- LORD CROMER AND A NAVAL LOAN.
• QOPME fifteen years ago we ventured to assert that the ;/..) best way of dealing with naval competition, and showing the Powers that if the command of the sea, was to be put up to auction we must and would have it knocked down to us, was to arrange for a large loan, and to employ that loan in making the Fleet invincible. By that means we could not only obtain a settled programme, but could give physical proof, which perhaps could be given • in no other way, of our determination to keep the command of the sea. The plan of voting money by driblets, and, • .after a great deal of talk and anxious deliberation, making a bid just higher than the bids of our rivals, had, we urged, the unfortunate result of leading on those rivals, _ and encouraging them to think that if they only put forth a little more effort we should drop behind and not make the necessary bid. A big bid, however, would tend to convince them that we meant business, and would make them- feel that the game of competition was too expensive. For, remember, the great international naval auction is one in which the bids are made in hard cash and the money has to be paid whether the object is secured or not. We are glad to find so practised a financier and so sound an economist as Lord Cromer giving the weight of his high authority to the policy we advocated so long ago as 1894, and support- - Mg it with similar arguments. In his memorable speech to the Unionist Free-Trade Club on Tuesday Lord Cromer declared that if there was to be a race we must win. "The best way to put a stop to baneful competition would be to offer practical proof of the national determination to win at whatever cost." Lord Cromer went on to express his belief that
"heavy naval expenditure was to be justified, not merely on the merits of the case, but because it would be both politic, and in the • long run economical, to show conclusively that no nation or corn- ' bination of nations could hope to compete with us. Borrowing • had always been held to be justifiable in time of war. They were happily not at war, but they lived in a state of armed peace, - which, for all financial purposes, might be said to be very nearly akin to a state of war. For his own part, therefore, although he greatly sympathised with the reluctance of the Chancellor of the Exchequer to resort to borrowing, he thought that a loan, with a • Sinking Fund equivalent to the ordinary life of a battleship '- attached to it, would, under all the circumstances of the case, be justifiable."
Making his point still more specifically, Lord Cromer pointed out that if we were to raise a loan of fifty millions, and were to take the life of a battleship at twenty years -for ourselves, we should be inclined to take sixteen • as a safer estimate—the interest and Sinking Fund charges on that loan would not amount to more than .23,360,000 a year for twenty years. The fifty millions would of course not all be spent in one year, but in four, or possibly five. No doubt an accountant, dealing solely with what we may call the arithmetical view of the problem, would be able to show that the plan advocated by Lord Cromer would really 'be extravagant, and that it would be more economical to raise the money each year in the ordinary way. But even if this is so, it does not in the least meet Lord Cromer's con- tention. His immediate object is moral and political, not . economic, or at any rate not economic in the first instance. He wants to prove to the world that we are determined to win, and so to strike a blow at the competition which is exhausting us and our competitors. But this end, as we have pointed out above, cannot be obtained through annual votes and by a policy of piecemeal. • We want, not to lead our competitors on, but, as we said in 1894, "to choke -them off,' and that process of "choking off" is far more likely to be secured by one big bid than by a number of small ones. It is, we admit, not possible to give direct proof of the wisdom of Lord. Cromer's policy, because it necessarily deals with the attitude of foreign Powers in the future. We can, however, produce indirect proof which appears to us of no small importance. During the first two years of the present Administration Sir Henry Campbell-Bannerman and his colleagues determined that they would show the bona fides of their desire to discourage international expenditure on armaments by reducing our shipbuildinc, programme to a minimum. Accordingly they adopted the policy of those well-meaning friends of peace who declare that the more this country prepares for war at sea and adds to her Fleet, the more she forces others, and especially Germany, to do the same. If, they urge, we would. only have the courage not to build, we should soon find other Powers following our example. Accepting this view in principle, for three years we practically made no bids in the great international maritime auction-room. What was the result ? Did this good example abate the energy and expenditure of our competitors ? Not a bit of it. On the contrary, this very practical proof of our pacific intentions instead of discouraging expenditure acted as a violent stimulant. Germany at once began to build with feverish activity, advancing her naval construction by leaps and bounds,—an advance that culminated in the secret acceleration which was apprehended by our Cabinet last November, and which, as was shown by their public speeches in the spring, made so profound an impression on their minds. In a word, our refusal to bid had the effect of luring Germany into a tremendous effort. Instead of having cooled her zeal, we had inflamed it.
We do not, of course, say that this affords definite and irrefutable -proof that a contrary policy, the policy of announcing a big bid, or rather a series of big bids, must necessarily have the opposite effect. We have, however, a very shrewd feeling that it would have that effect, and at any rate the policy, since it would not materially increase the expenditure we shall make in any case, is well worth trying. At the worst it can do no harm, and at the best it may do a great deal of good. We trust, therefore, that all those who, while determined to maintain our command of the sea, and, to maintain it not on the narrowest possible margin, but upon a margin broad enough for real safety and security, want to attain this end in the cheapest way possible, and to discourage the present ruinous competi- tion, will give their serious attention to Lord Cromer's proposal. Lord Cromer is not a, man who advocates schemes of that kind without thought. It was not thrown off lightly, but was adopted as the mature conclusion of one who has had a life training not only in finance, but in the higher problems of Imperial defence and of international relations. Though he realises the national danger, we may be sure that he has not exaggerated it, or approached it with a mind con- fused by panic, and, further, that the course he proposes is based upon the principles of sound finance. .
In support of Lord Cromer's view on the question of naval policy and naval finance, we desire to draw attention to the speech made by Lord Charles Beresford on Wednes- day to the London Chamber of Commerce. As our readers know, we do not in any sense belong to what has -been maliciously or ineptly called "the Beresford school." On the contrary, many of Lord Charles Beresford's friends hold that he has had scant appreciation from the Spectator, and that we have not been fair to him when we have warned the public against an element of instability and rashness that has on occasion been shown in his method of approaching naval problems. To he quite frank, though we have never doubted his ability as a naval commander, and his power to use a fleet afloat with skill and courage, we have not felt, any very great confidence in what we -may terns his naval statesmanship. We are bound to say, however, that Wednesday's speech, taken as a whole, is not open to these strictures, but shows a moderation of tone which goes far to justify his more eager supporters. His warnings were grave without being exaggerated, and, what is more, without showing animus or that spirit of personal partisanship which, even if excuse may be found. for it in certain recent events, must be the ruin of naval efficiency. Again, his criticism of the 'Dreadnought ' policy was .kept well. within bounds, and . showed no tendency to run to exaggeration and to the representation of the magnificent vessels of that type as well-nigh worth- less. Further, though Lord Charles is, in our opinion, right in thinking that we made a great mistake in our arrogant advertisement of the ' Dreadnought ' type, and that such arrogant advertisement has cost not only us but the world many millions, we are glad to see that he realises that, for good or evil, we are now committed to the policy of the big unit, and that that policy must perforce be maintained.
As to the detailed programme for shipbuilding set forth by Lord Charles we do not desire to express an opinion, for we do not profess to have the expert knowledge required for such criticism. We will only say here that primel facie the policy seems reasonable, and that his plea for an increase in the number of destroyers, or rather of super-destroyers, strikes us as common-sense. One or two other matters raised by Lord Charles, and dwelt upon in the important letter read by him from Sir Frederick Richards—than whom there are few greater or sounder authorities on naval matters living—deserve to be men- tioned. Both speak of what Sir Frederick Richards calls the "cruel bleeding to death of our Coastguard Service; our first and best-trained Reserves are the eyes and ears of our shores." To this protest we desire to give the fullest possible endorsement. The virtual abolition of the Coastguard Service has always seemed to us an at of criminal folly, We feel almost as strongly on the threatened depletion of the Marines. We realise, of course, the difficulty of the Marine officer, who under present arrangements tends to be shut into a moral water-tight compartment, but, in our opinion, any "reform" which moves in the direction of destroying a body at once so efficient and so economical, and a body also of such magnificent traditions, is not a reform at all.
We must make one more reference to Sir Frederick Richards's letter. In it he uses the phrase, "the moral scrapping of the Fleet." Here, we believe, is the real danger. It is true, no doubt, as Lord Charles Beresford shows, that there never was a period when men and officers were keener or better. At the same time, it is impossible to doubt that there are forces at work in the Navy which, if not checked, must produce the "moral scrapping" of which Sir Frederick Richards speaks. Incidents such as those of which the Bacon letters are an example cannot continue for any length of time without weakening the moral fibre of the Fleet, and with it the safety of this realm and Empire.
We feel that as advocates of national economy we cannot leave the subject of this article without a word of apology, or at any rate explanation, in regard to our support of the loan proposal. We will make that apology, however, in the words we used fifteen years ago in advocating a naval loan to "choke off" naval competition, for every word of what we then wrote is applicable, though in a higher degree, to the existing circumstances :— "We have no sort of notion of defending the plan of fixing on a sum of money, and throwing it to the Admiralty with a Do the best you can with that, and be d—d to you.' That is not the way in which a prudent man of business carries out improve- ments in the machinery of his factory. When he is convinced that improvements are needed, he inquires exactly as to what wants doing, and then orders it to be done. He knows that the plan of `Do the best you can' as often as not means sheer waste and muddle. The only satisfactory arrangement is for the Admiralty officials to estimate exactly what is wanted to keep the command of the sea for England during the next ten years, and for the Government, after they have satisfied themselves that the estimate is a prudent and well-constructed one, to adopt it. Only by doing that shall we put matters on a businesslike footing. To begin by asking the question, 'How much can we squeeze out of the Treasury?' must be utterly wrong. The proper way is to ask, 'What do we want ?' That should be the rule in all matters which are essential to the national welfare. It is all very well when grants for Universities or Museums or more inspectors are in question to ask first, What can the Treasury afford?' When it is a question of national existence, the plan of making the economic point of view the most important is absurd. You must save the State before you save its money. We speak thus with no light heart. We are fully aware that the disease of extravagance is one to which demo- cracies are specially liable, and we do not fail to realise that every pound collected in taxation and spent by Government is with- drawn from useful work, and tends to decrease the wealth of the nation. We do not then love naval expenditure for itself. All such considerations are, however, overborne by the plain need for a stronger Navy with which the nation is confronted. When it is a choice of evils, we must choose the lesser. But who can doubt that more taxation is an infinitely less evil than a Fleet too weak to maintain our supremacy ? With Europe an armed camp, and England and her Colonies and Dominions the greatest piece of plunder that the world has ever seen, we should be little less than madmen to run the risk of losing command of the sea. While the sea is the road by which comes the food on which we live, and the road by which we reach and hold our foreign possessions, the sea is our territory."
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