammunition as a new and separate item.
This would make about £200,000 per annum of the present D.R.C. allotment available
for equipment instead of ammunition. This is probably as much as could be
economically spent. It is proposed therefore that :—
(a) ammunition be dealt with separately, and
(b) the whole of the balance of the old allotment (including ammunition) be made
available for equipment for A.D.G.B. other than ammunition.
27. The above will furnish the greatest acceleration economically possible in the
next two or three years. At the end of that time it is recommended that the allotment
be further considered. A.very early decision is necessary on Stage I I and Stage I I I of
the A.D.G.B. programme, but in any case, if the above proposals are agreed, no additional
allotment would be required at present.
28. A.A. Ammunition.—The present proposal is to begin a programme to provide
300,000 rounds a year at a cost of approximately £900,000 per annum. The necessary
approval has already been given for a programme of 200,000 rounds a year at a cost of
£600,000. The final requirements are still under consideration by the Committee of
Imperial Defence and will depend on whether or not continuous production is
authorized. The total required for all purposes is likely to be more rather than less
than the 2 J million rounds at present estimated.

Appendix III.
29. Additional infantry battalions.—As the Committee of Imperial Defence are
well aware, the resources of the Regular Army have been strained to the utmost to
furnish the. minimum garrisons required overseas since the late war and, as the
present emergency in the Mediterranean has shown, the lack of a sufficient reserve
there presents serious difficulties in the event of possible trouble in Egypt. In
addition, the garrison of Singapore is short of one battalion, whilst already the
Cardwell system is impaired to the extent of our having to maintain two of the
Home Battalions on short tour in the Mediterranean. The maintenance of two
battalions of Guards in Egypt will also not be possible for an indefinite period.
30. Fully to meet our foreign commitments, therefore, 6 additional infantry
battalions are required abroad with 6 more at home to relieve them. The former
are :—
2 for Malta.
1 for Singapore.
2 to replace 2 short tour battalions abroad.
1 to replace the 2nd Guards Battalion in Egypt.

In the event of the Tientsin Battalion not being withdrawn to Hong Kong, the total
addition of battalions to the British Army would be 14.
31. In view, however, of the present state of recruiting, the raising of so many
new battalions is at present clearly impracticable and for this reason only 4 are shown
T

in Appendix I I I . These 4 are, I consider, urgently required.

Appendix IV.
32. Re-building of Barracks and provision of new Barracks. (Normal Works
Services).—In addition to the deficiencies which impair the Army's readiness for
war and to the heavy expenditure involved in the proposal to move certain portions
of the Royal Arsenal from Woolwich, the Army is confronted with an unusually
heavy programme of urgent works requirements of which, unless normal provision
in Army Estimates is supplemented, a considerable portion must be dispensed
with altogether to the detriment of the serving soldier's comfort and, no doubt, also of
recruiting, whilst the balance would have to be spread over about 25 years. These
services, due to a large extent to financial stringency since the war, although abnormal
in number and in cost, are all of a normal character, (i.e., they do not cover the
provision of accommodation for additional stores, vehicles, ammunition, etc., works
expenditure on which are included in various items in Appendix I), and these should
be carried out in the course of the next 10 years. The programme now in view totals
£16,000,000 as shown in Appendix IV, to which, of course, must be added numerous
minor services arising from day to day.
33. To the total of £16,000,000, if the programme is carried out in full, must be
added £l"9 million for extra staff but normal estimate provision will no doubt
be available to meet part of the cost and it is accordingly calculated that if this
particular programme were dealt with by a " works loan " totalling some £ 1 2 ^ millions,
it could be cleared off during the period 1936 to 1945. This is on the basis of a
normal works loan, repayment of principal and interest falling on army funds. But if
this last condition were waived the amount of the loan required would be approxi­
mately £ 1 0 millions.
I t will be noted that the construction of barracks for new infantry battalions, if
approved, has not been taken into account in this estimate.
34. The possibilities of implementing this programme.—A separate paper has been
prepared (Schedule I V ) dealing with the question of the extent to which the present
deficiencies of the Army could be remedied by the 3 i s t March, 1939, on the assumption
that finance was not a limiting factor.

THE WAR OFFICE,

WHITEHALL, S.W. 1.
October, 1935.
 APPENDIX I TO SCHEDULE It
STATEMENT OF ARMY DEFICIENCIES AND REQUIREMENTS
(Figures of costs should be regarded as provisional only)

(1
(1)) (2)
(2 ) (3)
(3 ) (4) (5)
(5 ) (6))
(6 (7)
(7 )
Allocation
Allocationss
Total
Total capita
capitall su
summ nonow w provisionallyy
provisionall
calculate
calculated d as require
required d Already provided propose
proposedd
Total
Total capita
capitall in Estimates.
with
with,, addition
additionss an
andd altera
altera-­ 1936-37
1936-3 7 on the
sum
su m require
requiredd Remainin
Remainingg
tions
tion s approve
approved d and/o
and/orr basis of Remarks
Remarks..
Item.
Item . as i n origina
originall to complete
complete.. D.R.O.14.
suggested
suggested sinc
sincee origina
originall
D.R.
D.R.C C Report
Report..
D.R.C.. repor
D.R.C reportt (see cover
cover-­ N o t e - These
(D.R.C.
(D.R.C . H. H.)) in
ingg minute
minutess an
andd col
col.. 7 (a) (b) are included
of thi
thiss table)
table).. 1934-35 1935-36 in the totals
shown in col. 5.

(A) Regular Contingent
(1st contingent of Field
Force)—
(a) Military Personnel
Note (1).
(6) (i) Material
(V) (ii) Works, i.e., conver­
sion of stables to
garages, extra garages,
etc.
£ £ £ £ £ £
(1) Rises to between £ I T million and £1-1
million by 1940 according to final decision
regarding rate of mobilization. Does not in­
54,000 180,000 clude additional Infantry Battalions proposed
(Recurrent under Appendix III below (q.v.), nor does it
charge.) include substantial expenditure which may be
necessary for increased vocational training
facilities. (See also Covering Minute paras.
29-31.)
25,910,000 650,000 1,323,000 23,824,000 1,004,000 (2) This sum was shown in the original
Covering minute para. 6 (61 Notes (3), D.R.C. Report as £17,680,000. It then included
14,820,000 (4) and (5). £2,860,000, a figure for ammunition for the 1st
" Note (2) 1 Notes (3), ( 4 ) and ( 5 ) . . . 113,000 350,000 three months. For the sake of clearness this
i sum has now been added to the total under
i (A) (c), col. 2, in order that it may be corn­
pared with (A) (c), col. 3, which gives total
ammunition requirements (including 1st three
months).
(3) Includes equipment and War Reserve of
Regular Field Force, also equipment for train­
ing units.
(4) See Appendix V which gives general
details by groups of items of materials.
(5) Includes an element of £750,000 for
" Works." Does not, however, include £350,000
for barracks for additional infantry battalions
proposed under Appendix III (q.v.). See also
Note (1) above.
 APPENDIX I—continued

STATEMENT OP ARMY DEFICIENCIES AND R E Q U I R E M E N T S - c o n t i n u e d

(Figures of Costs should be regarded as provisional only)-continued

(1) (2) (3) (4) (5) (6) (7)

Allocations
Total capital sum now provisionally
calculated as required Already provided proposed
Total capital with, additions and altera­ in Estimates. "
sum required 1936-37 on the Remarks.
tions approved and/or Remaining basis of
Item. as in original suggested since original to complete. D.B.C. 14.
D.R.O. Report. D.R.C. report (see cover­
(D.R.C. U . ) NOTE.—These
ing minutes and col. 7 (a) 0) are included,
of this table). 1934-35 1935-36 in the totals
shown in col. 5.

(A) Regular Contingent £ £ £

oontd.
(c) Ammunition reserves 10,860,000 36,776.000 743,000 36,033,000 1,100,000 (6) The original estimate for this was,
(for whole Field (i.e., 8,000,000 Note (6) (a). See covering Note (6) (a). £25,000,000 : £17,000,000 was arbitrarily cut
Force i.e, four con­ shown originally minute, para. 9. by original D.R.C. (see para. 92 of their report)
tingents) (including Note (6) plus in the hope that firms could be stimulated in
first three months). £2,860,000 See peace to be able to increase their post-mobiliza- 03
Note (2) above.) tion production. See covering minute, para. 9. o
(6) (a) Includes £1,500,000 for storage accom­
modation.
(rf) Expenditure on indus­ No figure given . 15,805,000 15.805,000 (7) To this should be added £1,560,000
trial mobilization to but item was See covering minute Note (7) (Army share) for the removal of the Royal
produce optimum mentioned in para. 10 and Note (7). Gun Factory from Woolwich which will not
conditions for pro­ D.R.C. Report in itself, however, increase our gun pro­
duction of amnuxni­ paras, 90, 91 and duction.
tion. 107 (ii). (See Appendix II.)
(See Appendix II)

(B) Territorial Army-is-,

2nd, 3rd and 4th Oon­
tingents of Field Force.
(See covering minute
paras. 11-18.) 26,082,000 26.082,000 (8) Ammunition for T.A. Contingents is
(a) Material required in Note (9) Note (9) included under (A) (c) above.
peace time to ensure (9) Includes £1,000,000 for Works (Storage
that T.A. contingents of equipment).
of the Field Force
are equipped for war
by the time they are
required to proceed
overseas. Note (8).
 (6) Annual requirements to 33,000 50,000 (10) This is an annual sum to remedy urgent
improve the efficiency deficiencies. It "was reduced from the original
of the T.A. D.R.C. figure of £250,000 per annum and it is
Note (10). proposed in future years to restore this figure.
The £33,000 under col. 4 (b) has not been
- shown as a credit against total requirements
under (B) (a) (3) and (5) above.

(C) Defended Ports­

(a) (i) Singapore 3,000,000 3,134,000 821,000 868,000 1,445,000 630,000 (11) Excludes expenditure prior to 1934.
Stage 1. Note (11) £3,000,000 originally approved by D.R.C.
Extra £134,000 approved later. \ '
(a) (ii) Singapore... 949,000 77,000 872,000 ... (12) It is proposed to spend £77,000 in 1935
Stage 2. Note (12). from the Sultan of Johore's Gift (War Office
share £400,000). See remarks re personnel
below.
(aa) (i) Other ports East of 2,105,000 2,904,000 124,000 237,000 2,543,000 200,000 (13) The higher figure includes certain
Suez including Note (13) additional defences which are known to be
Hong Kong. essential and others which are still under
examination.
(aa) (ii) Hong Kong . ... 350,000 350,000 (14) Not included in original D.R.C. Report.
Barracks for 6th There is satisfactory accommodation at Hong
Infantry Bn. Kong for 2 battalions. New barracks to replace
(Indian). the present temporary accommodation available
Note (14). for the 3rd and 4th Bns. and new barracks for
5th Bn. are included in normal estimates
though some special financial provision will no
doubt be required (see Appendix IV). The
6th (Indian) Bn., for which accommodation is
included in col. 3, will involve an annual
charge of £78,000 for personnel.
(5) Mediterranean and Cape 2,254,000 . 2,254,000 118,000 106,000 2,030,000 100,000
Routes.

(c) Home Ports 4,156,000 3,360,000 13,000 37,000 3,310,000 25,000

Note (15). (15) D.R.C. figures for Home ports included
A.A. Defence. This has now been shown
under A.D.G.B.-(D) (a). See also Note (17.)
 APPENDIX I—continued

STATEMENT OP A R M Y D E F I C I E N C I E S AND REQUIREMENTS^-coN/mwea'

(Figures of Costs should be regarded as provisional only)-continued

in (?
(?)) (3
(3)) (i) (5)
(5 ) (6
(6)) (7
(7))
Allocations
Allocation s
Tota capitall sum
Totall capita su m now
no w provisionally
provisionall y
calculated as require
calculated required d Already provided proposed
proposed
Tota
Totall capita
capitall
wit
with additionss and
h addition and altera
altera-- in Estimates. 1936-37 on the
1936-37
su
summ require
requiredd tion
tionss approve
approved d and/o
and/orr Remainin
Remainingg
Item
Item.. as in origina
originall basis of Remarks.
Remarks.
suggested
suggested sinc
sincee origina
originall to complete
complete.. D.R.C. 14.
D.R.C.. Report
D.R.C Report.. D.K.C.
D.K.C. repor
reportt (see cover
cover-- N O T E . - These
(D.R.C
(D.R.C.. 14.)
14.) ingg minute
in minutess and
and col.
col. 7 (a) (b) are included
of thi table)..
thiss table) 1934-35 1935-36 in the totals
shown in col. 5.

(C) Pefende4Ports-oontd. £ £ £ £ £ £­
(d) Military personnel 350,000 (16) (a) Rises to £520,000 in 1 9 3 8 - a per­
Note (16) (a)-(e). manent annual figure on present scheme.
(5) A further £28,000 per annum will be
necessary in event of adoption of Stage II of
Singapore.
(c) Ultimate additional annual cost of pro­
posals under examination for Hong Kong (see
Notes (13) and (14) above), £160,000.
(d) If Higher Colonial Establishment is
approved for Hong Kong there will be an
annual addition of £80,000.
(e) Necessary increases to R.A. and R.E.
establishments at Home in order to provide
reinforcements for ports abroad and to improve
217,000 the position as regards drafting and reserves
60,000
will eventually cost about £ 120,000 per annum.
i ' ( / ) Figures under (16) (6), (c), (d) and (e) are
ultimate and will not be reached immediately.
(D) A.D.G.B­
(a) General charges (e.g., 1,730,000 2,526,000 490,000 (17) (a) To include A.A. defence of Home ports
material, equipment, Note (17) (a) this was increased to £2,526,000-^see Note 15.
ammunition, person­ (&) Addition only includes certain ports.
nel and accpmmodar 640,000 Owing to increased range of aircraft, provision
tion). Note (17) (b) for Tyno and Tees (£440,000) and for Rosyth.

67,000 155,000
 Note (17)(a)-(c). 13,614,000 (£200,000) is now included. The annual cost
including for personnel involved is £25,000 and £15,000.
5,500,000 ammuni- (c) Brooke-Popham Committee—approved in
Note (17) (c) tion. principle—increases (D) (a) and, (b) by £5^
million with ultimate annual charge of
£1,000.000 on total scheme.
(b) Reserve ammunition. 5,500,000 100,000 (d) Estimates of ammunition expenditure
Note (17) (d). have had to be drastically revised in vievv of the
probable greatly increased scale of attack.

Totals Remarks.

1. Capital: £
(a) As in original D.R.G. Report 39,425,000
(D.R.C. 14).
(b) Revised in accordance with present 131,690,000
deficiencies and requirements.
(c) Spent (including passed in current 5,752.000 (18) Total spent or passed to date including
Estimates) excluding personnel. Note (18) personnel (£331,000) and T.A. (£33,000)
Note (18). ^6,116,000.
(d) Proposed for Estimates 1936-7, but, 4,049,000 (19) In addition £530,000 is included for personnel.
included in (e) below as not yet Note (19)
passed, excluding personnel
(e) Remaining to complete 125.938,000 (20) This total includes the £4,049,000 proposed for
Note (20) 1936-7 shown in (d).

2. Military personnel : ultimate recurrent

annual expenditure :
(a) As in original D.R.C. Report 1,529,000 (21) Field Force £877,000.
(D.R.C. 14). Note (21) Coast Defence £652,000.
(b) Now (revised estimate for (a) above, 1,620,000 (22) According to rate of mobilization (i.e.,
excluding any fresh additions in or Field Force £1,100.000 or £1,500,000.
(c) below). 2,020,000 Coast Defence £520,000). (Note (16) (a).)
Note (22)
(c) Now, including new proposals 2,008,000 (23) According to rate of mobilization.
or (24) Addition to the above o f ­
2,408,000 £
Notes (23) 28,000 See Note (16) (&)
and (24). 160,000 ,, (16) (c) I Total £388 000
80,000 ,, (16) id) r i o m

120,000 ,, (16) (e)

plus the cost of any new Infantry battalions

that may be raised.
 A P P E N D I X I I TO S C H E D U L E I I
I N D U S T R I A L MOBILIZATION, INCLUDING REMOVAL OF WOOLWICH A R S E N A L
A N D A N E X P A N S I O N OF ITS P R E S E N T CAPACITY

(i) Factories: £
(Army share only)
Cordite. N e w Factory 4,200,000
T.N.T. New Factory ... ... 2,200,000
Tetryl. New Factory ... 180,000
Filling Factories... ... ... ... ... 3,000,000
Birtley. Cartridge Cases ... ., 300,000

Total (i)... ... 9,880,000

(ii) Industrial Mobilization :

Plant for Shell Components 4,500,000
Plant for Forging 500,000
Plant for Explosives ... 775,000
Tyre Presses, etc. ... 150,000

Total (ii) 5,925,000

Total (i) and (ii) £15,805,000

(iii) In addition—
Removal of Royal Gun Factory, Woolwich, to Glasgow district or
elsewhere.
This is necessary for strategic reasons and will not increase
production in peace time.
Total cost £2,600,000
Army share £1,560,000

A P P E N D I X I I I TO S C H E D U L E I I
A D D I T I O N A L BATTALIONS

(See Covering Minute paras. 29-31)

Works
Four Battalions. Recurring charge for personnel Capital cost, barracks for
(ultimate figure) £420,000. two battalions, at home.
£350,000

A P P E N D I X IV TO S C H E D U L E I I
RE-BUILDING OF BARRACKS A N D PROVISION OF N E W BARRACKS
(NORMAL WORKS SERVICES)
£
(1) Re-building of existing hutted accommodation in permanent construction ... 7,300,000
(2) Provision of new barracks at Hong Kong and in Egypt ... ... ... ... 2,115,000
(3) Complete replacement of old and out of date barracks ... ... ... ... 4,000,000
(4) Improvement of other old and out of date accommodation ... ... ... 750,000
(5) Increased facilities for Army Vocational Training... ... ... ... ... 335,000
(6) Miscellaneous items ... 1,500,000

Total £16,000,000
 A P P E N D I X V TO S C H E D U L E I I

S U B D I V I S I O N OF MATERIAL A N D AMMUNITION (EXCLUDING ARTILLERY

AMMUNITION) INTO GROUPS OF ITEMS

(1) Artillery equipments (guns), mobile and fixed, for Air defence, with
instruments and platforms. Fixed defence equipments. Also Anti-gas £
equipment ... ... ... ... 570,000
(2) Mobile Artillery equipments (guns and carriages) for Field and Medium
Artillery Brigades with certain instruments. 3-inch Mortars and Anti­
tank guns for Infantry ... ... ... ... ... ... ... 1,934,000
(3) Small arms including Vickers and Bren guns and Anti-tank rifles.
Grenades and fireworks. S.A.A. Telescopes and glasses ... ... ... 2,074,000
(4) Tanks, dragons, arinoored machine gun carriers with all tracked vehicles also
armoured cars ... ... 12,525,000
(5) All wheeled vehicles other than those belonging to R.A.S.C. units ... ; ... 3,440,000
(6) Clothing and personal equipment. Harness and small stores including
£50,000 for medical stores 636,000
(7) R.E. equipment (including Bridging equipment and Searchlights). Signal
equipment including Cable and Wireless ... ... ... ... ... 1,328,000
(8) - Wheeled vehicles for R.A.S.C. units, including Ambulances ... ... ... 567,000
(9) Works (Note 5 of Appendix I) .750,000

Total 23,824,000

A P P E N D I X VI TO S C H E D U L E I I

N O T E BY T H E C H I E F OF T H E I M P E R I A L GENERAL S T A F F ON T H E PROVISION
OF N E W FIELD ARTILLERY EQUIPMENT FOR T H E ARMY

1. For many years now the question of replacing the present field artillery equipment of the
Army has been the subject of theoretical study, and practical trials have recently taken place with
a view to establishing the most suitable weight of shell for a new universal equipment in the event
of the latter's introduction becoming a practicable proposition.
It has for years been admitted that the present field artillery weapons do not meet the require­
tnents of modern warfare, but the funds provisionally allotted under the existing D..R.C. proposals
were insufficient to admit of the inclusion of a re-equipment programme.
2. The field artillery of the Army is at present equipped with the 18-pr. field gun and the
4 5 - i n c h howitzer. These weapons are in general design both over 30 years old.
-

The carriage of neither is intended for mechanized draught, although, by means of rubber pads
and other expedients, a certain number have been made capable, to a limited extent, of standing the
strain of traction up to a speed of 12 rn.p.h. at the most.
The ranges of the 18-pr. gun, and particularly of the 4-5-inch howitzer, are quite inadequate
for modern warfare. For example, the new German field howitzer has, I understand, a maximum
range of over 12,000 yards as compared with the 6,600 yards of 4" 5-inch howitzer.
If the introduction of a new field artillery equipment for the army were approved, it would be
possible to produce a " gun-howitzer "—i.e., a weapon which would replace both the 18-pr. and the
4* 5-inch howitzer—an immense advantage from the point of view of ammunition manufacture and
supply, as well as of tactical handling in the field.
The existing 18-pr. piece ( 3 3-inch bore) can be bored out and fitted with a loose liner of
-

3'45-inch bore—a suitable calibre for the proposed n e w weapon. A battery of four guns of this
type will shortly be under manufacture, and it is hoped to hold trials next Spring.
The weight of the shell will be 25 lb. w i t h a maximum range of 12,000 yards, with good
accuracy.
3. The existing stocks of 4 5-inch and 18-pr. ammunition amount to 630,000 rounds and
-

1-J million rounds, respectively.

In the event of an emergency arising before the proposed conversion programme has provided
equipment and ammunition for the first contingent, this ammunition would provide for that
contingent as follows :—
Equipment ammunition.
Base reserve.
Expenditure for 2-j months—18-pr.
Expenditure for 2 months—4' 5-inch howitzer.

During the early conversion period (i.e., during the first two years of the programme) it is
hoped that the equipment of the first contingent, and a portion of the ammunition for that
contingent will be in stock.
 As shown in Schedule IV, it would be impossible, in any case, to provide the ammunition
required for the second contingent in less than four years. It is therefore considered that the adoption
of a new weapon would not materially jeopardise pur preparedness for war, which, in any case,,
cannot be fully achieved in less than five years.
At the present moment there are available 1,414 (18-pr.) equipments suitable for conversion.
In addition we hold 741 4" 5-inch howitzers and 484 early marks of 18-prs. which would
eventually be scrapped after being utilized in an emergency for training purposes.
4. The total numbers of converted and n e w equipments required for mobilization equipment,,
and replacing war wastage until post-war manufacture can overtake it, would be—
(i) For 1st Contingent and including peace equipment for T.A. ... 738 + 1008 or 1746
(ii) For 2nd, 3rd and 4th Contingents (i.e., mobilization equipment and wastage) ... 936
The cost under (i) for conversion, new manufacture and pro­
viding two ammunition trailers per equipment would be--Total ... £2,479,800
The cost under (ii), which will entail all new manufacture,
would be approximately ... £2,652,700

5. Subject to the trials early nex.t year proving successful, and it being possible to go
immediately to production, it is estimated that we should be able to obtain from Vickers and the
Royal Ordnance Factories some 500 converted equipments in two years under present conditions.
This suffices for equipping the 1st Contingent, without wastage.
Two more years would—under the improved conditions created by the above—probably suffice
for the 2nd and 3rd Contingents, and one additional year, under still improving conditions, for the­
4th Contingent—making a total of 5 years for the complete re-equipment.
If, however an extensive programme for the re-equipment of the Army is adopted, and the
general -procedure and conditions outlined in Schedule IV are accepted, the total re-equip­
ment programme should be shortened considerably—and the "danger" period mentioned in
paragraph 3, correspondingly reduced.

Ammunition
6. The 18-pr. and the 4 5 - i n c h howitzer ammunition as mentioned in paragraph 3, will not be
- -

wasted, because as soon as our conversion programme nears completion, some of this ammunition
can be used for practice in peace and for training post-war recruits, and the remainder can be
converted for manufacture of the new type, the "conversion v a l u e " of the remainder being^
about £1,000,000.
7. To sum up, the total cost of providing converted and new artillery equipment would be :—
£
(a) For the 1st Contingent 1.216,500
(b) For the 2nd, 3rd and 4th Contingents 3,916,000
Total ... 5,132,500

From this must be deducted that portion of the figures included in ( A ) (b) and (B) (a) of
Appendix I, Field Artillery Equipment, v i z . : - £ 1 , 8 3 5 , 0 0 0 , leaving a net increase of £3,297,500.
The total cost of 25-pr. ammunition which it is considered must be held in peace time for all
four contingents will amount to £19,754,272, less £1,000,000 realized in aid from existing stocks
(See paragraph 6 above.)
From this must be deducted the figure for 18-pr. and 4-5-inch ammunition included in (A) (c\
in Appendix I, viz. : - £ 1 3 , 1 2 2 , 0 0 0 , leaving a net increase of £5,632,272.
The net addition to the D.R.C. programme contained in the above quoted paper for guns and
ammunition will therefore be approximately £8,930,000.

Note by the Master-General of the Ordnance

8. Three factors of the first importance will affect our prospects of realizing the forecasts of the
paper:—
(a) The length in time of the programme.
(b) The amount given us in money. ­ ;

(c) The productive capacity of firms, taking into consideration the demands of other services
9. The last of these three factors troubles me a good deal because we may be certain that
demands will be heavy, and we already have probable extensive commitments in anti-tank and
anti-aircraft equipments and the question of priority as between the Services is bound to arise.
10. The point I wish to make is this, that until our general programme is defined, para. 1 (a)
and (&), and the priority question, para. (1) (c), is much clearer, it is impossible to say how long the
the period will be when we shall be forcedly in the position of having 3 equipments instead of 2.
We have to get worse before we can be better, and we are faced with a very difficult calculation
of the date on which we should stop the production of 18-pr. and 4'5-inch ammunition and that
depends—
(a) on the rate at which we can build up a reserve of 25-pr. ammunition on which we have a
leeway of some 2 million rounds to make up ; and
(6) on the rate at which equipments can be converted pari passu.
 A P P E N D I X V I I TO S C H E D U L E I I

T H E PERSONNEL SITUATION A N D T H E PROBLEM OP RECRUITING

1. Personnel are required on mobilization for three r61es—
(a) To bring units from peace to war establishments.
(6) To provide the staff for training units for the production of post-mobilization soldiers,
(c) To meet wastage between the time that units go overseas, and post-mobilization soldiers
are ready.
2. Regular Army.—War establishments of the first contingent of the Field Force amount to
155,000. Staffs for training units, instructors for the Territorial Army and the many establishments
that have to be maintained at home during war-time total 45,000. These liabilities (a) and (b) can
just be met by the regular army, its reserve and the supplementary reserve. The total of these will
be, it is estimated, in 1939, 204,000. The third (c), a very important one, is estimated at 62,000, to
meet which there are now only available 4,000 trained men and 12,000 maturing recruits. This
shows a total deficit of 46,000.
3. Territorial Army.—Assuming that three contingents of four divisions each embark at 4,
-6 and 8 months respectively after mobilization, figures corresponding to those of the regular
army are :—
(a) Second Contingent (at &th month)—
Requirements—
War Establishments 116,000
Training units and cadre for 2nd line units ... ... ... ... ... 17,000
Wastage 6,000

139,000
Available net strength of 4 strongest divisions taking their actual strengths
today 33,000

Deficit 106,000

(b) 3rd and ith Contingents (at 6th and 8th month).—The requirements are approximately the
same as fox the earlier contingent, but the corresponding assets are approximately
only 31,000 and 24,000 respectively, as the actual strengths of the next eight divisions
are considerably lower.
(c) For coast defence and air defence the anticipated requirements are 12,000 and 43,000 against
which there actually only exist 5,000 and 12,000 respectively.
(d) The total deficit in the three T.A. Contingents, A.D.G.B. and Coast Defence is approximately
318,000. This does not include any men required for Air raid precautions and the
guarding of vulnerable points.
Of the total deficit of 318,000, those required to complete the 2nd Contingent (106,000) and those
required to complete Coast and Air Defence Units (38,000) (Total 144,000) must be available in peace,
whilst the balance, 174,000, must be enlisted immediately at mobilization.
There is at present no T.A. reserve.
4. The causes of these deficieuces on mobilization are-—
(a) The " liability " of the large wastage rates that must be accepted for a European war and
for which no long term provision has hitherto been made.
( 5 ) The present deficit of recruits to fill peace establishments.
It is estimated that ia 1939, at the present rate of recruiting, the Regular Army will be over
15,000 short while the Territorial Army is now not only 42,000 short of its peace establishments,
but these establishments are much too low at present to make it possible to expand to war
requirements within the necessary time.
5. To remedy these deficiencies the Army Council are taking steps to encourage recruiting and
improve the soldier's position but it is felt that a national effort must be made to revive recruiting,
both in the regular and Territorial Armies. The Peace establishments of Territorial units will
obviously have to be raised and units now non-existent will have to be created but until present
establishments are filled it is little use attempting to estimate the cost involved.
 A P P E N D I X V I I I TO S C H E D U L E I I

G R A N D TOTAL R E Q U I R E D (CAPITAL SUMS ONLY)

£
(1) D.R.C. items (including Industrial Mobilization) 131,690,000
(2) Works (Barrack Loan) ... ... ... . 10,000,000
(3) Barracks for 2 additional Infantry Battalions ... ... ... ... ... 350,000
(4) Removal of Royal Gun Factory from Woolwich (Army share) not included
in (1) above (see Appendix II) ... 1,560,000
(5) Extra cost of new Field Artillery equipment ... ... 8,930,000

152,530,000
Less provision already passed in Estimates ... ... ... ... 5,752,000

Net Total required ... £146,778,000,

(B35/203) 300 11/35 W.O.P. 9061

 S C H E D U L E I I I TO D.R.C. 37.

Royal A i r Force Requirements.

Memorandum by the Chief of the Air Staff.

1. T H E Sub-Committee on Defence Policy and Requirements a t i t s

2nd Meeting (the 8th July, 1935) decided to remit to the Defence Requirements
Committee the following Terms of Reference :—
" To re-examine, in the light of the situation set forth in P a p e r
No. D.P.R. 6, and w i t h special reference to financial co-ordination, the
programmes of the Nawy, A r m y a n d A i r Force, a n d to make recommendations
for the f u t u r e . "
Paper No. D . P . R . 6 set out the chief changes in the situation since the date
(the 28th February, 1934) of the original Report of the Defence Requirements
Committee (D.R.C. 14), and pointed out that, in order to place our defences and
defence forces on a sound footing, it will be necessary (a) to make good the
deficiencies t h a t have accumulated in recent years, and (b) to provide programmes
to meet expansion of the forces of Germany and J a p a n . The Defence Require­
ments Committee accordingly (13th Meeting, the 11th J u l y , 1935) asked the
Chiefs of Staff to p r e p a r e programmes f o r meeting the existing deficiencies in
their respective Services. The present Memorandum relates to the deficiencies
in the A i r Force. . ­
2. The recently approved increases for Home Defence still leave notable
deficiencies, of which the most i m p o r t a n t is the inadequate provision for w a r
reserves. Measures are also necessary to strengthen the a i r forces overseas, and
in p a r t i c u l a r those required to meet the possibility of w a r w i t h J a p a n in the F a r
East.
3. The deficiencies reviewed in the present p a p e r include several items
covered by the recommendations from the original R e p o r t of the Defence R e q u i r e ­
ments Committee (D.R.C. 14), but which for financial reasons were excluded from
the five-year programme recommended by the Ministerial Committee. The
reasons for m a k i n g good these p a r t i c u l a r deficiencies have now become more
urgent, and the measures necessary for this purpose are included in the new
proposals.

WAR RESERVES.
4. The approved programme of expansion, which is designed to increase
our Metropolitan first-line strength to a total of 123 squadrons by A p r i l 1937.
should be adequate to meet an expansion of German first-line air strength to a
total not in excess of 1,500 aircraft, and should also constitute a strong deterrent
to aggressive action by Germany or by any other potential enemy in Europe. T h e
possession of first-line strength alone does not, however, of itself ensure security.
5. I n air w a r f a r e , particularly in Europe, the clash will be immediate,
intensive and sustained; losses in personnel and material will be heavy; the
expenditure of armament stores and fuel supplies will be continuous and on a
large scale. Unless this wastage is continually replaced, our air forces will be
rapidly reduced in strength, a n d in a very short time will become impotent either
to defend this country against air attack or to undertake offensive operations
against the enemy.
6. I t is most unlikely t h a t the peace time productive capacity of o u r
industry, however highly organised, will be adequate at the outset of hostilities
to meet these requirements, and a period of several months will elapse before full
[12270-1] F
 war production will be possible. To bridge this g a p , it is necessary to maintain
in peace sufficient reserves of all kinds to enable our squadrons to sustain their
operational effort, under all probable conditions, u n t i l new production has reached
the required level. This is a matter to which attention is being given by the
P r i n c i p a l Supply Officers Sub-Committee, b u t examination of the problem, as so
far carried out, indicates t h a t the w a r time o u t p u t of new m a t e r i a l could not be
equal to war wastage until at least 6 months from the outbreak of war, and then
only on the assumption t h a t all practicable measures had been adopted in peace for
accelerating output at the earliest moment after the outbreak of war. On that
basis it is estimated t h a t an expenditure of approximately £50,000,000 will
be required to provide w a r reserves of a i r c r a f t and other equipment sufficient to
m a i n t a i n the A i r Force in a Home Defence W a r u p to the time when wastage
can be made good by w a r time production. Details of this amount are shown in
A p p e n d i x A. The production by the end of 1938-39 of the requisite number of
aircraft, & c , is almost certainly beyond the capacity of the firms at present
employed by the A i r Ministry, a n d would probably entail bringing in new sources
of production. I t is in any case certain t h a t special measures will be necessary to
increase the factory output of bombs. F u r t h e r expenditure, provisionally
estimated a t £8,000,000, will be required on special equipment (jigs, gauges, tools
a n d machinery) and raw m a t e r i a l if we are to ensure t h a t there will be no delay
in p u t t i n g into operation the plans for increasing the o u t p u t of the aircraft
i n d u s t r y on the outbreak of war. I t may be observed t h a t reserve stocks could
be more easily protected against enemy air attacks t h a n would many industrial
establishments, and for t h a t reason it would be unwise to rely over much upon the
acceleration of w a r production as compared with t h e holding of actual reserves.
I n particular, d u r i n g the opening phases of a war w i t h a Power w i t h i n air range
of this country,' industrial establishments cannot be assured of undisturbed
w o r k i n g conditions.

7. The difficulty of making financial provision of this m a g n i t u d e is obvious,

p a r t i c u l a r l y as the Navy and A r m y also have serious accumulated deficiencies in
their w a r reserves. Nevertheless, in the existing situation, the first-line strength
of our air forces will be no more t h a n a deterrent gesture to other Powers, and
they will be unable to support any sustained operations. This is a factor of first
importance in relation to air warfare, which, once started, affords us no fencing
for time or refusal of battle. No considerations of space or topography can be
exploited towards postponing a decision and no sheltering behind covering forces
can be resorted to whilst the m a i n effort is being prepared, unless a n offensive
comparable in effect to t h a t achieved by the enemy can be prosecuted and
sustained from the outset.
8. This factor is recognised in the I n t e r i m Report of the Ministerial
Committee on Disarmament ( C P . 193 (34), J u l y 1934) : —
' ' Considered from the point of view of the deterrent effect on Germany
as a potential aggressor, a n d from t h a t of public opinion in this country,
there is much to be said for the formation of as large a number of squadrons
as possible On the other hand, there are obvious risks in the plan of
:
p u t t i n g all our wares in the shop window ' if pressed too far The
reserve must be provided before an outbreak of w a r becomes imminent. . . . .
On balance, we have come to the conclusion that in the present circum­
stances we should, in the main, concentrate on an expansion of the Home
Defence Force' in the early years. D u r i n g this first stage we should make
some provision for w a r requirements, the bulk of which, however, will have
to be deferred to a later stage unless some changes in the situation necessitates
a speeding up. I t is t r u e t h a t this will not give us an A i r Force capable of
sustained warfare within the five-year period contemplated by the Defence
Requirements Committee."
9. The alloAvance in C P . 193 (34) of only £1,200,000 for reserves in the
period 1934-38 was based on the assumption t h a t the Royal A i r Force was
n o t required to be ready for w a r before 1942. The Terms of Reference for
the present enquiry, however, have advanced this date to the end of the financial
year 1938-39. Recent and reliable information, moreover, indicates t h a t German
p r e p a r a t i o n s are designed not only to a t t a i n a considerable first-line a i r strength
in the near future, but also to provide t h e i r air force w i t h the means of under­
taking sustained operations in war. Intensive efforts are being made so to
develop the German a i r c r a f t industry t h a t it will be capable of immediate
expansion to meet w a r . w a s t a g e ; an organisation is being set u p w i t h the object
of creating a large reserve of t r a i n e d pilots; and there are definite indications
that Germany intends, if possible, to accumulate a year's reserve of aviation
spirit. I n p a r a g r a p h 3 (14) of the new Terms of Reference it is stated—
" W e feel bound to mention, in this connection, t h a t reliable evidence is
available t h a t Germany is raising—outside the Budget—enormous sums by
internal borrowing, and t h a t there is no doubt t h a t most of this money is
for r e - a r m a m e n t . "
I n these circumstances it appears t h a t t h e scale a n d rate of provision
of Avar reserves for the Royal A i r Force should now be determined. I strongly
recommend, therefore, t h a t a programme for the allotment of such funds as c a n
be made available for this purpose d u r i n g the next few years be approved as soon
as possible in order t h a t administrative plans and p r e p a r a t i o n s may be under­
taken.

Enlargement of Reserve of Pilots.

10. I n addition to w a r reserves of aircraft, a substantial enlargement of the
reserve of pilots will be necessary. If the date of readiness for w a r is to be
taken as the end of 1938-39, the only practical method of increasing t h a t reserve
is by a larger entry t h a n at present of persons who could be t r a i n e d in flying
ab initio for Reserve Service only. As d u r i n g the next four years the number of
first-line units is being so largely increased, it is not possible in t h a t period t o
accelerate the flow of Short Service Officers to the Reserve.
Broadly speaking, the figures of personnel corresponding to the proposed
provision of w a r reserves of a i r c r a f t would mean a further entry to the Royal
Air Force Reserve of 600 pilots a year for the next three years, these being'
additional to the r a t e of entry of 200 a year to which we are now working. The
increased number would involve an a d d i t i o n a l expenditure of a p p r o x i m a t e l y
£350,000 a year for the next three years, and recurring expenditure of £200,000
annually thereafter to m a i n t a i n the Reserve of direct e n t r a n t s .

THE FAR EAST.

Hong Kong.
11. The Chiefs of Staff Sub-Committee (C.O.S. 344 ( J . P . ) ) recommended a
minimum of four squadrons to be kept permanently at H o n g Kong for the defence
of the port against J a p a n e s e attack. The Defence Requirements R e p o r t
(D.R.C. 14, February 1934) recommended t h a t these squadrons should be provided
with an additional aerodrome and a r e p a i r depot for their accommodation a n d
maintenance. For financial reasons, however, the Cabinet decided, on the advice
of the Ministerial Committee on Defence Requirements, t h a t only one squadron
for H o n g Kong could be included in the 1934-39 programme. U n d e r present
arrangements this squadron will be provided in the financial year 1938-39.
12. I n view of this restricted provision the Chiefs of Staff Sub-Committee,
in a later report to the Committee of I m p e r i a l Defence, October 1934
( O L D . 399-C), stressed t h e need for facilities to enable a i r reinforcements to
be sent to H o n g K o n g i n a n emergency, a n d recommended the extension of a i r
route facilities via B u r m a h and via N o r t h Borneo, as well as the provision of a
second aerodrome at H o n g Kong itself. They also stated " t h a t the question of
increasing permanently t h e air garrison a n d facilities, over and above the one
squadron, should be kept under constant review."
13. A site for the second aerodrome has now been selected, and considera­
tion is being given to improving the existing aerodrome a t K a i T a k and to
increasing air facilities generally. A number of landing grounds in North
Borneo are also being provided, and suitable sites are being sought for landing­
grounds in E a s t e r n B u r m a h . But it must be realised t h a t even the provision
of full facilities for the air reinforcement of Hong Kong will not ensure its
[12270-1] F 2
 defence in an emergency. A n y squadrons in I r a q and I n d i a potentially
available for reinforcement purposes are already earmarked for Singapore, and
constitute p a r t of the minimum requirements necessary for the security of that
base in w a r (C.I.D. 394-C). The only other source of reinforcements is the
U n i t e d Kingdom, and they could not arrive at H o n g Kong in time to secure it
a g a i n s t the scale of attack which J a p a n could bring to bear.
14. Three additional regular squadrons should therefore be provided to
make u p the total of four recommended as the minimum requirement for Hong
Kong, together w i t h the necessary aerodrome and maintenance facilities. The
J o i n t P l a n n i n g Sub-Committee previously recommended (C.O.S. 3 4 1 - J . P . ) that
two squadrons should be provided for defence purposes in the first instance,
followed by a t h i r d squadron for defence purposes and, finally, by a squadron
for oversea reconnaissance. Of these, one squadron has already been authorised.
T h a t Sub-Committee also stated t h a t the need for aircraft for spotting purposes
must be borne in mind, and t h a t these might be provided, as at Singapore, by an
a u x i l i a r y flight raised locally. The proposals for the provision of additional
air forces at H o n g Kong can therefore be summarised as follows : ­
1 Torpedo Bomber Squadron.
1 L i g h t Bomber Squadron.
1 Reconnaissance L a n d p l a n e Squadron.
1 Auxiliary Spotter Flight.
1 R e p a i r Depot.
1 Aerodrome.

Singapore.
15. The scale of air defence recommended for Singapore (C.I.D. 394-C)
(Revise) amounts to nine squadrons and one auxiliary flight. Of these, three
squadrons are already stationed there, and one squadron at home is due to proceed
to Singapore this autumn, b u t has been temporarily diverted to A l e x a n d r i a
in connection w i t h the Abyssinian emergency. A fifth squadron has been
approved for formation in 1937-38. The A u x i l i a r y flight, which is required for
spotting duties in connection w i t h the fixed gun defences, is being formed locally,
and should be available early in 1936. The remaining four squadrons are t o be
supplied by I r a q and I n d i a as reinforcements in an emergency.
16. Of the five squadrons to be located permanently a t Singapore, three are
to be equipped w i t h bomber type aircraft for offensive action against the
a t t a c k i n g force, and two are for reconnaissance duties.
17. Since the scale of air defence mentioned in p a r a g r a p h 15 above was
approved, the reconnaissance problem has been examined in greater detail. I t
has been concluded t h a t a minimum of 28 reconnaissance aircraft a r e required
if the sea approaches to Singapore are to be adequately covered in war. The
present programme will provide only 8 flying boats for this purpose by 1936,
a n d even when one squadron of flying boats is re-equipped w i t h reconnaissance
landplanes, the total aircraft will not exceed 16. The provision of a second
reconnaissance landplane squadron of 12 aircraft is therefore a m a t t e r of urgency.
18. The addition of this e x t r a squadron to the a i r forces permanently
located a t Singapore will involve additional aerodrome accommodation. The
present authorised programme, when completed, will necessitate the accommoda­
tion in w a r of three squadrons at each of the three Service aerodromes, the
auxiliary spotter flight being located at the civil aerodrome. This will involve
a dangerous degree of congestion, and will allow of no dispersion or depth in
the air defence of the base. Moreover, on the arrival of the main fleet at
Singapore, shore-base facilities will have to be provided for a large proportion of
t h e carrier-borne air units if their efficiency is not to suffer. U n d e r the present
programme, these facilities could not be provided even w i t h full use of the civil
aerodrome, and two more operational landing grounds are required as a minimum.
19. Approval should therefore be given to additional provision at Singapore
for (i) 1 L a n d p l a n e reconnaissance squadron, (ii) two additional landing grounds.
The p a r a m o u n t importance of the security of Singapore in connection with the
defence, of our territories and interests in the F a r East, and the fact t h a t the
situation w i t h r e g a r d to the J a p a n e s e menace remains unchanged except in so f a r
as it has been complicated by the growing menace from Germany, together justify
a high degree of priority for these requirements.

The Route to the Far East.

20. The R e p o r t of the Defence Requirements Committee (D.R.C. 14)
recommended the provision of one squadron each at P e n a n g , Ceylon, and Aden,
in that order of priority, by 1940. But although the need for these squadrons
was recognised, the more pressing requirements of Home Defence at t h a t time
made it impossible to include them in t h e 1934-39 programme. A s a result, the
Chiefs of Staff Sub-Committee recommended (C.I.D. 399-C) t h a t facilities should
be arranged for at the ports in question to enable aircraft to be sent there in
emergency. T h e source of such reinforcements was not, however, specified.
21. Four squadrons from I r a q a n d I n d i a are already earmarked for the
reinforcement of Singapore. There can be no certainty t h a t in a time of
emergency local conditions in those countries will enable additional squadrons
to be spared for employment. Moreover, the type of squadron best suited for the
defence of ports and sea routes is one t r a i n e d a n d equipped for long flights over
the sea. W i t h the exception of one flying-boat squadron normally located in
the P e r s i a n Gulf no such squadrons are available outside the U n i t e d Kingdom
for strategic reinforcement purposes, and this squadron has already an allotted
role in our F a r E a s t e r n defence plans.
22. I t is very desirable, therefore, t h a t appropriately equipped squadrons,
as originally recommended by the Defence Requirements Committee for P e n a n g ,
Ceylon, and Aden, should be provided as scon as the requirements at Singapore
have been met.

General Considerations regarding the Far East.

23. Although a nucleus of the I m p e r i a l air route to the F a r E a s t has been
established, and the provision of subsidiary a i r facilities is in h a n d in the areas
served by t h a t route, there is at present no strategic reserve of a i r forces anywhere
outside the U n i t e d Kingdom. T h e local commitments of the air forces stationed
permanently overseas preclude any g u a r a n t e e t h a t inter-command reinforcement
will be immediately possible in a n emergency. Nevertheless, in the event of w a r
with J a p a n , the requirements outlined in the preceding p a r a g r a p h s will be of
vital importance from the outset. The provision of additional squadrons in the
Middle E a s t or A f r i c a as proposed in p a r a g r a p h s 24 and 27 below would ease the
situation, and form the nucleus of a conveniently situated air reserve. Again,
squadrons from the a i r forces of the Dominions of A u s t r a l i a a n d New Zealand
may provide reinforcements at some future date. I n the meanwhile, if we a r e
to achieve a minimum degree of security vis-a-vis J a p a n d u r i n g the danger
period of the next few years, the additional squadrons recommended for Singa­
pore, for ports on the route to the F a r E a s t and for H o n g Kong, will have to
be provided.

AFRICA.
The Middle East.
24. I n addition to the provision of W a r Reserves and to the improvement of
our position in the F a r East, deficiencies exist in the Middle E a s t and elsewhere
in Africa. The addition of an extra squadron in the Middle E a s t Command
would assist in the reinforcement of any.threatened point on either the A u s t r a l i a n
or South African air route.
25. The six squadrons already stationed in the Middle E a s t Command have^
important commitments in Egypt,' the Sudan, Palestine and T r a n s Jordan, a n d
contingently, in I r a q and Cyprus. One of these squadrons is also earmarked
to reinforce I n d i a , a n d it is doubtful whether any others could be spared to
proceed further E a s t or to other p a r t s of A f r i c a without weakening our air.
strength in this i m p o r t a n t area.
 26. I t is strongly recommended, therefore, t h a t at least one more squadron
should be included for the M i d d l e E a s t Command in any new programme designed
to strengthen our defensive position overseas.

East Africa.
27. A squadron in our E a s t African territories would be a valuable addition
to our resources for I m p e r i a l defence, and its concomitant aerodrome facilities
would be a useful strategic link between the squadrons in the Middle E a s t and
the air forces of South Africa. The squadron would serve not only for local
defence purposes, but also as a further contribution to a strategic air reserve.
28. I t is noteworthy t h a t I t a l y has recently concentrated large air forces in
her A f r i c a n Colonies, which are certain to be maintained there. I t is important
t h a t the strategic sea route to the F a r E a s t should be secure against possible inter ­
ference in any contingency ( a p a r t from considerations of local prestige). A
squadron located i n E a s t A f r i c a would be a g r e a t advantage from these points of
view, and its provision would be in accordance with the accepted axiom t h a t our
defence p r e p a r a t i o n s should not fall so far behind as to be incapable of meeting
possible changes in the internal situation.*
29. A proposal is already under consideration which, if eventually approved,
would ensure t h a t the r e c u r r i n g costs of m a i n t a i n i n g such a squadron would be
borne by the E a s t A f r i c a n Colonies themselves, the initial cost of provision being
the only charge on the British exchequer.
T h e costs of this u n i t are therefore included in the summary w i t h o u t
prejudice to the deliberations on a matter which is still sub judice.

West Africa.
30. The scale of possible attack on the port of Freetown in the event of w a r
w i t h Germany was recently assessed by the J o i n t Oversea and Home Defence
Committee (C.I.D. 406-C). I t was not considered to be sufficiently heavy to
justify the p e r m a n e n t location of air forces in Sierra Leone a t present. The
Committee nevertheless strongly recommended t h a t facilities should be provided
to enable air forces to be flown there in emergency and to operate on arrival. They
also pointed out t h a t if a t any time Freetown were to become liable to any
considerable scale of air attack a nucleus air unit, as well as the means for its
reinforcement, would be necessary. On a previous occasion, when our defence
policy was governed by the possibility of France being the enemy, the air require­
ments were stated i n the following terms (J.D.C. No. 175) : —
" I t is considered t h a t the scale of air attack on Freetown could be
effectively reduced by the provision in Sierra Leone in peace time of a total
of two bomber squadrons and one fighter bomber squadron. This estimate
might be reduced if there existed elsewhere in West Africa in peace time one
or more squadrons available in emergency as reinforcements. I n fact,
provided the necessary aerodromes are p r e p a r e d in peace time and provided
a suitable nucleus u n i t is normally located in Sierra Leone, it is preferable
t h a t these squadrons should be maintained in a more central position in
Africa so t h a t they would be available for use in Sierra Leone or elsewhere
as r e q u i r e d . "

31. When, therefore, it becomes possible to make good deficiencies in

accordance w i t h our ' ' long range '' policy, three squadrons should be provided for
W e s t Africa. The air defence of those territories could not in any event be
provided by h u r r i e d reinforcements. The air route from the Sudan to West
Africa crosses large areas of French territory, and if our relations with France
were to deteriorate it might prove very difficult to reinforce Sierra Leone from the
Middle East in an emergency, even if squadrons could be made available for t h a t
purpose. I t will be necessary, therefore, to provide aerodromes and a nucleus
air unit as soon as the international situation indicates the desirability of such a
course. The question of increasing the air forces permanently located in W e s t
Africa should also be kept under review.
* N.B.—Questions immediately connected with the present Abyssinian emergency are not
included in the scope of the present memorandum.
 MALTA.

. 32. No serious t h r e a t to the security of M a l t a is likely to develop, except i n

the event of w a r w i t h either I t a l y or France.

33. I t ' w a s estimated in Memorandum J.D.C. 162 t h a t a reasonable security

would be provided by two permanent squadrons in M a l t a for defensive purposes,
in addition to the one flying boat squadron already stationed there, w i t h an
additional aerodrome for their accommodation. I t w a s also pointed out in t h a t
paper t h a t the requirements of the Fleet A i r A r m in a w a r which involved naval
operations in the M e d i t e r r a n e a n would be so large t h a t at least two further
aerodromes would be required. I n J a n u a r y 1934 it was suggested (J.D.C. 176)
that an interim provision should be made consisting of one composite squadron
and one additional aerodrome. Later, in A p r i l of t h a t year, after consideration
of a W a r Office request t h a t spotter a i r c r a f t should be provided, it was recom­
mended (J.D.C. 180) t h a t this composite squadron should consist of two flights of
torpedo-bombers, one flight of fighter bombers a n d one flight of spotters. The
additional aerodrome has now been sanctioned and two squadrons are being sent
to M a l t a temporarily. I t is suggested t h a t two squadrons for defensive purposes
and one spotter flight should be permanently provided for M a l t a as soon as other
more urgent requirements have been met. A s an i n t e r i m provision the provision
of the Composite Squadron is recommended as soon as the aerodrome is completed.
The whole problem of the defence of M a l t a may, however, require
fundamental'reconsideration in the light of recent events.

GIBRALTAR.
34. The bridging of the gap which u p to now has existed in our a i r
communications between the U n i t e d Kingdom and the Middle E a s t would in
the near future enable m u t u a l a i r reinforcement between the U n i t e d Kingdom
and our overseas possessions to be carried out. I t has long been our aim to
establish an " all B r i t i s h " route for this purpose, but in the past the limitations
of flying range and the lack of suitably spaced landing grounds in B r i t i s h
territory have made such flights impracticable for aircraft. The first of these
difficulties has now practically disappeared, and w i t h i n a few years a large
proportion of Royal A i r Force squadrons will be equipped w i t h a i r c r a f t capable
of flying direct to Gibraltar (the longest stage in the route) and thence to M a l t a
and the Middle East. The provision of an adequate intermediate air base at
Gibraltar is therefore the key to the whole strategic conception of I m p e r i a l
defence, and, consequently, a m a t t e r of first importance.
There are considerable difficulties in the way of providing, t h e required
aerodrome facilities, and as the air base will be the t e r m i n a l of long flights over
the sea and there will be no possibility of a i r c r a f t t u r n i n g back on arrival to a n
intermediate landing ground i n B r i t i s h territory, it is i m p o r t a n t t h a t such
facilities should be adequate u n d e r all circumstances. Meteorological conditions
are sometimes indifferent, and a i r disturbances caused by the mass of the Rock
are often prejudicial to the operation of a i r c r a f t in certain areas. Very little
level ground is available, and such as exists is already used in providing various
social and recreational facilities for t h e population as well as t r a i n i n g grounds
for the troops of the Garrison. There is also the close proximity of Spanish
territory, over which accidental or unavoidable air trespasses might lead to
difficulties with the Spanish Government.
A preliminary investigation of t h e problem has shown, however, t h a t these
difficulties are not insuperable, and reclamation of ground from the sea, together
with the use of a portion of t h e existing level space, may afford a satisfactory
solution of the problem. Detailed consideration of this project has not yet been
possible, nor could any reliable estimate of the cost a t present be framed. The
outstanding advantages to be gained by completing this essential link in our
Imperial air communications would, in t h e opinion of the A i r Ministry, fully
justify a very considerable expenditure.
 WEST INDIES.
35. The increasing ranges a n d potentialities of aircraft make it essential
t o look well ahead when considering the problem of protecting our sea-borne
t r a d e against air and surface attack.
I n the near future a i r protection will be required at the ports a n d in the
open sea on the A t l a n t i c t r a d e routes, as on those other routes now w i t h i n the
orbit of our overseas air bases. F o r the protection of our South A m e r i c a n trade,
a i r c r a f t will eventually be required a t T r i n i d a d a n d in West Africa. For the
P a n a m a , U.S.A., and C a n a d i a n trade, a i r c r a f t will be required in the West
Indies, Bermuda a n d Newfoundland. F o r these purposes nucleus facilities must
soon be provided including at least one squadron of a i r c r a f t i n the W e s t Indies.

FLEET A I R ARM.
36. The Defence Requirements Committee (D.R.C. 14); recommended the
provision of 51 a d d i t i o n a l Fleet A i r A r m a i r c r a f t t o make good deficiencies in
existing complements, a n d of a further 192 a i r c r a f t for New Construction and
to keep pace w i t h the J a p a n e s e Naval a i r expansion, making a total strength
of 402 aircraft by 1940. On the advice of the Ministerial Committee on Defence
Requirements, the Cabinet decided in J u l y 1934 (Cabinet 31 (34) ) t h a t the
deficiency of 51 a i r c r a f t (4^ squadrons) should be made good in addition to any
further aircraft required for the new carrier (H.M.S. Ark Royal) and for new
cruisers of the 1933-34, 1934-35 and 1935-36 programme. On this basis the
strength of the Fleet A i r A r m by A p r i l 1939, would be raised from its strength of
190 to a total of about 277 first-line aircraft, the exact number being dependent
upon the progress of ship construction.
I t will be seen t h a t on the basis of the recommendation of the Defence
Requirements Committee 125 first-line a i r c r a f t would still be required to reach
a total strength of 402 aircraft, but the A d m i r a l t y have now informed the A i r
M i n i s t r y t h a t subsequent developments make it necessary to increase this figure-
to 504, by 1941 or 1942. '

ARMY CO-OPERATION.
37. The recommendation of the W a r Office t h a t 12 Territorial A r m y
Divisions (of which 8 will be ready in the first six months) should be equipped
on a scale to enable them to t a k e p a r t in military operations against a major
Power, will involve the provision of air units for '' A r m y Co-operation ' ' duties
w i t h those divisions. A s it is not contemplated the Territorial Divisions will
begin to go overseas in less t h a n four months after t h e outbreak of war, the A i r
Ministry suggest t h a t the necessary aircraft co-operation could be effectively and
most conveniently provided by units of the A u x i l i a r y A i r Force. There will be
sufficient time after the outbreak of w a r to complete their t r a i n i n g to the
necessary standard.
38. Sources of recruitment for the A u x i l i a r y A i r Force are, however,
limited, and it is not possible to count upon r e c r u i t i n g more t h a n 20 A u x i l i a r y
Squadrons as maximum. I n the scheme for the employment of the A u x i l i a r y
A i r Force to which the A i r M i n i s t r y are a t present working, there will be
16 squadrons in all. They a r e required for Home Defence, and form a n integral
p a r t of the programme for m a i n t a i n i n g Metropolitan p a r i t y with Germany.

39. The A i r Ministry propose t h a t the 8 squadrons required for co-operation

with the 8 Territorial Divisions shall be provided, as to 4 of them, by forming
4 new Auxiliary A i r Force Squadrons and by thus bringing their number u p
from 16 to 20; and as to the remaining 4, by converting existing Bomber squadrons
of the Auxiliary A i r Force into Army Co-operation squadrons and replacing them
i n the Home Defence Force by 4 regular units.
40. F u t u r e requirements for the A r m y are likely to include (a) the provision
of two more squadrons, making ten in all, for co-operation with Territorial
Divisions; (b) Spotter Flights, probably three in all, for co-operation w i t h
Coast Defences; (c) a squadron for communication purposes to accompany the
first contingent of the Field Force.
No financial provision for any of these three requirements is included in the
present proposals.
41. Provision is also made for converting the 5 squadrons of 18 aircraft
each, at present allotted to the Field Force, to 7 squadrons of 12 a i r c r a f t each.

INDIA.

42. The Sub-Committee should realise t h a t no provision is made for w a r

reserves for the a i r forces i n I n d i a . I t is desirable t h a t a n early agreement
must be reached w i t h the I n d i a n Government in this r e g a r d a n d i t may be t h a t
additional reserves will have to be held in the U n i t e d K i n g d o m a g a i n s t I n d i a n
requirements.

SUMMARY OF R E Q U I R E M E N T S AND ESTIMATED COST.

43. I t is not possible to specify exact dates by which the various deficiencies
above should be made good. T h e programme will depend on many factors,
particularly on financial considerations a n d on the requirements of the other
Services. T h e purpose of the new enquiry by the Defence Requirements
Committee is to review all these factors, a n d to d r a w u p a balanced programme
for meeting all defence requirements. T h e summary a p p e n d e d sets out the Royal
Air Force requirements in two P a r t s , and includes a general estimate of the
cost of each item. P a r t I contains a list of those deficiencies which should
be made good w i t h the least possible delay mainly to keep pace with the
expansion of the forces of Germany and J a p a n . P a r t I I contains a statement of
other requirements for which provision should be made in any long-range
programme designed to ensure t h a t our defence p r e p a r a t i o n s a r e adequate to meet
all probable contingencies.
(Signed) E. L. E L L I N G T O N , CAS.
Air Ministry, October 31, 1935.

I" 1 2 2 7 0 - 1
 SUMMARY.
P A R T I . — S T A T E M E N T OF MORE U R G E N T R E Q U I R E M E N T S
Approximate Approximate
Item. Requirement
Requirement.. Initial Cost. Recurring Cost.
£ £
1 (a) Provision and Maintenance of War
Reserves (See Appendix A.) ... 63,050,060 5,200,000
L(&) Enlargement of Reserve of Pilots ... 200,000
2 Singapore—
1 Landplane Squadron ... ... 350,000 130,000
2 Additional operational land­
ing grounds ... ... 275,000
3 Penang—
1 Landplane Squadron ... ... 450,000 140,000
4 Ceylon­
1 Landplane Squadron ... ... 400,000 140,000
5 Aden—
1 Landplane Squadron ... ... 300,000 130,000
6 Hong Kong—
1 Torpedo Bomber squadron.
1 Light Bomber squadron.
1 Landplane reconnaissance
squadron.
1 Auxiliary spotter flight.
1 Repair unit.
1 Additional aerodrome ... 1,850,000 500,000
7 Middle E a s t ­
1 General Purpose squadron ... 250,000 110,000
. 8.- ­ Malta—
1 Composite squadron ( 4 flights) 375,000 125,000
9 East Africa—
1 General Purpose squadron ... 450,000 170,000
10 Training and other Home Effective
Charges for Items 2 - 9 at
£ 5 0 , 0 0 0 a squadron ..- ... 500,000
11 Fleet Air Arm—
To raise first-line strength to
5 0 4 aircraft^ 2,000,000 700,000
12. Army Co-operation Squadrons—
(a) Conversion from 5 to 7
squadron basis ... ... 130,000 20,000
(b) Provision of 8 new squadrons
for Territorial Divisions—
Works ( £ 1 , 1 5 0 , 0 0 0 ) and
Equipment ( £ 7 2 0 , 0 0 0 ) 1,870,000
Maintenance 700,000
13 Gibraltar—
Provision of Aerodrome ... Estimate of cost not yet
practicable.
Total 71,750,000 8,765,000

(say) 72,000,000 8,750,000

N.B.—Items 3 to 6 (inclusive) were recommendations of the Defence Require­
ments Committee (March 1 9 3 4 ) . Item 1 1 also was a recommendation of that
Committee up to a strength of 4 0 2 first-line aircraft: the higher number of 504
is in accordance with the latest available estimate by the Admiralty of the air
requirements of the Fleet.
* The present strength of the Fleet Air Arm, including provision being made in 1935, is 190
first dine aircraft. The programme of expansion formally approved by the Government in
J u l y 1934 for the period 1934-38 was for a first-line strength of 213 aircraft (plus any further
aircraft necessary in that period for new carriers or for new cruisers). The above estimates are
for expansion from 213 to 504 first-line aircraft and include only items (i.e., works and training)
falling as a net charge on Air Votes. The cost of the aircraft is contained in the Admiralty
programme.
 PART II.—REQUIREMENTS FOR " L O N G - R A N G E PROGRAMME."

Approximate Approximate
Requirement. Initial Cost. Recurring Cost.
f. & ' £
Malta—
Convert composite squadron (vide
P a r t I) to 2 squadrons a n d
1 flight, viz. : ... ... ... 250,000 175,000
1 Torpedo bomber squadron.
1 F i g h t e r bomber squadron.
1 Spotter flight.
West A f r i c a —
1 General P u r p o s e squadron ...1 ^ m n n n -.onr^n
1 Aerodrome . ... f 4o0,000 130,000
(To be eventually increased t o —
2 Bomber Squadrons.
1 Fighter Bomber squadron.)
West I n d i e s —
1 Reconnaissance (flying boat or
landplane) Squadron 450,000 130,000

Total ( P a r t I I ) ... ... 1,150,000 445,000

T r a i n i n g (Flying and Ground), r e c r u i t i n g

a n d other Home Effective Charges
for Maintenance of above 3 additional
squadrons at, say, £50,000 per
squadron 150,000

595,000

(say) 600,000

A P P E N D I X A TO S C H E D U L E III.

NOTE ON W A R RESERVE REQUIREMENTS.

1. W a r reserves to be a d e q u a t e must cover w a r wastage until it is

overtaken by the war output of industry. A n accurate estimate of probable
output from industry cannot be made in t h e absence of concrete plans for
industrial mobilisation on the lines envisaged by the P . S . O . Committee.
2. To provide the information required by t h e D . P . R . Committee a pre­
liminary investigation has been made of t h e potential o u t p u t of the a i r c r a f t
industry in war. From this i t is a p p a r e n t that, even allowing for extensive
preparations in peace time, a i r c r a f t and engine reserves must be sufficient to cover
wastage in the first four months of war. Similar considerations apply to other
classes of technical equipment; but for bombs, ammunition and pyrotechnics a
six months' reserve is required. T h e i n d u s t r i a l capacity in peace time for t h e
manufacture of bombs, explosives and machine-guns is in general so small
that immediate measures must be taken to expand this capacity so as to constitute
an adequate basis for w a r expansion. For this purpose an estimated expenditure
of £2,100,000 is required on additional plant, jigs and tools. T h e reserves of
[12270-1] ' H
mechanical t r a n s p o r t vehicles are based on initial requirements only a n d will
have to be supplemented by extensive impressment of civil t r a n s p o r t vehicles when
the emergency arises.

3. Details of reserve requirements are contained in the Tabular Statement

below. The scale adopted for each item is indicated as far as possible with the
estimated cost of m a k i n g good deficiencies. The estimates are based on current
prices; the tendency of aircraft, in particular, to increase in cost w i t h growth in
size and complexity has not been taken into account. The total expenditure
would be in the order of £50,000,000 up to the end of the financial year 1938-39.

4. The total capital cost of providing additional storage accommodation

for w a r reserves is estimated a t £2,750,000. T h e details are as follows : ­
(a) Engines, spare p a r t s , aircraft equipment £
and mechanical t r a n s p o r t ... ... 1,000,000
(6) A i r c r a f t ... ... ... ... 1,250,000
(c) Bombs ... ... ... ... 500,000
Nothing has been included for storage in respect of petrol as it is proposed to
a r r a n g e for the supply Companies to provide this. T h e estimated a n n u a l cost
of this arrangement is £175,000. I t may also be convenient to a r r a n g e for air­
craft firms to provide some of the storage for aircraft on a similar basis.

5. T h e adequacy of the proposed reserves is dependent on the existence of

effective plans for the mobilisation of industry on the outbreak of war. The
assumptions which have been made could only be justified if these plans are
complete in every respect. U n t i l they have been developed only a tentative
estimate can be given for the expenditure which will be necessary to establish
the requisite stocks of jigs, tools, gauges, special machinery, raw m a t e r i a l and
semi-manufactured p a r t s for accelerating o u t p u t as quickly as possible on the
outbreak of war. P r e l i m i n a r y investigations suggest t h a t a n initial expenditure
of about £8,000,000 would be required for this purpose. This amount would be
additional to the £2,100,000 (referred to in p a r a g r a p h 2 above) for developing
m a n u f a c t u r i n g facilities of bombs.
6. On the above basis the expenditure u p to the end of 1938-39 for provision
a n d storage of w a r reserves and for provision of jigs, tools, & c , would be broadly
a s follows :—
(d) To provide W a r Reserve of Aircraft, &c.— £
(i) Home Defence 43,400,000
(ii) Fleet A i r A r m 6,800,000

50,200,000
(&) Storage Accommodation 2,750,000
(c) Expansion of Facilities for Manufacture of
Bombs, &c 2,100,000
(d) E q u i p m e n t for I n d u s t r i a l Mobilisation 8,000,000

63,050,000
7. A p a r t from i n i t i a l cost of provision, it must be realised t h a t if the war
reserve for Home Defence is to consist of up-to-date a i r c r a f t it will be necessary
to provide for the regular w i t h d r a w a l of obsolete a i r c r a f t from the reserve. The
rapid r a t e of progress in design will make this a problem of much difficulty. It
would be i m p r u d e n t to estimate (if an adequate reserve of up-to-date aircraft is
to be permanently maintained) for a net annual replacement expenditure of less
t h a n 12 per cent, of the i n i t i a l cost of provision, approximately £34,000,000
(Home Defence £29,000,000, F.A.A. £5,200,000) of the reserves of a i r c r a f t and
other material subject to obsolescence: £4,000,000. I n addition, it will be
necessary periodically to replace most of the equipment (jigs, gauges and
tools) and some manufactured p a r t s provided under (d) above for industrial
mobilisation. A s far as can be a t present foreseen, a sum of £1,000,000 annually
would be required to keep the equipment under (d) up to date.
 ESTIMATED COST OF PROVISION OF WAR RESERVES OF AIRCRAFT, &C.

(A)—Initial Cost.

I.—For Home Defence War.

£
1. Airframes, 1st line (150 per cent.) 10,100,000
2. Airframes, T r a i n i n g (4 months)... 2,200,000
3. Engines, 1st line (183 per cent.)... 7,500,000
4. Engines, T r a i n i n g (4 months) ... 3,100,000
5. A i r f r a m e a n d Engine Spares (4 months) 2,600,000
6. A i r c r a f t E q u i p m e n t (4 months) ... 3,600,000
7. General Stores (1 to 3 months) ... 1,000,000
8. Bombs (6 months) ... ... ..." 8,200,000
9. S.A.A. (6 months) 1,300,000
10. Pyrotechnics (6 months) ... 1,800,000
11. Mechanical T r a n s p o r t (immediate requirements) 1,600,000
12. Fuel (Aviation) (3 months) 2,400,000

45,400,000
Less Reserves already held or due on 31st March, 1936 2,000,000

43,400,000
II.—For the Fleet A ir A rm.
£
1. Airframes, 1st line (133 per cent.) 2,800,000
2. Engines, 1st line (166 per cent.)... 1,600,000
3. A i r f r a m e s a n d Engine Spares (4 months) 410,000
4. A i r c r a f t E q u i p m e n t (4 months)... 393,000
5. Bombs and S.A.A. and Pyrotechnics (6 months) 1,400,000
6. Aviation Fuel (3 months) 238,000

6,831,000

(say) 6,800,000
III.—Storage Accommodation and Equipment for " Industrial Mobilisation."
£
1. Provision of Storage 2,750,000
2. Provision of J i g s , Tools, & c , for M a n u f a c t u r e of
Aircraft 8,000,000
3. Provision of J i g s , & c , for M a n u f a c t u r e of Bombs ... 2,100,000

12,850,000
Total of I, I I and I I I 63,050,000

(B)—Annual Recurring Cost.

1. F o r renewal of reserves of aircraft, &c.— £ £
Home Defence ... ... 3,600,000
Fleet A i r A r m 400,000
4,000,000
2. F o r renewal of J i g s and Tools ... 1,000,000
3. F o r maintenance of Storage Accommodation 50,000
4. F o r storage of Reserves of P e t r o l ... 175,000

5,225,000
(say) 5,200,000
 APPENDIX B TO SCHEDULE III.

(i) Summary of Recommendations by First Defence Requirements Committee

(D.R.C. 1 4 ) shotving outstanding Deficiencies, Provision for which is
included in new Proposals.
I.
Recommendations of the
Departmental Defence
Item. Requirements Committee
(February 1934).
II. III.
Recommendations of the Items not covered by
Ministerial Committee on
Recommendations of the
Defence Requirements as Ministerial Committee
approved by the Cabinet
(D.R.C. 1934).
(July 1934).

HOME DEFENCE To expand to 52 Squadrons. To expand to 75 Squadrons.

Later increased (May
1935) to 123 Squadrons.

WAR RESERVES £3,505,000 bv end of 1938 with £1,200,000 by end of 1938,

(Equipment) £1,120,000 additional by end
of 1940.

SINGAPORE 2 Land Squadrons. 2 Land Squadrons.

1 F.B. Squadron (includes 1 1 F.B. Squadron (includes
Squadron to replace u n i t 1 Squadron to replace
loaned from Home Defence). u n i t loaned from Home
Defence).

HONG KONG 1 F.B. Squadron in 1938. 1 Squadron for Far East 3 Squadrons.
1 Land Squadron in 1939. since allocated to Hong 1 Repair Depot.
2 Land Squadrons in 1940. Kong. 1 Aerodrome.
1 Repair Depot. 1 Landing Ground.
1 Additional Aerodrome.'
1 Landing Ground.

PENANG ... ] F.B. Squadron by 1940. - Nil. 1 Land Squadron.

CEYLON ... 1 Land Squadron by 1940. Nil. 1 Land Squadron.

ADEN 1 F.B. Squadron by 1940. Nil. 1 Land Squadron.

FLEET AIR ARM . 51 first line aircraft by 1939 (to
make good deficiencies).
192 first-line aircraft by 1940
(for new ship construction).
(Making total first - line
strength of 402 aircraft by
1940.)
4-J squadrons (54 aircraft) 125 first-line aircraft toi
by 1939. bring total to 402; This
(Plus any further aircraft requirement since in­
required by 1939 for new creased to 503.
carrier or new cruisers.)

(ii) Note on Financial (Capital Expenditure only) Aspect of Present Recommen­

dations as compared with Recommendations of (February 1 9 3 4 ) First
Defence Requirements Committee.
1. The recommendation of the D e p a r t m e n t a l Defence Requirements
Committee (D.R.C. 1 4 — F e b r u a r y 1 9 3 4 ) in respect of (a) w a r . reserves.
(b) additional squadrons overseas, a n d (c) additional a i r c r a f t for the Fleet Air
A r m would have involved capital expenditure of (approximately) £ 1 1 , 0 0 0 , 0 0 0
between 1 9 3 4 a n d 1 9 3 8 inclusive, w i t h further capital expenditure of £ 4 , 4 0 0 , 0 0 0
in 1 9 3 9 and 1 9 4 0 . T o t a l : £ 1 5 , 4 0 0 , 0 0 0 .
2. The sum for capital expenditure under these three heads which would
have been available by 1 9 3 8 under the recommendation of the Ministerial
Committee would not exceed £ 1 , 2 0 0 , 0 0 0 for works and i n i t i a l equipment for
overseas squadrons; £ 5 0 0 , 0 0 0 for i n i t i a l equipment for Fleet A i r Arm
deficiencies; a n d £ 1 , 2 0 0 , 0 0 0 for W a r Reserves. Total : £ 2 , 4 0 0 , 0 0 0 .
3. The difference between the c a p i t a l expenditure recommended for war
reserves, overseas requirements and the Fleet A i r A r m under the proposals of the
original Defence Requirements Committee, and the expenditure contemplated by
the recommendations of the Ministerial Committee was t h u s £ 1 3 , 0 0 0 , 0 0 0
( £ 1 5 , 4 0 0 , 0 0 0 less £ 2 , 4 0 0 , 0 0 0 ^ £ 1 3 , 0 0 0 , 0 0 0 ) .
4. The difference between £ 1 3 , 0 0 0 , 0 0 0 a n d the sum of (approximately)
£ 7 3 , 0 0 0 , 0 0 0 now proposed is due (a) chiefly to the fact t h a t w a r reserves have
to be provided for on a larger scale in face of G e r m a n rearmament, and for
1 2 3 squadrons a t home as compared w i t h 5 2 squadrons under the earlier scheme;
also (b) to the inclusion of some deficiencies not covered by the original Defence
Requirement Report, e.g., squadrons for Middle East, Malta, E a s t A f r i c a ; (c) to
increases in cost of the later types of a i r c r a f t which have emerged since D.R.C. 14
was p r e p a r e d ; and (d) to provision being included for holding jigs, &o, for
immediate acceleration of production at outbreak of w a r .
. Air Ministry, October 1 9 3 5 .
 314"

COPY NO. 8 5

S C H E D U L E I V TO D.R.C. 37

The Problem of Making Good the Army's Deficiencies, and the

Rate at which t h e y can be Remedied

Note by the Master-General of the Ordnance

The total of Army deficiencies in war material amounts to 111 millions^. 57

Manifestly such a sum cannot be expended on a 3-year programme. But although , General
this is a formidable undertaking, it is not impossible to arrive within sight of completion 7813
on a 5-year programme. I t is observed that the critical date can hardly be earlier and
may well be later than that given in D.P.R. paper No. 12.
It is reasonable therefore to base ourselves on a 5-year programme on an ascending
scale of expenditure and to endeavour to show progressive rates of readiness as far as
one is able to estimate them.
Estimates must of necessity be very approximate, because, firstly we are dealing
with a project which in this country, at all events, is an entirely new departure, and
secondly, the explorations of the Supply Board Technical Establishment as to
productive capacity were to cover a period of five years, of which only eighteen months
have elapsed.

2. It is necessary here to state in broad outline the only method by which very
large deficiencies in war material can be supplied and at the same time a potential for
the much greater quantities required after the outbreak of war, can be built up. I t is
the method long since advocated by Lord Weir and accepted by the P.S.O. Committee,
under the the name of the Shadow Armament Industry. In principle it is excessively
simple ; its application is governed mainly by a regular supply of funds assured in
advance.
The principle is briefly this. Firms who do not normally make warlike stores are
engaged to do so by placing orders with them for relatively small output of peace
production on the condition that they lay out their works and hold machinery
for a war output which represents their peace output many times, multiplied, e.g.,
tenfold.
It is to be noted that whereas the Shadow Armament Industry scheme applies
essentially to new firms, it may be applied equally to existing contractors to expand
their " war potential."

3. Obviously certain conditions are necessary :—

(a) An approved long term programme guaranteeing funds to the Department.
(b) Continuity of orders to the trade so that contractors may be attracted by
" business propositions."
(c) Continuity of orders so that personnel and especially supervisory staffs may be
trained.
(d) Subsidies, whether taken up in the cost of the produced article or in direct
payment, so that plants may be balanced and maintained to create a " war
potential."
(e) Greater recourse may be necessary to non-competitive contracts, but machinery
exists by which, under ministerial authority, this can be arranged.
Finally we cannot run this project on a system of secrecy from Whitehall. I am
convinced that leaders of industry should be taken into confidence and it be put before
them that we are working to meet a national emergency, possible or even probable in a
few years time. Further it is very necessary that we should enlist not only the good­
will of the manufacturer but also his ideas and productive experience. But the first
essential in our democratic state is for the policy of His Majesty's Government to be
publicly announced, not by a P.S.O. of a Defence department but by a minister of the
Crown. Reasoned publicity, and consultation with industry, I believe to be essential
to success.

* Excluding "Works Services.

 4. I have dealt above with manufacture in or by the trade. To complete our war
requirements there is a large range of output which is either non-existent in the trade
or covers so small a proportion of our eventual requirements that we must rely largely
on Government factories. This field of activity is mainly occupied by the requirements
for explosives and propellants and for the filling of shells, cartridges, fuzes, bombs and
torpedoes.
Here we have no option but to extend bur Government factories and put down
capital.

5. I endeavour now to answer the questions set forth in the Conclusions on Paper
D.P.R. 12 and in doing so I must emphasize that the estimates given must be regarded
as tentative because there are a large number of factors of which we have as yet little
experience. - -
Conclusion (i)—as stated above the requirements of the Army cannot be met on a
three-year programme. Of the total of deficiencies in war material amounting to
111 million some 48 million represents " t h e limit of practicability" i.e., the amounts
that it is estimated could be spent by March 31st, 1939, if the order to proceed were
given now. The state of the Army as regards war material would then be :—
A.D.G.B.—Half of the present deficiencies made good.
. Ports.—The more important major deficiencies made good.
Field Force—
1st Contingent.—80 per cent, of deficiencies remedied.
The shortages will inevitably fall on ammunition, tanks and guns.
2nd Contingent.—Will be clothed, will have its peace equipment but will have
no ammunition until the 7th month of war and will not receive the
balance of its equipment in full until the 9 th month of war.
3rd and 4th Contingents.—Will be clothed and have their peace equipment.

6. On a four-year programme it is estimated that A.D.G.B. will still be deficient

as to 25 per cent.
Field Force—
1st Contingent.—Complete.
2nd Contingent.—60 per cent, of its present deficiencies in equipment and
maintenance stocks made good.
The shortages again will fall on ammunition, tanks and guns.

7. On a five-year programme we shall be within striking distance of completion

of the whole programme.

8. Concluions (ii) (a).—The special measures for increasing factory production

are outlined at paragraphs 3 and 4 above. The cost is estimated at some £ 1 4 million.

9. Conclusion (ii) (b).— Question 1. " If no special measures were taken as regarded
factory output, what state of preparedness would we be able to achieve by that date ? "
In such a case we should be thrown back mainly on our existing resources plus
such few contractors as might be persuaded to enlarge their facilities.
It is estimated that we should get a " s p e n d " of some £ 2 1 million in three years
as against £ 4 8 million above. Our " w a r potential" would remain practically as it
stands to-day (e.g. in the case of ammunition requirements we are deficient of some
85 per cent, in the first year of war), all of which would have to be created after
mobilization.
Assuming an expenditure on A.D.G.B. and ports as at paragraph 5 above, the
1st Contingent of the Field Force would still be short of 50 per cent, of its
present deficiencies and have no " war potential " behind it. It might be maintained
for perhaps four months in the field—a repetition of 1914.
Question 2. " Or, alternatively, how long a period would be required to reach the
same state of preparedness as in (a) above ? "
 Here again one must assume that " war potential" would be practically non­
existent for many items required. The corollary is that one would have to hold
reserves ready in peace to cover the period of development of " war potential," which in
these circumstances might be anything from nine months to one year. (It will be
remembered that in 1918 after the Ministry of Munitions had been in existence two
years it needed a full 12 months to build and get in production a new factory.)
I estimate that our total stocks would have to be nearly doubled in money value.
That gives a figure of £150/200 million which we might spend in 15/20 years.

WAR OFFICE,

2nd October, 1935.

(B35/205) 300 11/35 W.O.P. 9060

 S C H E D U L E V T O D.R.C. 37.

E s t i m a t e of A i r Raid P r e c a u t i o n s Requirements, 1936-39.

Memorandum, prepared by the Air Raid Precautions Department, Home Office.

T H E following is a very a p p r o x i m a t e estimate of air r a i d precautions

requirements u p to 1939, so far as can be seen at present.
The completion of the equipment has been fixed a t 1939 i n accordance w i t h
the present Committee of I m p e r i a l Defence ruling.* I t is realised t h a t this
might be subject to modification one way or the other.
A brief note is attached explaining such details as would seem necessary for
the estimates properly to be understood.

Respirators.
(a) General Service type.
I t is estimated t h a t approximately 400,000 General Service respirators will
be required for air r a i d precautions services (e.g., police, fire brigades, first aid
and medical services, decontamination squads, gas detectors). The cost of these
respirators is approximately 18s., produced under Government auspices. T h e
Government has u n d e r t a k e n the responsibility for a supply of these respirators
to all local authorities in accordance w i t h requirements.
400,000 General Service r e s p i r a t o r s at 18s. each = £360,000.

(b) Special Service type.

I t is estimated t h a t approximately 400,000 Special Service r e s p i r a t o r s will
be required for air r a i d precautions services (e.g., for the balance of personnel of
the organisations mentioned above who do not require the General Service
respirator). These respirators cost approximately 8s. each produced under
Government auspices.
The Government have undertaken to supply these r e s p i r a t o r s to all the local
authorities in accordance with their requirements.
400,000 Special Service respirators at 8s. e a c h ^ £160,000.

(c) General Civilian respirator.

A recommendationt has gone to the Cabinet from the A i r R a i d P r e c a u t i o n s
(Policy) Sub-Committee to the effect t h a t the Government should accumulate
supplies of a simple respirator for free issue to those members of the general
population who are not in possession of r e s p i r a t o r s of their own if an emergency
should ever arise.
If this recommendation is accepted i t is estimated t h a t a t least 30 million
respirators will be required, though this number m i g h t have to be increased to
approximately 40 million if the e n t i r e population is required to be issued w i t h
respirators. T h e 30 million proposed covers all those areas in which air a t t a c k
is most probable, but omits areas in the extreme west, south-west and north-west,
in which the risk is probably extremely remote. T h e population of these remote
areas amounts to 10£ million.
These respirators are not suitable for use by children under five years of age.
The numbers of children under this age represent about 7 per cent, of t h e
population. T h e question of their protection is dealt w i t h below.
The cost of the civilian respirator is approximately 2s., though it is possible
that this figure may be capable of reduction in view of the large q u a n t i t i e s
* C.I.D. 266th Meeting, Conclusion 1 (a),
t C P . 202 (35), also A..E.P. (P) 42.
[12270-11 I
required; however, the question of storage must be taken into account. A figure
of 2s. per respirator is, therefore, quoted as being probably reasonably near the
mark.
£
30,000,000 General Civilian respirators a t 2s. each = 3,000,000
I f a further 10,000,000 are required, cost - ... ^ 1,000,000

Possible total = 4,000,000

Children.
A device is being developed which, i t is hoped, may provide protection for
children under the age of five. A t this stage it is only possible tentatively to
quote a price for this requirement, i.e., half-a-crown. I t is conceivable t h a t this
price may be susceptible to reduction. If a favourable decision is taken by
t h e Cabinet, on the recommendation of the A i r R a i d P r e c a u t i o n s (Policy)
Sub-Committee, i t would seem inevitable t h a t provision will be required, in
addition, for children for whom the General Civilian respirator is unsuitable.
The number of children in the potential dangerous p a r t s of the country is
approximately 2\ million.
I n the western, south-western and north-western areas t h e number is
approximately f million.
The total possible requirements for children, therefore, is as follows :—
£
2,500,000 a p p a r a t u s a t 2s. Qd. = (approximately) ... 315,000
750,000 a p p a r a t u s at 2s. 6d.^ (approximately) ... 95,000

Protective Clothing.
The present ideas in r e g a r d to protective clothing will probably be subject
t o radical change if, as is understood, the process known as " impregnation " is
successful.
This process is under active investigation, a n d it is understood that, in the
n e a r future, it will have reached a stage when i t s practical application can be
investigated. This process may, i t is hoped, result i n a considerable saving of
money, particularly from the replacement point of view, and may incidentally
also effect a saving in personnel, since protective clothing a t present is a great
h a n d i c a p ' and active manual work cannot be carried out in i t except for
comparatively short periods.
Since the whole proposal is in r a t h e r an embryo state, it is only possible to
p u t forward a very tentative figure, and, in point of fact, no sum is being
included in the Home Office estimates next year for the provision of t h i s clothing,
p e n d i n g w h a t is hoped to be the favourable result of the productive experiments
i n impregnation.
The figure proposed under this heading is £250,000. I n any event, the
Government have undertaken to make free provision for essential air raid
services.
Bleach Powder.
Bleach powder is a consumable article which deteriorates if kept in store for
a n y length of time.
The whole question is before the P r i n c i p a l Supply Officers Committee, and
t h e proposal is t h a t arrangements should be made if possible w i t h Imperial
Chemical Industries by which they would guarantee a certain minimum supply
of bleach, in time of emergency in r e t u r n for the payment of a subsidy.
This arrangement is not in any way settled, and has not been discussed, I
believe, w i t h I m p e r i a l Chemical Industries.
The stock of bleach which should be immediately available on the outbreak
of war, and which would be required to last u n t i l further production was
available, is 25,000 tons, which, at present prices, is equal to a sum of £200,000.
Assuming a subsidy of 10 per cent, h a d to be p a i d in the form of interest on
t h i s capital, then an amount of approximately £60,000 would have to be found
over the period of the next three years.
The suggested requirement under this heading is, therefore, £60,000.
 Hospital Equipment.
The Government have u n d e r t a k e n w h a t is, a t present, a r a t h e r undefined
commitment in r e g a r d to the supply of certain hospital equipment which m i g h t
be deficient on the outbreak of war. I n general, expenditure u n d e r this head will
only be required if an emergency ever arose, but there may be certain t h i n g s of a
non-consumable n a t u r e , e.g., stretchers, which i t m i g h t be essential to accumulate
beforehand owing to supply difficulties. The figure a p p r o p r i a t e d to this account
is, therefore, a very a p p r o x i m a t e estimate.
Estimate for hospital equipment, £300,000.

General Remarks.
If an emergency ever arose the Government would clearly be faced w i t h
considerable expenditure for providing certain protective a r r a n g e m e n t s which
might be held, rightly or wrongly, by local authorities to be p a r t of the n a t i o n a l
service. A t this stage i t . is quite impossible to produce any figure of possible
expenditure, nor, presumably, is it required, since we are dealing only w i t h
provisions or deficiencies which ought to be accumulated in time of peace.
There is another very i m p o r t a n t aspect of air r a i d precautions, to which
reference is made, although again it is q u i t e impossible to suggest any figure of
expenditure even if H i s M a j e s t y ' s Government contemplated t h a t action would
be required.
The information which this D e p a r t m e n t is collecting will certainly show
that there are certain vital industries which, for a variety of reasons connected
with their geographical situation, their lay-out, and their vulnerability to air
attack, cannot be given any reasonable degree of protection; t h a t is to say, any
measures which it may be possible for this D e p a r t m e n t to recommend will only be
hi the n a t u r e of palliatives a n d will be quite ineffective against determined air
attack.
In some cases, for example, Billingham, the production m a y be an absolutely
vital element in time of w a r , and, as things stand a t present, complete destruction
or disorganisation by hostile a i r attack is a factor which cannot be left out of
account, the results of which might be very far-reaching. To contemplate moving
an enormous works of this k i n d is probably entirely out of the question; but i t
may well be necessary for the Government to consider whether some alternative
might not have to be encouraged which m i g h t entail a subsidy, or whether an
accumulation of adequate reserves in a less vulnerable p a r t of the country might
not be essential. U n t i l this D e p a r t m e n t has completed its survey it will not be
possible to picture the situation, a n d certain elements of this situation are
probably already being actively investigated and considered by the Defence
Departments. As and when, however, this D e p a r t m e n t g a t h e r s information
which is considered to be of p a r t i c u l a r national importance, special appreciations
will be p u t forward for the consideration of-the Committee of I m p e r i a l Defence.
In any such appreciations two aspects will be considered : first of all, the
vulnerability of the factory or u n d e r t a k i n g itself, together w i t h the effect of any
protective measures which may be recommended; and, secondly, the vulnerability
of the factory or u n d e r t a k i n g from the point of view of the supplies on which
it depends for its operation, e.g., water, gas, electricity. Every u n d e r t a k i n g is
really vulnerable, therefore, from two aspects : its own, and the sources of power
on which it depends for its operation.
I n connection w i t h this alternative there must also be taken into account
the vital necessity for m a i n t a i n i n g the life of the country even at a minimum
standard. Gas, for example, plays a tremendous p a r t since in London something
like 90 per cent, of the population depend on the supply for their cooking. This
problem is being actively investigated in consultation w i t h all those concerned.
It may again be found t h a t certain measures could be taken which would go a
considerable way t o w a r d s guaranteeing a t least a minimum supply. Such
measures would probably cost money, and the point may arise as to whether such
money, if it is to be spent, can properly be considered to be a charge on t h e
central Government, or whether it is a m a t t e r for the u n d e r t a k i n g itself to
shoulder in view of its large public responsibilities. The most practical example
that can be given a t the moment has j u s t recently come to light. The Gas L i g h t
and Coke Company have stated that, if an e x t r a booster was installed at their
Beckton works, they could probably guarantee supplies of gas to their consumers
even though t h e works suffered considerable damage, a n d always, naturally,
providing t h a t pipes in t h e streets remained in a reasonable state of integrity.
The cost of this booster is understood to be £150,000. This example is not put
forward for definite consideration in any w a y a t this s t a g e ; it is merely quoted
to illustrate the point in mind.
As w i t h other vital matters, any points of this kind will be the subject of
special reports at convenient intervals.

Estimate Covering the Years 1936-39.

Respirators— ^ ^
400,000 General Service respirators ?2n iXn
400,000 Special Service respirators ... ^rYnno
40,000,000 General Civilian respirators ^JvJJxX
3,250,000 A p p a r a t u s - P r o t e c t i o n for children ... *^'nnn
Protective Clothing ... ... Rnnnfv

Bleach Powder onn Una

Hospital Equipment 5,540,000
A n n u a l Estimate : £1,847,000.

Rome Office, October 23, 1935.