:T:- 
 
 THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 BST6 
 
 V.Z&
 
 f 
 
 FINANCIAL REFORM ^ 
 SCRUTINIZED, 
 
 LETTER 
 
 TO 
 
 SIR HENRY PARNELL, Bart. M.P. 
 
 BY 
 
 GEN. SIR SAMUEL BENTHAM, K.S.G. 
 
 FORMERLY INSPECTOR-GENERAL OF NAVAL WORKS. 
 
 " real Efficiency, which is true Economy." 
 
 Evidence of Sit H. Hardinge, before the 
 Committee on Finance, 1828. 
 
 LONDON : 
 PUBLISHED BY J. HATCHARD AND SON, 
 
 187 PICCADILLY. 
 1830,
 
 LONDON : 
 
 PRINTED BY C. AND W. REYNELL, BROAD STREET, GOLDEN SQUARE.
 
 CONTENTS. 
 
 Page 
 
 PUBLIC ACCOUNTS 5 
 
 BOOK-KEEPING 39 
 
 GOVERNMENT MANUFACTURES .... 50
 
 TO 
 
 SIR HENRY PARNELL, Bart.M.P. 
 
 Sir, 
 
 The very able and earnest manner in which you have 
 treated many of the subjects discussed in " Financial Re- 
 form," whilst it excites conviction of the beneficial results that 
 sooner or later must come from your observations, renders 
 it the more to be regretted that in some instances the 
 facts themselves, as well as the deductions drawn, are very 
 questionable. The parts I particularly allude to, though 
 not extending to the means of raising millions, have for 
 their object the means of saving the need for some of those 
 millions ; and it has appeared to me that those means stand 
 the more in need of investigation since a nation, like an 
 individual, must be the happier when its financial difficul- 
 ties are remediable, not by any diminution of its necessaries 
 or even luxuries, but by a more economical mode of ob- 
 taining them. 
 
 Of the misconceptions that have presented themselves to 
 me in some parts of Financial Reform, you have yourself,
 
 4 
 
 Sir, assigned the cause, by observing, that " It is almost 
 " impossible for persons, not themselves in office, to have 
 " sufficient knoivhdge of details to be able to expose the 
 " fallacies on which the pleas for expenses are enforced ; 
 *' the only mode, therefore, that is left for making out a 
 " case to establish the practicability of retrenchment is, by 
 " reasoning on probabilities, founded on those facts which 
 " are within the observation of every one ;" to which you 
 add, that " this is necessarily an imperfect kind of proof," 
 (pp. 105 and 106) ; and the candour with which you thus 
 admit the deficiencies of your data, implies that you would 
 have availed yourself of facts and details had they been 
 presented to you. Having it in my power to supply you 
 with some of these facts and details, I trust that in address- 
 ing you on this subject, you will look upon me not as an 
 opponent, but as a fellow-labourer, desirous of contributing, 
 as far as in my power, such information, and to throw such 
 lights on matters of Finance, as may tend really to alleviate 
 the burthens on the country, without impairing its security 
 and prosperity, present or future. On one account, at least, 
 I hope you will regard me, too, as not an unqualified coad- 
 jutor, since I was not merely long " in office," but in an 
 office which afforded me peculiar means of acquiring very 
 ample "knowledge of details;" so that in endeavouring "to 
 establish the practicability of retrenchment," I have facts 
 on which m.y statements rest, — facts for the most part re-
 
 corded in official documents, to which reference will be made 
 as I proceed. 
 
 The nature of my duties having been relative chiefly to 
 the civil branch of the Naval Department, it is with refe- 
 rence to this department that my observations will be parti- 
 cularly directed ; but, being founded on general principles, 
 they are most of them equally applicable to the management 
 of the civil branches, at least, of all other public concerns, 
 an extent of application which will be occasionally pointed 
 out. 
 
 PUBLIC ACCOUNTS. 
 
 Of the several subjects treated of in your Financial Re- 
 form, the one which presents itself as requiring to be the 
 first noticed, is that of Public Accounts. The mischiefs 
 arising from the imperfections of the present accounts are 
 indeed expressed by you in strong terms, and as loudly 
 calling for reform, yet my " knowledge of details" has led 
 me to a conviction that the mischiefs in question are under- 
 valued even by you, and are the more dangerous as many 
 of them are concealed. 
 
 On this subject you observe (p. 186), that " In selecting 
 " the principle on which a reform of the present system of 
 " accounts should be grounded, it is necessary to take a 
 " much more extended view than the Commissioners whose
 
 6 
 
 " Reports have been referred to were empowered to 
 " take." 
 
 In the view which I have at different times been led to 
 take of accounts, I never considered the field of my obser- 
 vations otherwise limited than by my faculties, and there- 
 fore I found it expedient and necessary to extend my views 
 gradually from the receipt of the largest sums, to the expen- 
 diture of the smallest, — considering each sum expended as 
 being paid in exchange for the acquisition of some article of 
 the materiel, or for some service of the personnel. 
 
 In taking this extensive view of the subject, it appeared 
 to me that the Treasury, as the name implies, is the money- 
 receiving and the money-distributing department, the Bank 
 of England its storehouse. It is the Treasury that is made 
 acquainted with the annuar re venue entrusted by Parliament 
 to its care — to what amount, from what sources, and at 
 what times to be received — to what purposes, at what times, 
 and in what proportions to be applied. From the Treasury, 
 therefore, information must emanate to the principal autho- 
 rities of the several departments, as to what services will be 
 required from each department ; and what sums will be at 
 their disposal for the obtainment of the personnel and 
 materiel requisite for those services, distinguishing the 
 periodical allotments, weekly, monthly, quarterly, or yearly, 
 as may be deemed proper. 
 
 It is not my present purpose to enquire into the collec- 
 tion of the revenue, nor to trace it on receipt farther than
 
 that I suppose it advantageous that, as collected, it should as 
 soon as possible, according to the case, be deposited in the 
 Bank of England, or its subsidiary Banlis, and by the 
 intervention of as few persons as possible. 
 
 Referring, therefore, now to the civil branch of the 
 Land or of the Sea Service, both of which may be con- 
 sidered as constituting the War Department, the ends 
 desired to be attained by the accounts kept in this branch, 
 as indeed, in all others, relative to the expenditure of 
 public money, are as follows : — 
 
 1st. To exhibit clearly to view for what article of the 
 materiel, or for what service of the personnel, each distinct 
 portion of the public money has been paid. 
 
 2nd. To show whether the public treasure, including 
 the store of materiel — money's-worth — as well as of money 
 in the form of cash, has or has not, at any time, and at 
 all times, been applied according to the destination assigned 
 to each portion of it, by the superior authority. 
 
 3rd. To afford the most efficient checks to misapplica- 
 tion, waste, and theft, in regard to money's-worth, no 
 less than in regard to cash. 
 
 4th. To bring to view how far any given quantities of 
 similar articles, or given amounts of similar services, have 
 been obtained at a greater or lesser cost, as obtained by the 
 different means, and in the different manners, which have 
 been resorted to, at different times, in different places, and 
 under the management of different persons.
 
 8 
 
 And 5thly, to eflfect these purposes, it is essential that 
 the forms of all accounts, and the manner of keeping them, 
 should be such as that for the performance of the several 
 operations, — from the first registering a fact to the making 
 the last general abstracts,— the least degree of skill, as well 
 as the least consumption of time, and consequently the least 
 expense, should be required. Moreover, the form in which 
 the accounts are kept should be the best suited for refer- 
 ence; the language should be the most intelligible to 
 persons of all description. 
 
 Considering that money's-worth, no less than money, 
 should be the subject of public accounts, and that the loss 
 by extravagance, misapplication, waste, embezzlement and 
 theft, in relation to a number of articles of the materiel, 
 far exceeds any losses that have been sustained by the 
 public in the form of cash, it will appear that the actual 
 transfer of cash from hand to hand, which seems the subject 
 to which most attention has been paid, is but the secondary 
 and very inferior consideration, in regard to the savings to 
 be efi"ected by reform. 
 
 The place where money, like any other valuable com- 
 modity, is kept, requires to be a place of safety, and we 
 must suppose no want of security either at the Treasury, 
 or at its storehouse, the Bank of England, where alone all 
 money for public use in the metropolis may most con- 
 veniently, as well as securely, be kept. The dfeliveriug out 
 of money for diflferent payments, might then be eflfected
 
 9 
 
 in the same simple and satisfactory manner in which 
 private persons make their payments. Yet in this, as in 
 other objects of investigation, instead of beginning it at the 
 Treasury, from whence the money is supposed to come, 
 the eligibility of the requisite arrangements will be more 
 clearly traced, by beginning with the employment of the 
 money in payment for services or articles for which money- 
 payments are required. Take, therefore, for example, the 
 work performed in a Dock Yard, as a service with which 
 I am most familiar, and the payments for which may well 
 serve as an example, as they relate to a very great variety 
 of articles of the materiel, as well as services of the per- 
 sonnel, consequently the greatest difficulty, if there be 
 found any difficulty, in making out the accounts. 
 
 In a Dock Yard, the payment to one description of the 
 personnel has to be made on the spot ; great part of the 
 payment is for quantities of work done, at rates according 
 to regulations, and in amount according to calculations 
 made by authorised accountants, of the quantities registered 
 on the spot — the remainder is at a certain rate by the day. 
 To effect security in regard to these payments, it does not 
 seem requisite to have any further complication than that 
 one calculation should be made by the responsible master 
 workman of any branch of business, of the wages earned 
 by each person under liim, within the preceding week; 
 whilst at the same time, as the most effectual check, the 
 data having been daily sent to a different place, to remove
 
 10 
 
 all doubts of collusion, say, to the Accountant Office, in 
 To\m, a similar calculation there made, from the same 
 data, might be transmitted to the Chief Accountant's 
 Office, at the Dock Y^d, who would compare the total 
 thus sent him, with the total made out in the master work- 
 man's account, and should he find these totals to agree, 
 would authorise the payment of it by liis signature to the 
 master workman's account. On the receipt of this autho- 
 rity, the local Cashier would pay into the hands of the 
 master workman the amount, either in cash, or by a draft 
 on the local bank, for which sums he would receive the 
 master workman's receipt ; a simple receipt being the most 
 usual, the easiest, as well as the legal voucher of payment 
 in all private concerns throughout the kingdom. The 
 master workman, or a distributor chosen by the work- 
 men themselves, having thus obtained the cash, would dis- 
 tribute it in the portions due to the several workmen under 
 him; their silence on the subject of pay, after the 
 known customary time of distribution, being in regard 
 to them considered as proof that they had been duly paid. 
 This mode of payment I first introduced in the three 
 manufacturing establishments at Portsmouth, begun and car- 
 ried on for many years under my direction.* The wages 
 
 * On this first occasion of mentioning the three new establishments 
 in Portsmouth dock-yard, I must observe that they were withdrawn 
 from all influence of the system of official aggregate management. The
 
 11 
 
 were thus paid weekly, sometimes to the amount of about 
 5000/. a year, amongst about ninety or a hundred operatives, 
 by the master of the metal mills, after working hours ; and 
 payments were made in the same manner in the two other 
 of those establishments, the wood mills, and the millwrights' 
 shop, during the whole time they were under my management. 
 I understand that, conformably to my former recommenda- 
 tion, and to the example thus aiforded, all the artificers in the 
 Dock Yards are now paid in the same manner ; I should 
 add, that during the whole time those establishments were 
 under my direction, no instance of difficulty, inconvenience, 
 or loss of any working-time, resulted from this mode ; when 
 by the former mode, besides the whole extra expense of 
 pay-clerks, the value of the operatives' time lost on pay 
 days only, in the Dock Yards, did not amount to less than 
 1000/. a year.* 
 
 This example is brought now to notice, because I feel 
 assured, from the investigations I have entered into, that 
 not only all money payments in the several departments at 
 the naval arsenals at the out-ports, and in town, but the pay- 
 Navy Board happened to perceive that under that management, and bj' 
 means of the persons subject to their order, the businesses in question 
 could not be introduced ; and though a Board, they in this instance 
 informed the Admiralty that they saw no alternative to the putting 
 them under my sole management, subject only to my individual 
 responsibility. 
 
 * Naval Papers, No. 8, page II.
 
 12 
 
 ment of all seamen's wages, may likewisie be effected as easily, 
 without any need of pay-clerks, or others in their lieu, or of 
 the more costly accounts kept of the payment to seamen, ma- 
 rines, and all others. The purser might in this case pay the 
 money, with any detention which might be required, according 
 to regulation ; and his accounts might be carried on weekly 
 with Kttle more trouble than he is now obliged to take for 
 noting articles he has to furnish continually to seamen; — and 
 as to the rating of seamen, that is the determining in regard 
 to each man, whether he be entitled from his intelligence, 
 good behaviour, or otherwise, to be paid the high pay of 
 able seamen, or whether he should be classed as an ordinary 
 seaman, or as a landsman, the checks on tliis classification seem 
 to require that it should be, as I believe it still is, placed in 
 other hands, as noticed in Naval Papers, No. 3, pages 19 
 and 20. 
 
 In regard to claims of payment for all articles of the 
 materiel provided for naval service, this business, now so 
 complicated, might likewise be much simplified, and as 
 easily effected, by reducing it to the manner in which it 
 is practised by private individuals in their own concerns, 
 domestic as well as mercantile. Tlie merchant who supplies 
 a commodity should himself, from his own data, make out 
 his bill of articles supplied, specifying the quantities and 
 tates, and should present it to the accountant-officer, who 
 Laving examined the quantities as received by the store- 
 keeper, seen that the rates were conformable to agreement.
 
 13 
 
 and the calculations correct, might sign the account in testi- 
 mony of its correctness ; he would then deliver it to the 
 merchant, who, on presentation of the account thus certified 
 to the cashier, would receive from him such a cheque on the 
 Bank as an individual draws upon his banker. The mer- 
 chant's receipt would likewise in this case, as in private 
 concerns, be the simplest and only legal voucher necessary, 
 or expedient, to ascertain that the money had been paid for 
 the article so authenticated. 
 
 A check, however, would evidently be necessary on the 
 cashier, otherwise he might draw upon the Bank, cause 
 money to be received, and carry off the amount. The 
 simplest check would be that an account, specifying the 
 amount of all bills examined in the course of the day, should 
 previously to their payment be sent daily by the accountant 
 to the Bank, specifying the name of the person to whom 
 due, together with that of the cashier on whose cheque it 
 would be to be paid, and making it necessary that no 
 cheque should be paid, the amount of which did not agree 
 with this notification previously received from the ac- 
 countant. This arrangement need not necessarily cause 
 delay beyond that of one day in payment of the cheque ; 
 but by making an interval of three or four days necessary, 
 it would admit of a further check before payment, where 
 expedient, as I shall hereafter mention. A delay of this ex- 
 tent it is true, short as it is, would be a loss of interest, and a 
 want of capital to the merchant for so many days ; but
 
 ^4 
 
 compared to the delays that are frequently experienced by 
 the present mode, the merchant would in this respect have 
 no reason to complain. It is not necessary to my present 
 purpose to enter more fully into all the details which might 
 be requisite to prove the practicability of this mode, by 
 going through the whole payments of the navy, to reduce 
 them to this simple plan ; but from general investigations, 
 as well as from actual experience, I am induced to affirm 
 with conjfidence, that they might all be effected in the same 
 simple, expeditious, and unexpensive manner. 
 
 Payments to be made in cash at establishments distant 
 from town, would be to be provided for on the same prin- 
 ciple. It would depend on the pecuniary conditions that 
 might be made with a local banker, whether it would be 
 most economical that the cash should be furnished by him, 
 or that it should be sent periodically from the Bank of Eng- 
 land ; that is to say, the sum beyond the amount which the 
 tax receivers of the district might pay into the coffers of the 
 local bank, as is practised in France, instead of sending 
 it to town. That unnecessary expense is now incurred in 
 sending money, as you say, " in waggons, under officers, 
 *' called conductors," cannot be denied ; but that this method 
 is as "antiquated and absurd a practice, "may, on a recurrence 
 to facts be doubted, as I have known in the instance of a 
 distant private manufactory, that it was found by the pro- 
 prietor cheaper to receive money for the weekly payment of 
 above two thousand persons by means of a waggon from
 
 15 
 
 town, than to take it from a banker on tlie spot ; I can 
 conceive that it might possibly turn out the same in 
 regard to Government ; and should that be the case, 
 there might probably be found a less expensive mode 
 of transport on Government account than that at present 
 resorted to ; at least it would seem that where a military 
 escort is afforded, there could be no need of civil officers as 
 conductors. 
 
 Supposing the Bank of England to be looked to as the 
 only store-keeper of the public money, many minor 
 arrangements would appear advisable for the convenience of 
 this establishment, no less than of the public. Such for 
 instance, as branch banks, at the great naval and military 
 arsenals and depots, probably a branch at the west-end of the 
 metropolis, for the payment of small sums particularly — and 
 it must be inferred that if private bankers find it worth 
 their wliile to take upon themselves the trouble of small 
 payments alone on private account, the whole concern on 
 public account, of bankers-general for the whole of the 
 public money, could not but be much more advantageous to 
 the Bank of England. The approaching renewal of the 
 Charter of the Bank might afford a fit occasion for making 
 such an arrangement. 
 
 The cashier so charged with drawing on the Bank 
 would, no doubt, in public estimation be considered 
 as an officer of high trust, his salary would therefore be 
 ample, his place honorable, so that individuals in that rank 
 of society to which the public are in the habit of looking
 
 16 
 
 as most fit to be charged with such a duty, and in which 
 ministers are in the habit of placing confidence, would be 
 desirous to accept it, although it would be a place requiring 
 constant attendance on the duties of it. Besides which, a 
 degree of security, in regard to the money-trust reposed, 
 might be obtained far beyond what is usual, by adopting 
 in this country a precaution taken in France, in regard to 
 all public officers entrusted with the receipt or payment of 
 government money; that is, requiring the officer to give 
 security to the amount thought requisite — not the vague 
 security of personal friends, engaging to be answerable for 
 d,eficiencies, — ^but a real, never failing, and immediate secu- 
 rity, namely, the depositing, on their appointment to oflBce, 
 a certain large sum in the public funds, the interest of 
 which they duly continue to receive so long as they are 
 honest and correct, but the capital, or the requisite part of 
 it, becomes the property of government in case of defal- 
 cation. 
 
 The same security might be required wherever security 
 is desired and necessary, in the case not only of cashiers, 
 but in that of storekeepers, and of all others in whose hands 
 it may be requisite that money or goods should be depo- 
 sited. An objection that might be made to this mode of 
 obtaining security, might proceed from an idea of hardship 
 on the persons appointed cashiers, if they had not a suffi- 
 cient disposable capital of their own. But in answer to 
 this, it must be observed, that no such difficulty is expe- 
 rienced in France; money is always to be borrowed by
 
 17 
 
 private persons on good security ; and it may be added, that 
 a man whose probity is doubted by his private friends, can 
 hardly be considered as a proper person to be entrusted by 
 Government. 
 
 At the time when your Committee was sitting, I entered 
 into various details, with reference to the above mentioned 
 outline of a general mode of paying money and keeping 
 accounts, in the expectation of being called to give my 
 evidence, as I had been formerly by the Committee on 
 Finance in 1798. It appeared to me, in consequence of 
 that investigation, that the adoption of such a plan would 
 do away the need for the greater part of the treasurers and 
 paymasters of different offices, and of a great number of 
 clerks, as there need be but one cashier-general for each of 
 the grand divisions of public concerns ; and for money itself 
 there need be but one storehouse, the Bank, in the metro- 
 polis, and its branches in the country, in which money for 
 the use of every department need be kept. 
 
 It will be seen that, in regard to money itself, the same 
 as in regard to money's worth, I place more dependence on 
 a single signature than on a plurality of signatures, how- 
 ever made up. That plurality of signatures, besides being 
 superfluous and expensive, is not efficacious in regard to so 
 simple a transaction as that of authorizing the quarterly 
 payments of salary to an officer, was proved even in the 
 instance of my own office, few as were the persons of which 
 it consisted. It happened that salary bills, in the usual
 
 18 
 
 form, and authenticated by the Navy Board as usual, by a 
 plurality of signatures, were made out to the person who 
 had held the place of architect, for three following quarters 
 after that in which I had given official notice of his death, 
 and after the same Navy Board had, in the same manner, 
 authorized the payment to the widow, as his administratrix, 
 of the arrears of salary due at the time of his death. 
 All these bills for money due, and money not due, were 
 sanctioned as usual, and were in the same manner sent 
 successively from the Navy Office to my office. 
 
 In another instance in my office, the Navy Board wrote, 
 requiring the salary bills of the metal-master for a twelve- 
 month back to be returned, the Board entertaining an opi- 
 nion that they had made out bills for the payment of salary 
 to this officer for a year after he had been dead ; whereas 
 rn this case, the officer in question was still living, and 
 had regularly received his salary quarterly, by means of 
 his own signature, added to the bills demanded back, and 
 which having been regularly made out, must necessarily 
 have received the joint signatures of the Board* 
 
 On the Navy Board's requiring me to send back to them 
 the bills erroneously made out to the deceased architect, I 
 took the opportunity of calling the attention of the Board 
 to the superior efficacy of a common receipt, the substitu- 
 tion of which to their joint signatures to salary bills, was 
 one of the items of reform I had it in view to propose 
 should be carried throughout the whole Naval Department,
 
 19 
 
 as I liad already introduced it relative to some transactions 
 in the Dock Yards. Not that blame can in this respect 
 be attached to the individuals composing the Board, for I 
 know well, from my own experience whilst a member of 
 that Board, that after a long morning of occupation by 
 business essential to the public service, a large parcel of 
 papers were frequently brought in for signature, when 
 there was no longer time for their perusal, or even to en- 
 quire into the subjects they referred to. These papers were 
 nevertheless always necessarily signed by three of us, each 
 one supposing that one of the others might know something 
 of the matter. 
 
 I have therefore no hesitation in affirming, that the 
 whole business of making out salary bills, like many other 
 parts of the routine of business which is made to occupy 
 the time of officers receiving great pay, however much it 
 may serve to add to the apparent importance of their du- 
 ties, is altogether time, and consequently expense, thrown 
 away. 
 
 In judging of the fitness of the manner of keeping ac- 
 counts of public expenditiu-e, it has of late been very usual 
 to refer to the manner of keeping them by individuals in 
 their private concerns ; but in making this reference, it has 
 been more in regard to the form, (which I shall consider 
 farther on, under the head of book-keeping) than to the 
 use of accounts, or to the matter that should enter into 
 them, to which attention has been paid.
 
 20 
 
 In considering the several items in private accounts, 
 which it may be proper to introduce into public account 
 keeping, it seems, in the first place, necessary to keep in 
 mind a circumstance that appears to have been much over- 
 looked; namely, that there are essential differences be- 
 tween, the objects of public departments and those of pri-' 
 vate , merchants or manufacturers. The ultimate object of 
 the, private concern, is that of producing profit as measured 
 by money. The effects which it is the ultimate object of 
 public, concerns to produce, however valuable they may be, 
 or essential to the prosperity and even existence of the, 
 country, and however desirable it may be that a money 
 value should be set upon them, yet they are seldom ex- 
 pressed by a measure in money. The private proprietor 
 of any concern, employs the capital under his command 
 with no other end in view than that of encreasing his profit; 
 all ,the accounts of private concerns must be supposed, 
 therefore, to be so arranged as that the last abstract should; 
 exhibit the profits or loss resulting from the concern, in 
 money : whilst on the other hand, in a public concern, the 
 capital being employed in producing the effects above men- 
 tioned, the accounts must be so arranged as that the last 
 abstract should exhibit what effect has been produced by 
 means of the expenditure of a certain capital. 
 
 The merchant trading with a capital of £100,000, pos- 
 sesses at the end of the year, over and above the return of 
 his capital, a surplus or profit, suppose, of £10,000. The
 
 21 
 
 Naval Department, with a capital of £100,000, has, by the 
 end of the year, exchanged that capital for various items, 
 which have, for instance, entered into the composition of 
 a ship of the line, fitted, rigged, and armed ready 
 for sea. In the mercantile concern, good or bad manage- 
 ment will be shewn by the quantity of money that has 
 been produced over and above the capital employed; in 
 the public concern, good or bad management will be shewn 
 by the comparatively lesser or greater sum of money that 
 has been expended for the obtainment of the ship of the 
 line. 
 
 In regard to the materiel, Government takes the place of a 
 merchant, or that of a manufacturer, according as the articles 
 are purchased ready made, as for instance, a complete ship, 
 built, fitted, armed and rigged, ready for use; or as the 
 materials, previously purchased in a greater or lesser de- 
 gree of preparation, are afterwards manufactured into the 
 different articles of which the ship is composed, or com- 
 bined together so as to form the ship ready for service. In 
 as far as concerns this merely mercantile or manufacturing 
 part of Government business, the details of public accounts 
 should be composed of the same items as enter into the 
 accounts of a private concern; with this diiference, how- 
 ever, that whilst the private account shews the difference 
 in money between the prime cost and the produce or sale 
 price of the article bought and sold, or manufactured and 
 sold — the Government account must shew whether the cost
 
 of the article purchased or manufactured, exceeded or fell 
 short of the cost of the same article obtained by any other 
 means. This will be exhibited by a comparison of the ac- 
 counts of the different modes in wliich the same article has 
 been obtained at different times, in different places, under tlie 
 influence of different circumstances, and under the manage- 
 ment of different persons. In this view it appears that Go- 
 vernment accounts have, in regard to subordinate transac- 
 tions, to keep account of most of the items which enter ha- 
 bitually into a manufacturer's or merchant's accounts ; whilst 
 the abstracted accounts, as they ascend from the inferior 
 branches to the highest, miist essentially differ from mer- 
 cantile accounts. Instead of mere profit and loss, indication 
 must be given of effects produced — ^absolute expenditure 
 compared to efficiency — and consumption of time in the 
 production of effects, with a view to the several objects of 
 efficiency, economy, and dispatch. 
 
 On referring to the accounts of private individuals, it 
 will be seen that several items which enter habitually into a 
 manufacturer's or merchant's accounts, and though equally 
 necessary in the case of public accounts, have not, however, 
 been attended to in government accounts, nor have they 
 been noticed by those who have referred to private ac- 
 counts, as standards of perfection. But, as example is more 
 valuable than bare assertion, some of those items shall be 
 adduced, beginning with that very important item, interest 
 of money.
 
 23 
 
 Interest of money is an item wliicli is well known to 
 enter regularly and habitually into tlie calculations and 
 accounts respecting all mercantile and manufacturing tran- 
 sactions; but which, in regard to public expenditure, in 
 the instance of the Naval Department at least, and I believe 
 equally in that of other departments, seem not to have been 
 noticed ; excepting indeed occasionally relative to cash in 
 the hands of treasurers and paymasters, and sometimes 
 where government have had to pay interest for money 
 advanced on account. Whatever be the amount of capital 
 which any private individual employs in the carrying on of 
 his concerns, whether it be capital originally embarked in 
 the concern from his own resources, dr borrowed for that 
 purpose from others, he does not fail to estimate interest, 
 the yearly rate of which in this country, may oil an avetage 
 be said to be at 5 per cent. 
 
 In regard to public concerns carried on by government, 
 the greater part of the sums requisite are borrowed, and 
 the services on which public money is expended may occa- 
 sionally be considered so necessary, that the requisite 
 capital must be obtained even at the rate of 8 or 10 per 
 cent., instead of 5. On ordinary occasions, it is true, public 
 credit is so good, that capital can be obtained at a less rate 
 of interest than that at which private individuals can obtain 
 it ; but still an interest must be paid, and the paying this 
 interest for a longer time tlian necessary to effect the pur-
 
 24 
 
 pose for which the capital was raised, is evidently so mnch 
 loss. 
 
 This loss, as existing in public concerns, will be found to 
 be immense ; it is a loss which I first exhibited to the view 
 of the superior Naval authority so long ago as the year 
 1796 ; I also indicated it to the Committee on Finance in 
 the year 1798, who seemed very sensible of the importance 
 of it; and I have not failed to endeavour to draw attention 
 to it by the indication of losses, and display of savings, 
 dependent on interest of money, on every occasion that 
 presented itself, down to that of my last official statement in 
 the year 1813.* Nevertheless, as no published accounts had, 
 nor as far as I have been able to learn, have ever been kept 
 to shew their loss, it seems expedient to enter into some 
 details, for the purpose of bringing to view the influence 
 which this important item has on public expenditure. 
 
 Taking, for example, the effect which the value of interest 
 has on the expenditure on what are called public works. 
 So long as the commencement of any given work is delayed, 
 and consequently the expenditure of money upon it, so long, 
 it is evident, the public may be spared taxes, to the amount 
 of the interest on the capital required for the execution of 
 such work — but on the other hand, it may be supposed that 
 no work would be undertaken of which the annual value, 
 when completed, would not exceed the annual rate of in- 
 • See Naval Papers, No. 8, page 18.
 
 '25 
 
 terest on the capital sunk upon it. In this view an attention 
 to economy would require that where a work is wanted 
 immediately, its commencement should be immediate, its 
 execution carried on as rapidly as the nature of the work 
 itself admitted of; and where it is not wanted before 
 ia given future time, it should not be begun upon 
 till the latest time from which its completion might be 
 effected so as to be ready at that future period. No such 
 rules. have, however, been attended to. On the contrary, 
 permanent works, civil-engineering works for example, have 
 been habitually carried on a little one year, a little the fol- 
 lowing, and so on, little by little, for a great number of 
 years. In the instance of a great work carried on in this 
 way in Portsmouth Dock Yard, the whole cost, as it ap- 
 peared in the books, amounted to no more than 591,821/., 
 but it was proved, on calculating the interest that had been 
 paid upon this sum during the many years that elapsed be- 
 tween the commencement and completion of the works, it 
 had amounted to the additional sum of 233,140/., making the 
 real cost of the works not merely 591,821/., which appeared 
 on the books, but really the much greater sum of 824,961/. 
 
 In order to shew how little, even now, such losses are 
 attended to, or avoided, and how easily retrenchment might 
 in this respect be effected, I will refer to examples afforded 
 by the navy estimates of the present year. 
 
 The first article of the extra estimate is 40,000/. for en-
 
 26 
 
 larging the basin, and repairing the mast-pond at Wool* 
 wich, but of which sum only 16,000/. is demanded for this 
 year. 
 
 jl-iiWithout knowing particulars of the plan of this work, 
 my experience makes me feel assured that the whole of a 
 work of this nature, to the amount of 40,000/., might with 
 fecility be executed in a single year. If, as must be sup- 
 posed, from the fact of its being ordered, the works in 
 question at Woolwich are wanted, and consequently of a 
 determinate value to the public equal to, or surpassing, tlie 
 amount of the sum appropriated, the delaying its comple- 
 tion unnecessarily is foregoing the value of it for that time. 
 Reckoning the money sunk at no more than 5 per cent, on 
 the capital, the loss for want of the work would be two 
 thousand pounds a year, imtil it be completed for use ; thus, 
 supposing the unnecessary delay to be no more than a year 
 and a half, the loss upon this work, which might be now 
 avoided, would amoimt to 3,000/. If on the other hand the 
 works are not wanted now, and will not be for two years 
 and a half to come, by forbearing to commence the works 
 for a year and a half, putting the 16,000/. to be expended 
 on it this year, and the 8,000/. to be expended the first six 
 months of next ye^i, out to interest as received, the interest 
 at the end of a year and a half would amount to about 
 1,600/. in addition to the capital of 24,000/., so that the 
 sum remaining to be taken in the last year from the public
 
 would be but 14,400^. instead of 16,000/., and yet the 
 works would be ready for us^, at the same time as if pro- 
 ceeded with as at present. ' ,. / ^., ' ,n re f '■■■ 
 
 The second article in the same estimate, " Plymouth 
 Sound. — For completing the works of the Breakwater, and 
 building a Light-house, 42,000/." 
 
 This work, if completed this year, will have been in 
 hand twenty years. The total sum expended upon it has 
 not appeared in any public document of which I am aware. 
 There has, however, appeared every year successively, in 
 the extra estimate, one item in regard to it, that of the sum 
 wanted "for completing the work;" another item, "the 
 sum that may be laid out during the year,'' and further, 
 from year to year, the sum voted the proceeding one as 
 what "might be laid out," has been deducted from that 
 part of the total estimate which appeared the preceding year ; 
 the remainder has been set down as the sum still neces- 
 sary for completing the work. Thus, on the estimate, the 
 real expenditure does not appear, any more than the varia- 
 tions which in the course of twenty years must have taken 
 place in regard to the amount of the original estimate. 
 
 This work of the Breakwater has probably cost, from 
 first to last, and including all contingent expenses, about 
 two millions. I have no means of knowing the exact sum, 
 but as an example, tins sum of 2,000,000/. may be taken, 
 whether the real sum may have been two or three hundred 
 thousand pounds more or less. Suppose this expenditure of
 
 28 
 
 2,000,000/. to have been equally spread overthe twenty years, 
 the amount expended in each year would be 100,000/. — ^it 
 might have been, in fact, less during the first years, and has 
 been again less the latter ones, but in as far as interest is 
 concerned, for the facility of calculation, it may be con- 
 sidered as having been spread equally — the interest on 
 100,000/. is 5,000/. per annum, adding this interest to the 
 100,000/. spent the first year, as also the 100,000/. 
 expended the second year, and so continuing to compound 
 the interest upon capital expended, adding annually to the 
 capital sunk 100,000/., it will be found that at the end of 
 twenty years, the work will have cost, not the nominal two 
 millions, but in point of fact 3,306,595/. 8s. Supposing 
 this work had been capable of being executed, from com- 
 mencement to completion, in a shorter time than twenty 
 years, say five years, the amount of the real cost of the 
 work, two millions, being as before taken as the nominal 
 expense of it, would then have been, including interest, no 
 more than 2,210,252/. 10s. ; so that on this single work an 
 attention to the value of interest on sums expended, would 
 have saved to the nation no less a sum, in round num- 
 bers, than a million. The loss the public was sustaining 
 for want of the work, which if eight per cent, be a reason- 
 able estimation for justifying such expense, would have 
 been 160,000/. a-year, so long as the obtainment of the 
 use of the work was delayed. 
 
 Other considerations, some that apply to all works, some
 
 29 
 
 only to' peculiar works, might also have rendered it 
 advantageous to have hastened this work — such as to save 
 payment of superintendance, a costly item in this work, 
 but the persons employed for which needed not, as to 
 the more expensive ones, have been increased, however 
 expeditiously the work had been carried on; and in a 
 work of the nature of the one in question, the great risk, 
 during execution, of damage in consequence of storms, 
 entailing extra expense, should of itself point out the 
 advantages of expedition. Had the attention of those who 
 ordered the work, or of those who had part in its direction, 
 been called to the amount of interest on the capital expended, 
 or to the amount of the value of the use of the work, by which 
 the authority for executing it must have been grounded, the 
 question, it can hardly be doubted, would have arisen, of 
 whether it should be begun, as it was, in the year 1811, so 
 soon as it was decided on, and carried on with all possible 
 expedition ; or whether, the collection of the money being 
 then commenced, it should, as received, be laid by at 
 interest, till the time should arrive, a few years later, when 
 although the obtainment of the value of its use had been 
 postponed, the capital thus collected and increased by 
 interest, should enable the work to be begun and carried 
 on to completion, so as to have diminished the actual 
 expense of its obtainment by a third of what has been its 
 real cost. 
 
 The third article in this year's extra estimate is the
 
 30 
 
 Cliapel at Pembroke, estimated 4,000/., tliis year's grant 
 being 2,000/. of it. 
 
 It is evident, a half-buiit chajiel woiild not be used,"ati3: 
 there seems no doubt that one year, if not half-a-year, 
 might suffice for its erection. The* rent upon a chapel 
 costing 4,000/. would, at five per cent., be 200/. per annum,' 
 if at eight per cent;^ 320/. If Government be now paying 
 only 200/. a-year for the hire of a chapel, the ne±t y^ar'sr 
 rent will necessarily be so much loss incurred by the non- 
 completion of the new one this year, as also a further loss 
 of the interest, •i'OO/. on the money spent on the work this 
 year. If Government pay no present rent for a chapel at 
 Pembroke, and suffer no inconvenience from the want of 
 one, although there be a chaplain, then the loss is no more 
 than the 100/. interest on the money advanced this year 
 unnecessarily. 
 
 On the other hand, to shew the advantages, in point of 
 economy, actually derived, in the instance of private works, 
 from dispatch in their execution, the St Katharine's Docks 
 afford an example the more appropriate, as the capital 
 spent, about two millions, is the same as that laid out on 
 the Plymouth Breakwater. The capital was subscribed for 
 the Docks in July 1825, nearly two years were spent in pre- 
 parations, such as purchase of the scite, pulling down 
 buildings, &c. ; the first stone was laid in May 1827, the 
 whole work is expected to be completed by next May ; 
 thus the whole time spent upon this work will have been
 
 ai 
 
 less tlian five years ; and the whole cost, including interest 
 at five per cent., as I have reckoned in the case of the 
 Breakwater, will have been the above-mentioned sum of 
 2,210,252/. 10s, 
 
 If the construction of these Docks had been, as in the 
 case of the Breakwater, protracted over a period of twenty 
 years, besides the actual cost which would have been in- 
 creased from the above sum of 2,210,252/. lOs. to that of 
 3,306,595/. 8s. ; the Company would, moreover, have been 
 deprived of fifteen years' earnings, which reckoning at only 
 5 per cent, would be 100,000/. and redtoning, as may fairly 
 be done in this instance, at 8 per cent., would amount to 
 160,000/. 
 
 There seems no need to go on with other examples. 
 Whether the expenditure be of hundreds of pounds only, or 
 of millions, by delay of the work, if wanted immediately, or 
 by a too early commencement of it when not wanted till a 
 future period, or when money cannot be obtained for it but by 
 driblets, the loss must always be in proportion to the capital, 
 and to the un timeliness of its expenditure. This loss is there- 
 fore an item which it appears necessary to bring to view by 
 the accounts of public expenditure, as a very efficient means 
 of reduction, whether as a guide to Ministers in asking for 
 grants, or as satisfactory data to the public in according them. 
 
 It was in conformity to this principle, that with Earl 
 Spencer's approbation, after ample discussion, I prepared 
 the extra estimates, for architectural and engineering
 
 32 
 
 works, in the years wlieti I was looked to for them. No 
 money was then called for, nor expended upon a variety of 
 these works, which had been formerly carried on little by 
 little, from year to year, but the whole money likely 
 to be granted, and the whole efforts of the contractor likely 
 to be obtained, were assigned exclusively to the one work, 
 then considered the most important because promising the 
 greatest annual savings, namely, the providing the deep 
 basin and docks in Portsmouth Dock Yard.* 
 
 But it is not only in regard to permanent works, of the 
 nature of those brought as examples, that the importance of 
 taking interest into account may be seen. It influences on 
 the purchase of all stores. An article originally purchased 
 at a cheap rate may, on account of the loss of interest on 
 the prime cost during the time it is kept on hand, bring it 
 at length to a very dear one. It is a calculation particu- 
 larly requisite in time of peace, in regard to all stores 
 capable of being expeditiously manufactured in our ar- 
 senals, or of which a supply might be found in the market 
 on the breaking out of war, although at a dearer rate — it 
 influences materially on the eligibility of one or another 
 mode of seasoning timber f — it points out the economy of 
 
 * Naval Papers, No. 8, p. 49. 
 
 f The expense in interest of money, in seasoning the quantity of timber 
 and plank requisite for a first rate, according to the present mode,amounts 
 to about 7,000/. ; whereas by another mode of seasoning timber, this 
 expense might be reduced to less than 1,400/., making a difference in
 
 33 
 
 making use of every accommodation and article of public 
 property, in time of peace, wherever any collateral use can 
 be found for them, that would pay interest on the capital 
 and wear and tear of the article in question.* In short, it 
 has seemed unaccountable, that an item so constantly at- 
 tended to in private concerns, should have escaped the 
 notice and animadversions of the many persons competent 
 to judge on this particular, amongst those who have in- 
 terested themselves in matters of finance, and the more so, 
 as savings in point of interest are attainable without di- 
 minution of the income or comfort of any individual. 
 
 Independently of interest, there are many other items 
 not usually taken into account, and by the omission of 
 which the accounts cannot exhibit the real and whole cost of 
 — perhaps I might say — any article of the materiel, or service 
 of the personnel. Taking for instance, the accoimts of timber, 
 even when price is mentioned, no additions are made on 
 account of the expense of receipt and storing; of rent of 
 the ground on which, or buildings in which, it lies to season, 
 or is kept for security; of loss by decay or otherwise, during 
 seasoning or keeping in store; nor often of the cost of 
 freight, especially on transport from oiie arsenal to another. 
 Some of these items may indeed be too small in amount to 
 
 the cost of the timber for such a ship, of about 5,600/. See Naval 
 Papers, No. 6, page 25; No. 8, page 18. 
 
 * See United Service Journal, for Jan. 1830, page 41, on the em- 
 ployment of Government vessels for the transport service.
 
 34 
 
 be worth the expense of reckoning in regard to each single 
 article, still it is necessary to draw attention to even these, 
 by adding a per-centage on the original price. Indeed, on 
 referring to Naval Papers, No. 2, page 65, it will be seen 
 that in one instance at least, owing to the total disregard to 
 the price of carriage, four shillings a load more was actu- 
 ally paid for the carriage alone of timber from one of the 
 King's forests to Portsmouth Yard, than the established 
 price at that dock yard to timber merchants for furnishing 
 such timber, " purchase-money, profit, carriage, and all 
 " other expenses included." On the occasion of bringing 
 that transaction to the notice of the Admiralty, what I 
 pointed out as most worthy their Lordships consideration 
 was, that " in respect to so important a branch of duty 
 " as that of the providing stores for the use of his Ma- 
 " jesty's dock yards, whatever may be the mismanagement, 
 " the duties of the persons concerned are so ill defined, and 
 *' their instructions so insufficient, that there is no one in- 
 " dividual on whom the blame can be fixed." I had already 
 said, that " it would appear, on a full investigation, that 
 " abuse and mismanagement had been the natural conse- 
 *' quence of defects in the system of management;" and I 
 added my persuasion that, " when the accounts of all trans- 
 " actions shall be kept in such manner as to bring their 
 " comparative economy to observation, all such abuses 
 " would in future cease of course."* 
 
 * Naval Papers, No. 2, page 59. 
 
 I
 
 In regard to the cost of permanent works, the accounts 
 do not specify regularly and uniformly, if ever, the time at 
 which the money is expended on a work, nor the time 
 when it is completed ready for service, nor the time when 
 confided to those who are to make use of it, nor the ex- 
 pense of maintaining it in a state fit for service. 
 
 For the remedying all these defects, which I consider to 
 be of no inconsiderable importance, I had proposed new 
 forms of accounts, as well as arrangements for abstracting 
 them and bringing them up.* As an example to shew 
 the need of these proposed accounts, in point of economy, 
 and of paying attention to the particulars above Men- 
 tioned, the deep basin and docks in Portsmouth yard may 
 afford an instance the more relevant, as it was in regard to 
 these works that, in conformity to my proposals, the Ad- 
 miralty were pleased to give orders that accounts should be 
 kept, such as should excite attention to the putting these 
 works to the fullest use, but which order was however evaded. 
 
 The expense to be incurred for the enlargement and 
 deepening of this basin, according to my plans, together 
 with the construction of two deep docks within it, and the 
 formation of three long jettees, was 231,000/., but for the 
 sake of facilitating calculation, say the round sum of 
 300,000^. This as a private concern, to be a beneficial 
 
 * Naval Papers, No.3, pages 135, 113 to 119, 125 and 6; No. 8, pages 
 1, 2, 5 to 9, 17.
 
 36 
 
 one, must have paid a rent of five per cent, on the 
 
 capital expended, and not to favour the work, five per 
 cent, may be added to cover wear and tear, chance of 
 disuse, and to produce a profit; together, an annual rent 
 of 30,000/., at 300 working days in the year, 100/. per 
 day. The extra depth given to the basin and docks 
 was such as enabled ships of the line, with all their stores 
 on board, to be taken into them at any time, neap as well 
 as spring tides, instead of being necessarily, as theretofore, 
 dismantled before they could be brought into dock at all, 
 and then only at spring tides. The business for which the 
 basin and docks were wanted, was the receiving ships com- 
 ing in from sea for sKght repairs, for the examination of 
 the bottom, cleaning and repair of the copper, besides other 
 small repairs to the bottom ; businesses very frequently re- 
 quiring not more than two or three days, sometimes oply a 
 few hours. Before the construction of these docks, the 
 preparatory work of dismantling a ship, taldng out her 
 stores and guns, and the replacing the whole afterwards in 
 a state fit for service, might well employ eight or ten days, 
 which, with the chance of as many more in waiting for 
 spring tides for coming in or going out, might altogether 
 occasion a detention of the ship for twenty days, for doing 
 the work of two. The interest on the capital sunk on a 
 ship of the line, with the daily proportion of that capital 
 used out, if it may be so called, as the ship advances in age, 
 may be called 40/. per day, and the cost of the crew 90/.,
 
 37 
 
 so that 130/. per day may be estimated as the daily expense ; 
 and the amount of demurrage, for eighteen days, would there- 
 fore have been no less than 2,340/. By means of the new 
 docks, a ship of the line not only might, but actually did, 
 come in from sea and go into dock with all in on the same 
 day, and go out to her station at sea the next, the little 
 work to be done to her bottom being finished. Supposing 
 such a demurrage to have been saved but ten times in a 
 year in each of these docks, the cost of the whole work 
 would have been repaid in between six and seven years — or 
 would have been earning beyond a rent of 30,000/. a year, a 
 clear profit of 16,800/. a year; not including the other uses 
 derived from the basin and jettees, such as might enable, 
 and in the year 1799 actually did enable, " four ships to be 
 " fitting in the basin at once, and three fitting at the jettees, 
 *' the difference, in point of dispatch, being half the time 
 *' required for fitting them at moorings, and the cost of 
 " workmanship at least a third less." And to this pecuniary 
 saving and profit, must be added the incalculable advan- 
 tages which, in time of war, may be obtained by dispatch 
 in the execution of repairs and fittings of this nature.* 
 
 Accounts, such as those in question, shewing the rent 
 paid for accommodation, and the need of putting it to the 
 fullest use to repay that rent, would lead to many unex- 
 pected reductions. A dock, for instance, would never be 
 
 * Naval Papers, No. 2, page 42 ; No. 3, page 
 
 117.
 
 ^8 
 
 left empty while any use for it could be found, and the 
 same ship Avoidd not be left in the same dock for five or six 
 years for want of hands, whilst new slips and new docks 
 were building elsewhere. A further saving of rent and of 
 demurrage would be seen to be attainable, by putting as 
 many hands at a time to the work carrying on as could be 
 advantageously employed upon it, so as to complete the 
 whole in the shortest time. It would also indicate the loss 
 incurred by limiting the working-time whilst day-light 
 lasted, to the usual working hours. It would suggest the 
 prolonging in summer the working-time, by means of a 
 double set of hands, so as to make use of all the day-light, 
 or even the rendering the work incessant, by the aid of 
 artificial light. Such an improvement once admitted of, it 
 would then be perceived that our existing arsenals are ade- 
 quate, in extent of accommodation, to the performance of 
 double the quantity of work that has ever been done in 
 them, even in time of war ; thus producing the same effect 
 as if they were all at once, as if by magic, doubled — and 
 that now, in time of peace, any expense incurred for the 
 farther extension of our existing naval arsenals, is, in fact, 
 so much money thrown away.* 
 
 * See Naval Papers, No. 5, pages 11, 13; No. 6, pages 27 to 47.
 
 39 
 
 BOOK-KEEPING. 
 
 It appears from what you say on the' subject of book- 
 keeping, as also from what I have collected from other 
 recent publications, that all are agreed as to the need of 
 keeping accounts more correctly than heretofore ; and that 
 the mode of book-keeping has become, in regard to the 
 several public establishments, a question exciting very ge- 
 neral interest, although much difference of opinion, with 
 some appearance even of hostility, in discussion, has been 
 entertained as to the mode to be preferred, — without the 
 difference between one and the other mode having ever 
 been clearly shewn, or even perceived. I am not an ac- 
 countant by profession; I can have no predilection for 
 Italian, English, or any other mode of book-keeping, far- 
 ther than as the one, more than the other, may be shewn to 
 afford the information required with the greatest clearness, 
 and at the least expense of time and money. Clearness in 
 the accounts relative to public expenditure, seems the 
 more necessary, as in order that the public may derive full 
 benefit from them, it is essential that they should be intel- 
 ligible and instructive, to a number of persons who are not 
 expected to have acquired any accountant knowledge be- 
 yond that in use for their domestic concerns, but who
 
 40 
 
 nevertheless are necessarily entrusted with the manage- 
 ment of these securities against inefficient expenditure; 
 and, for these reasons, I cannot but prefer that mode of 
 book-keeping which has the fewest teclmicalities, if it be as 
 good in other respects. 
 
 In regard to the Italian mode of book-keeping, which 
 you seem so decidedly to prefer, although not explained in 
 your work, being desirous of satisfying myself that I had 
 not mistaken its peculiarities, I have taken various means 
 of enquiry, and have referred to several books on the sub- 
 ject; but on the present occasion, I shall select for refer- 
 ence the Encyclopedia Britannica, as being a popular work 
 likely to be in many hands. 
 
 On reference to the article, " Book-keeping," I find that 
 the distinguishing property of this mode is, that it is 
 carried on by what is denominated double entry. To render 
 clear what I have to say on this subject to persons not 
 accountants, I may be excused making a few extracts from 
 that work, showing the nature of this mode of book- 
 keeping. 
 
 The Italian method will be found to require " three 
 principal books." 1st. A book denominated the " Waste 
 Book, or the Day-book," 2nd. " the Journal," and 3rdly, 
 " the Ledger." The waste-book or day-book, (which latter 
 name appearing to me the most appropriate term, I shall 
 continue to use; waste-book being at the same time the 
 most inapproj)riate for a book to be preserved as evi-
 
 41 
 
 dence) " contains an exact register of all occurrences 
 in business, in the same order as they take place." The 
 journal, (like the day-book) is a fair record of all the 
 transactions, but taken from the day-book, and entered " in 
 the same order as they stand there, but expressed in a 
 technical style." In the ledger, the arrangement is different, 
 " articles of the same kind are collected together, and for 
 that purpose it is divided into many accounts, under which 
 the diff'erent branches of business are arranged. Each 
 account is introduced by a proper title, to explain the nature 
 of the articles it contains;" and "on the opposite pages of 
 the same sheet are placed, money received on the one 
 side, and money paid on the other; or goods bought or 
 received on the one side, and goods sold (or otherwise 
 disposed of) on the other." 
 
 Thus it appears, that the Italian mode of book-keeping 
 has acquired its appropriate term of double entry, because 
 according to it, two entries of the same facts, in the same 
 order, are made in tivo books, one called the day-book, the 
 other the journal; in the one, the day-book, the entry is 
 made in terms of ordinary language, being such as are the 
 easiest set dowTi and understood ; but in the other book, the 
 journal, the same facts are again entered in the same order, 
 but translated into a technical language, well known to be 
 wholly unintelligible to many, and little understood by any 
 but tlie few who make it the object of their special study — 
 a language the more objectionable, as the terms employed
 
 42 
 
 being in common use for expressing other ideas, require, on 
 this occasion, their signification to be changed, before they 
 can be made to render the facts intelligible. 
 
 It has been supposed by many, that the system of double 
 entry did not depend on the peculiarity I have described, 
 but on the arrangement of items from the day-book in 
 another book, the ledger, putting all sums and articles 
 received on one side of the book, and all those expended on 
 the other side ; but this arrangement will be found equally 
 to take place in the ledger, when books are kept by single 
 entry. 
 
 To give a better idea of the difference between the two 
 languages used, here follow examples taken from the 
 Encyclopedia Britannica, in exemplification of double 
 entry. 
 
 According to the terms used in the day-book, an entry 
 appears in it, " Paid John Bell, in full, 521." A record of 
 the transaction which, it appears to me, is expressed in as 
 few words as possible, and in the most familiar terms ; 
 intelligible, I will venture to say, to every boy who might be 
 employed to record the transaction, and equally so to every 
 one who might afterwards have occasion to look to it for 
 information. 
 
 The same transaction is entered in the journal, thus 
 translated, " John Bell, Dr to Cash, paid him in full, 521." 
 Here are, in the first place, nine words employed to express 
 what was in the day-book expressed in five — 2nd, A fictiti-
 
 43 
 
 ous personage is created, under the name of Cash ; a fiction 
 which the uninitiated in the mysteries of double entry 
 would not deem essential to perspicuity ; and after having 
 enlisted this fictitious personage into the service, it would 
 not easily be comprehended by the uninitiated whether 
 Bell had paid the sum to Cash, or whether Cash had paid 
 it to Bell. Such a book as this journal, I therefore look 
 upon as worse than useless ; in many important lights, as 
 mischievous ; — mischievous on account of the extra time 
 employed in writing such a journal ; much more mischiev- 
 ous on account of the need required by it of engaging 
 clerks possessing peculiar talents, instead of the ordinary 
 ones of reading, writing, and casting accounts correctly, 
 which extraordinary talents must be much more highly paid 
 for; — and still more mischievous, by reason of its unaptness 
 for the object of accounts, that of affording intelligible 
 information. What originally could have induced mercan- 
 tile men to give themselves this extra trouble of learning 
 and making themselves familiar with this mode of book- 
 keeping, and of writing every transaction in the journal, 
 does not appear; but what presents itself as tlte most 
 natural and probable is, that of a wish for concealment of 
 their transactions, a material object in private mercantile 
 transactions ; but in regard to public concerns, no such 
 motive seems justifiable ; and great mischiefs must neces- 
 sarily be the result, if the technicality and source of ob- 
 scurity introduced in the journal by the Italian mode, were
 
 44 
 
 transferred throughout into all the accounts in which 
 officers, ministers, and Parliament are to refer, for what- 
 ever information they may require relative to the manage- 
 ment of public concerns. 
 
 There is, however, one defect in accounts as kept by single 
 entry, although it be not inherent in the principle itself; 
 namely, that entries of all kinds are usually made in. one 
 ledger, at most under two heads ; the one called the perso- 
 nal account, containing all accounts with persons, goods, and 
 money — the other, the cash account, containing no transac- 
 tions but such as relate to cash. Thus no separate account is 
 kept as to any particular article of profit and loss, or of re- 
 ceipt and disposal. The ledger, on the principle of single 
 entry, is, however, quite as susceptible of arrangement, by 
 which articles of the same kind are collected together, and 
 balances of them struck, as is the ledger where accounts 
 are kept by double entry. By a column of reference, as 
 used by Messrs. Brookman and Beltz, reference may be 
 made backwards and forwards from the day-book to the 
 ledger, and vice-versa, the same as where a double entry 
 had been made by previously transferring the items from 
 the day-book to the journal. 
 
 It is this more perfect ledger that I have in view when 
 speaking of single entry, and I conceive it to be divided 
 into as many books, and under as many heads, as the nature 
 of the transactions to be kept account of, may for tlieir 
 elucidation require ; as also that the entries be made in it
 
 45 
 
 « 
 
 by a book-keeper, not the same as that one who made the 
 entries in the day-books, so as that every item of account 
 being entered by two different persons in two different 
 books, a great advantage is obtained in point of cor- 
 rectness. 
 
 To me it appears, that according to the description given 
 above, and the same whether by double or single entry, the 
 day-book and the ledger are the two forms of books re- 
 quisite, and the only two, into however many different heads 
 the ledger may be divided, or however many copies of 
 them may be required for use in different places. 
 
 The day-book being that in which facts are recorded as 
 they arise, in language the most simple, and without any need 
 of thought or abstraction of mind with a view to idterior 
 classification, is the least subject to error; and the wiiting 
 it is an operation that can be performed by any man or boy 
 of ordinary understanding, who can hear well, read what is 
 before him, copy exactly, and write a fair hand. The purpose 
 of the ledger, as appears from the above description, is the 
 classing and exhibiting the facts already recorded, under such 
 heads as shall exhibit transactions of a similar kind, in a 
 similar form, either as regarding money or money's worth. 
 The facts or transactions are arranged in it under tw^o lead- 
 ing divisions, one exhibiting the receipt of property, the other 
 the disposal of it. In these two books, or sets of books, every 
 thing therefore is to be found that is required in accounts ; 
 recordation in the day-books, classification in the ledger.
 
 46 
 
 For the same reason that it appears to me better that the 
 technical terms in the instances above adduced should be 
 avoided, so should all other technical terms, whenever 
 terms in common use for the same idea can be employed. 
 Instead of debtor and creditor, the terms that present 
 themselves as being in common use, and as being better 
 suited to public accoimts, which have for their subjects 
 goods as M'^ell as money, are the terms received and disposed 
 of; more particularly as the manner of disposal of articles 
 in public concerns is often for a return of value but ideal. 
 
 All such entries as " Sundries debtor to Paper" would 
 thus be done away with, as producing obscurity ; although 
 the term sundries, being a common and comprehensive 
 term, might perhaps be sometimes employed in making 
 abstracts to save the trouble of enumerating small items. 
 And as to services, the simple facts of what service, by whom 
 performed, at what time begun, when completed, at what 
 rate and when paid for; so as to the materiel, of what nature, 
 at what price, when received, what quantity, from whom, 
 when paid for, how disposed of, would be intelligible to all, 
 and ready for any use requisite to be made of accounts. 
 
 In a large establishment, where the transactions are ex- 
 tensive, some division might with advantage be made in the 
 accounts, even from the first entries in the day-books. Of 
 this description are, for example, in a naval arsenal, such ar- 
 ticles as timber, iron, copper, or the wages or salaries of the 
 personnel ; each of which items might have its separate
 
 47 
 
 day-book ; and so much the more conveniently, as one or 
 two of these items would usually furnish ample employ- 
 ment for a clerk. So in that branch of the accountant- 
 office, where cash pa}Tnents might be made, there might 
 possibly be a day-book for ready money payments, another 
 for bills drawn at future dates, and another for simis advanced 
 on account. Every day-book should have a column for 
 references to the ledger, into which the several items would 
 afterwards be posted, as that ledger would again have 
 colmnns for reference to the day-book. 
 
 The not balancing accounts with sufficient frequency ap- 
 pears to me to be a defect in book-keeping common to 
 almost all methods, and to the very general practice ; and 
 it would seem that the more complicated the accounts, the 
 less frequently are balances struck, although in such cases 
 frequency is most required. This defect may probably 
 have originated in the uninterrupted use made of the day- 
 books, so as not to leave time to the clerk who keeps it to 
 make entries from it in the ledger, nor to admit of its being 
 put into the hands of another to perform this operation, 
 until the day-book was filled up, and a new one taken. 
 It appears to me that this difficulty might be obviated, 
 either by having separate clerks to post the books daily, 
 after the transactions of the day were over, or before those 
 of the succeeding day began — or by keeping two distinct 
 day-books for alternate days, weeks, or months, as the case 
 might require. Thus the books for Mondays, Wednes-
 
 48 
 
 days and Fridays, for instance, would be at liberty for 
 being posted on the Tuesdays, Thursdays and Saturdays, 
 and the day-books used on those days might be posted out 
 on the three others. The same object might be effected by 
 the adoption of the practice sometimes resorted to of mak- 
 ing the original entries on loose sheets, afterwards pasted, 
 or otherwise attached together in a book ; but this mode 
 appears highly objectionable, not only on account of the 
 real danger of loss of the loose document, or substitution of 
 a false one, but also as leaving constantly room for suspi- 
 cion of falsification — in the one case injurious to the pubKc, 
 in the other case to individuals. 
 
 The accuracy of the most abstracted accounts, as for 
 instance, those which are laid before Parliament, must 
 depend on the correctness of every item in all the accounts 
 from which they are taken, in every degree, down to the last 
 minutiae that are taken account of. It is with these minutiae 
 then that the reform of books should begin, rising step by 
 step to more condensed and more abstracted books, until 
 ending, instead of beginning, with those laid before 
 the superior authority. Whenever such a mode of reform 
 is systematically began upon, the facility of making it, 
 and the perspicuity attendant on it, will, I will ven- 
 ture to assert, become so evident as to do away that con- 
 trariety of opinion which now exists in regard to this or 
 that method of book-keeping. It will be found, that many 
 existing forms are not ill suited to their purpose, such as
 
 49 
 
 some in the Ordnance accounts, as given in the appendix to 
 your second report, and a few of those in the naval depart- 
 ment, some are capable of being employed, although many 
 of them are altogether useless. 
 
 The general idea that simplicity and perspicuity in 
 recordation and abstraction are the objects to be aimed at in 
 book-keeping, should be constantly pursued in the case 
 of every accoimt. In each case, when it is to be considered 
 how far the accoimt answers the purposes intended, or what 
 reform is needed in the mode in which it is kept, the first 
 questions to be put are, what is the object of that particular 
 account ? What are the results it is intended to exhibit ? 
 The answers to these questions will readily point out imder 
 what heads, and in what particular form, the items should 
 be entered, so as to exhibit those results in the simplest and 
 most intelligible manner.* 
 
 * The subject of book-keeping in general, with reference to public 
 accounts, is treated in great detail by my brother, Mr Jeremy Bentham, 
 in his Constitutional Code, chap, ix., sec. 7, Statistic Function, 
 (v. 1, p. 274) just now published. This section contains in particular, 
 a most comprehensive view of the several items necessary to be taken 
 into account in regard to every department of public business.
 
 50 
 
 GOVERNMENT MANUFACTURES. 
 
 It has already been observed, that in the instance of the 
 naval department at least, the expenditure for providing 
 the materiel may be considered as at least equal to that for 
 engaging the services of the personnel ; it becomes there- 
 fore of the first importance to consider the most economical 
 means of providing the necessary materiel, and with that 
 view to investigate a question wliich seems to have been 
 much agitated in your committee, — whether the several ar- 
 ticles of the materiel in general, or at least the greater 
 •part of them, should be provided as raw material, and be 
 manufactured into the state complete for use on govern- 
 ment account, under the inspection of officers in the pub- 
 lic service, or whether those articles should be obtained by 
 contract or purchase, in a manufactured state, ready for use. 
 
 The practice of manufacturing on government account, 
 you admit, is attempted to be defended on the ground that 
 articles are provided in this way cheaper and better than 
 they could be provided by contract ; but you proceed to 
 affirm " that such a defence rests on what is morally impos- 
 " sible." It has on the contrary been an opinion which I 
 have long since entertained, and brought forward, and 
 which after repeated investigation and consideration of the 
 subject, I am induced again to affirm, that most articles used
 
 51 
 
 by Government may be manufactured on Government ac- 
 count, at an expense much less than that at which they can 
 be obtained from private manufacturers ; and that all the 
 articles most essential to the success of our naval and mili- 
 tary establishments, so manufactured, may be rendered 
 much more trustworthy and suitable for their intended pur- 
 poses than they are likely to be if procured by contract. It 
 can be proved, that a variety of articles have been manufac- 
 tured in his Majesty's naval arsenals, both cheaper and 
 better than similar articles provided about the same time 
 by contract; and I feel no doubt that, by extending this 
 practice to a variety of other articles, an annual saving may 
 be made in public expenditure far greater in amount than 
 has ever been held up to view as practicable, by any pro- 
 posed reduction either in the personnel employed in the civil 
 departments, or even by any other reduction admitted to be 
 attainable, in regard to the expenditure, for any civil purpose 
 in the navy. 
 
 The statements on which you ground your assertion of 
 the advantages of obtaining articles ready manufactured, are, 
 that " private manufacturers can buy materials cheaper, and 
 " take better care of them ; they can get labour cheaper, 
 *' make it go farther, and superintend it better, and at a less 
 " expense than any public office. The success of any public 
 " office in manufacturing depends on what it is impossible to 
 " accomplish, namely, to find niunbers of officers willing to 
 " work ynth the same zeal and integrity for the public that
 
 52 
 
 " they would work for themselves — that the slightest defi- 
 " ciency in skill, activity and integrity, on the part of the 
 " public officers, in performing the several operations, from 
 *' their going to market to buy a stock of raw materials, to 
 " the storing of the goods to be made with them, will be 
 " taken advantage of by numbers of persons in numberless 
 *' ways.*' You then repeat that, in regard to materials, 
 " they will be bought in too dear, will be wasted in work- 
 " ing them up, and will be liable to be stolen or damaged." 
 Then again you proceed to affirm, in regard to manufac- 
 tured articles, that such of them as are manufactured on 
 Government account " will be more exposed to be wasted 
 " and stolen than if purchased by contract, from the diffi- 
 " culty of keeping equally exact accounts of the quantity 
 " received and delivered;" and, in confirmation of these 
 assertions, you add, " although the victualling and other 
 " offices that carry on manufactures produce accounts, by 
 " way of shewing that they make them cheaper than they 
 " can be got by contract, this does nothing towards sup- 
 " porting their case, because their accounts are all kept in 
 " so imperfect a manner that they cannot be relied on." 
 
 First, in regard to the purchase of articles in the state of 
 materials, I have to observe, that the officer trusted to for 
 the purchase on Government account, who may be called a 
 public purveyor, has the same means of enabling him to 
 judge of the true value of materials that a private manufac- 
 turer has. There is published in London, at least, a
 
 53 
 
 weeldy price current of almost all the materials that could 
 be required; doubtless there are other means equally in- 
 structive as to the price of most articles in other great com- 
 mercial towns, and in regard to some articles, such as cop- 
 per, prices are periodically printed, which although 
 expressly for the use of private manufacturers, would 
 be equally obtainable by the public purveyor ; besides 
 which, I always found it easy to obtain all the requisite 
 information relating to the value of materials from a 
 number of liberal and commercial men ; and eve ])rivate 
 manufacturers, when once the principle of manufacturing on 
 Government account were generally adopted, would be the 
 more disposed to furnish information and advice when 
 called for, as they should feel assured that they could 
 entertain no hopes of furnishing the article in a manu- 
 factured state. It must also be remembered, that the 
 articles must be purchased in some state ; and if the pur- 
 veyor be liable to be deceived, better that he should be 
 so on the raw material than on the article in its much 
 more costly manufactured state. 
 
 Secondly. — Articles in the state of materials being in 
 more general use, and more in quantity, there would also 
 be a far more extensive competition for their supply, 
 than in the case of the same articles in the manufactured 
 state. 
 
 Thirdly. — One and the same material is generally ap- 
 plicable to a variety of purposes, so that if after having
 
 64 
 
 laid in a stock, any cliange in the dinnand should render 
 a material no longer wanted for the purpose for which 
 it was provided, it may be employed for some other pur- 
 pose ; whereas an article brought to the manufactured 
 state is usually required only for one purpose, and any 
 change of circumstances may occasion a great store to be 
 kept uselessly on hand, or sold at a great loss. 
 
 Fourthly. — In regard to the more important consider- 
 ation of quality, the fitness of an article for service, in 
 as far as regards the material, is much more easily 
 examined into, and submitted to certain tests of goodness 
 by which its quality can be judged of, whilst in the state 
 of a raw material, than in its manufactured state. 
 
 Fifthly. — Should any extraordinary monopoly or other 
 circumstances enheince the price of a material unreasonably 
 in our markets, Government can occasionally have recourse; 
 to a supply from foreign countries, free from many re- 
 straints which might shut up from an individual such 
 source of supply;* an expedient which might be found 
 much more difficult and obnoxious, and in general much 
 more objectionable, in the case of a manufactured article. 
 
 * This expedient was had recourse to in the year 1806, when by this 
 means, and that of having a stock of copper on hand at Portsmouth, 
 there is every reason to believe the then existing monopolising price 
 was put a stop to; and the consequent saving to- Government, in the 
 article of the material of copper in sheathing alone, amounted to 
 38,000/. per annum. — See Naval Paper;j, No. 2, page 71 and note.
 
 55 
 
 It is true that the present mode in which purchases are 
 made by contract are in many respects ill suited to the ob- 
 tainment of any article at a just price. For these thirty 
 years past I have, on various occasions, called the attention 
 of the superior authority to these defects, and suggested 
 such measures as appeared applicable to the obviating 
 them. I have proposed for example : First, — A mode of 
 advertising for contracts, and receiving tenders, less repug- 
 nant to competition than the present one. Secondly, — 
 Simplicity in the mode of expressing the price of articles, 
 instead of the present additions and substractions of per- 
 centages on former prices, and other complications, which 
 render the real price offered or paid scarcely intelligible to 
 many who are thus deterred from becoming competitors. 
 The obscurity as to the real sum contracted for is further 
 encreased by delays in making out bills, by payment by bills 
 at a future period instead of ready money, by fees of office, 
 and other circumstances, which can only be fairly taken 
 into account by the few who are long accustomed to this 
 mode of contracting. Thirdly, — Taking off all unneces- 
 sary restraints on contractors, which, without insuring 
 either quality or timeliness of delivery, require to be 
 compensated by an increase of price. Fourthly, — Requir- 
 ing the fixing the delivery of the articles at such a period 
 as may enable contractors, who have not the advantage 
 of previous intimation, to enter into competition for the 
 supply. Fifthly, — The fixing the time of delivery of certain
 
 5(T 
 
 portions of tho whole quantity by certain days, instead of, 
 as under the present system of contracting for the delivery 
 of the whole by a certain day, by which the contractor, 
 when the article happens to be at a low price, loads the 
 public with an anticipated supply, for which he obtains im- 
 mediate payment, thus entailing a considerable loss in useless 
 interest ; and on the contrary, when the articles are dear, 
 delays the supply, so as either to cause works to be retarded 
 for want of the requisite materials, or to make it necessary 
 to substitute less appropriate materials. Sixthly, — The not 
 contracting at prices at which the article evidently cannot 
 possibly be supplied ; for the consequence of this practice 
 is a need for allowing a subsequent advance upon the con- 
 tract price, which is often so great as to far exceed the 
 value of the article. 
 
 The defects which I thus proposed to obviate, may well 
 be expected to cause Government to pay so much higher a 
 price for raw materials than private manufacturers, as by 
 that circumstance alone to make a great diiference in the 
 ultimate cost price of the articles manufactured out of 
 them. But the remedies are easy, whenever real individual 
 responsibility shall be introduced. Besides which, it must 
 be considered, that so long as these defects exist, they do not 
 act with less force in enhancing the price at which Govern- 
 ment procures the manufactured articles in a finished state, 
 than they do in the instance of the raw materials — on the 
 contrary, as the articles, in a manufactured state, are in the
 
 57 
 
 liands of comparatively few persons, as they cost more than 
 the materials required for their manufacture, and as their 
 quality is far more difficult to ascertain, the loss in their 
 instance is proportionally increased. 
 
 Sixthly, As to your assertion, that private manufacturers 
 can get labour cheaper, make it go farther, and superintend 
 it better, than any public office. If by public office you 
 allude to an aggregate of persons, few of whom have any 
 pretensions to the necessary scientific or practical know- 
 ledge, such as a Board, a Committee, or an aggregate of 
 Dock Yard Officers, left to settle amongst themselves what 
 part each should take in seeing to the execution of the 
 orders given ; and if this be brought into comparison with 
 the management of a private manufacturer, which manage- 
 ment is always on the principle of individual responsibility, 
 in this case the assertion, that private manufacturers might 
 get labour cheaper, make it go further, and superintend it 
 better, might perhaps be supported. Yet even with these 
 drawbacks to good management, it will be found, on inves- 
 tigation, that, in many instances, the price paid in several 
 establishments for naval or land service, whether paid in the 
 form of wages, or even in that of piece-work, has actually 
 been less, and I believe I may add, in many cases, even 
 much less, than is paid by private manufacturers.* 
 
 * As for instance, at a time when shipwrights in a Royal Dock 
 Yard, working from five o'clock in the morning till seven in the evening, 
 received a real pay, inclusive of the extra pay of nominal double days
 
 58 
 
 That the work done may be better done, is fully proved 
 by the acknowledged superiority of ships of war built in a 
 Royal Yard, compared to those built by contract. 
 
 In regard to a manufacturer's being better able to keep 
 any articles in store than Government, I can see no grounds 
 on which this assertion can have been made. The keeping 
 of a material in its simple state, seems more easy than the 
 preservation of such manufactured articles, at least, as are 
 ciomposed of different materials, especially if acting chemi- 
 cally one upon the other ; the circumstances on which the 
 preservation of any material depends are easily known, and 
 as easily reducible to rule ; the extent and variety of the 
 accommodations already provided in Naval Arsenals, affords 
 a choice of suitable storehouse room for materials of almost 
 every description, much greater than any private manufac- 
 turer can be expected to provide : and the precautions 
 which may be taken in a Government Arsenal against 
 peculation, embezzlement, and theft, or by conflagration, 
 considering the unlimited number of persons under military 
 discipline at command as guards, and the responsibility 
 which storekeepers might be subjected to, renders it 
 difficult to conceive that private manufacturers should have 
 any superiority in this respect. 
 
 and extra tides, of 5s. 5d. per day — (Naval Papers, No. 3, page 107.) 
 Shipwrights of the River Thames, and at the same time out of employ, 
 refused to engage themselves for less than 12*. per day. (Naval 
 Papers, No. 2, page 21.)
 
 50 
 
 As a striking proof of the practicability of eftectinir a 
 very great reduction in public expenditure, by means 
 of manufacturing on Government account according to an 
 improved system, I shall refer to the three establishments 
 of which I accomplished the inti'oduction under every dis- 
 couragement, arising from apprehensions of mischief, and 
 a general aversion, on the part of subordinate officers, 
 to the introduction of machinery; and in spite of every 
 obstacle I met with from the ordinary routine of Dock 
 Yard business, and still more, from the constant endea- 
 vours exerted, publicly and privately, from first to 
 last, by individuals deeply interested in preventing their 
 introduction, and in putting a stop to them when once 
 completed. If the investigations already gone into, by 
 order of the Admiralty and otherwise, have not furnished 
 convincing proofs of the economy, and other specified 
 advantages, resulting from these establishments,* I now 
 challenge further inquiries into the minutest particulars 
 respecting them. I do so, not only for my own credit sake, 
 but for the far higher consideration of the saving of 10, 20, 
 50 per cent, or more, according to the article, which might 
 thus be made on the expenditure of most of the manu- 
 factured articles now procured by contract. 
 
 These three establishments were the wood-mills, metal- 
 
 * Naval Papers, No. 2, p. 69 to 103, and No. 8, p. 173 to 175. 
 t Naval Papers, No. l,pp. 13, 18, 237; No. 2, p. 68; No. 8, pp. 166, 
 131, &c.
 
 60 
 
 mills, and millwrights* shop in Portsmouth dock yard. The 
 wood-mills, including the block machinery, were instituted 
 with a view to working wood for a great variety of pur- 
 poses by machinery,* the metal-mills generally for the 
 working metals, and the millwrights' shop for all works 
 comprehended in the business of the engine-maker and 
 millwright.-t" The management of these three establish- 
 ments was by the then Lords of the Admiralty confided to 
 me, without any controul as to the number of persons to 
 be employed, or the rate of payment of them ; but under 
 that individual responsibility which characterized the office 
 which I held, and under the constant check afforded by the 
 constant inspection of the dock yard officers and the Com- 
 missioner on the spot. The manner in which this service 
 was executed is detailed in my Naval Papers, No. 8. — for the 
 present purpose it is sufficient to state, that each establish- 
 ment was managed by a master workman, at the wages of no 
 more than 4/. per week, and a foreman, at the wages of from 
 1/. 16*. to 21. 2s. per week, without any thing additional 
 either in the way of house or house rent, or other allowance 
 or perquisite of any kind, or by any engagement for retain- 
 ing them after they should become incompetent, or for their 
 final superannuation. The operatives in these establish- 
 ments were of several descriptions and denominations ; in 
 the wood-mills of nine denominations; in the metal-mills 
 of eight ; and of three in the millwrights' shop ; and those 
 
 * Naval Papers, No. 8, page 191. 
 -}• Naval Papers, No. 8, page 144.
 
 61 
 
 of each denomination were again divided into two or 
 three classes, at as many diiferent rates of pay; the 
 pay earned, varied from 9f^. to 10s. a day. The average 
 day pay, however, being in the metal-mills, including the 
 master, 3*. II ~d. per day, in the wood-mills, 2^. lOt/., 
 master also included — rates of pay which, considering that 
 it was then the dearest time of war, will not probably be 
 thought higher than would have been paid by private manu- 
 facturers for the same sort of work. In the millwrights' shop, 
 the average pay to millwrights was at first but 45. l^d. 
 per day, that of the foremen, or first class, being 7s. per 
 day, and men of the second class 5*., while labourers and 
 boys were paid at different rates, down to 9d. per day. At 
 the same time (in the year 1805,) the ordinary pay by 
 master-millwrights, in the service of private individuals, to 
 all their workmen, not including foremen, was 6s., besides 
 extra work at an encreased rate, and exclusive of the mas- 
 ter's profit of Is. 4rf. per day for every man employed, and 
 always charged whenever the master-workman was not 
 himself at the head of the concern — a profit entirely saved 
 in the case of the millwright's shop in question. 
 
 In these three establishments there was no clerk; the 
 accounts were kept by the masters of each, assisted by a 
 cabin-keeper ; who in the case of the wood mills, at a time 
 at which I happen to have preserved the note, was a lad 
 at Is. 2d. per day. The accounts of wages were sent up to 
 me weekly, for my own inspection as to their propriety, and
 
 62 
 
 for examination in my office as to their accuracy, and for 
 the calculations. The men were called over by the master 
 of the mills, for which business five minutes only were 
 allowed; they were paid by the master weekly after the 
 working hours were over. 
 
 As to the actual savings to Government by the introduc- 
 tion of these establishments, the accounts of the metal- 
 mills, which were in the year 1812 made up to the end of 
 the year 1811, and submitted to the Admiralty Board, for 
 the purpose of exhibiting these savings, shewed that the 
 total outgoings to that time, including the original outlay 
 on the erection of the mills, with interest and compound 
 interest at five per cent., with an additional per-centage to 
 cover wear and tear, and risk of disuse, had amounted to 
 892,528/. 13*. lOd. The returns and value of the stock 
 upon the premises had amounted to 960,743/. 18s. 4c?., and 
 the whole of the capital borrowed having shortly after been 
 paid off by profits, the establishment was, in 1812, working 
 at a clear annual profit of 40,954/. 
 
 In the wood mills the annual savings amounted upon 
 blocks and blockmaker's wares, including those not made 
 by machinery, to 16,621/. 8^. 10c/. per annum; besides 
 savings on a variety of other articles, in some to the 
 amount of between 60 and 70 per cent, on the usual ex- 
 pense of workmanship.* In regard to the millwright's 
 shop, no abstract had been completed before my office was 
 
 * Naval Papers, No. 8, page 165, article, Shot Racks.
 
 63 
 
 abolished ; and not having now access to the accounts, I 
 cannot state, with any precision, the amount of the savings 
 effected by its means. It may, however, be generally 
 estimated at not less than 5,000/., and may well have been 
 10,000/. or more per annum. 
 
 In regard to other items of manufactures which I had 
 prepared notices of, for the purpose of exhibiting to your 
 Committee the cost of fabrication in a dock yard, compared 
 to contract prices, I selected those of which I considered 
 the accounts as being the most to be depended on. The 
 first of these items was the building a ship, the details of 
 which may be found in the papers ordered to be printed by 
 the House of Commons, 1806. In this case the workmen's 
 wages in the dock yard were reckoned at the prices paid 
 by the piece, and the timber was estimated under the 
 regulations which had then lately been introduced for 
 ascertaining its exact value, and were then in their fullest 
 force ; and having myself made additions for items of ex- 
 pense not included in that account, such as for rent, in- 
 surance, interest of money, salaries, it appears that the 
 savings obtained by building rather than contracting, 
 amounted, on a 74 gun-ship, to 17,070/. 7s. lid. 
 
 In the instance of mast-making, when I first contrived 
 the cocques, now in general use, and was desirous of ascer- 
 taining the saving effected by them, I had opportunities of 
 knowing that the cost of making masts in a dock yard was 
 well ascertained. It appears by papers, published by the
 
 m 
 
 House of Commons also in 1806, that the price allowed 
 a contractor for making in parts, the main-mast of a 74 
 gun ship, was 124/. 125., the cost in a dock yard only 
 59/. 145. Id* 
 
 So in regard to the making of cordage and sail-cloth, the 
 minute investigations entered into on these branches of 
 business enable me to affirm that the data are correct, from 
 which it appeared that a saving of from 86,000/. per annum 
 to 159,000/. might have been made, by manufacturing 
 cordage on Government account, instead of obtaining it by 
 contract, and of perhaps 200,000/. by sail cloth.f 
 
 In regard to victualling stores, the investigations I had 
 occasion to enter into, relative to portable soup and biscuit- 
 baking, pointed out that the soup, although not near so ad- 
 vantageously manufactured as it might have been, was still 
 obtained at a cheaper rate than that at which it could be 
 procured by contract. In regard to biscuit, its cost was 
 about the same as the contract price ; but this was a manu- 
 facture that admitted of great improvement in the manipu- 
 lation, and in the consumption of fuel ; indeed it appeared, 
 from general estimation, that about half the expense of 
 labour might have been saved by appropriate machinery, 
 and half the expense of fuel, by a change of the kind of 
 
 * See United Service Journal, Feb. 1830, page 199, where various 
 other particulars appear in regard to this question. 
 
 f See Naval Papers, No. 2, and United Service Journal, February, 
 1830.
 
 65 
 
 oven employed, for one appropriate to the burning of coah 
 instead of wood. 
 
 3. That the success depends on finding numbers of 
 officers willing to serve with zeal and integrity. 
 
 To this the answer is, that manufacturers have no diffi- 
 culty in finding a sufficient number of persons willing to 
 work with zeal and integrity in their private concerns ; that 
 Grovernment pay is as sure as theirs ; and that Government 
 employ is considered more desirable. And although the 
 principals in private manufactories often give that general 
 superintendence which it might easily be made the interest 
 of the superior local operative officer to afibrd, still the 
 actual superintendence of workmen, in I may say all thy 
 great manufactories I have visited, is executed by managers 
 and foremen, at rates of pay of two or three pounds a week, 
 and often of much more. 
 
 4. That materials will be wasted in working up. 
 
 On this particular the means of efficient check are easy. 
 When once the quantity of materials requisite to produce 
 a given quantity of the manufactured article is ascertained, 
 accounts periodically balanced, shewing the quantities of 
 raw material delivered out to the manufacturer, and those 
 of the manufactured article received back into store, would 
 at once point out whether there had been any loss by waste 
 or theft in the course of manufacture ; and if the receiving 
 officers did their duty, as well in regard to those manufac- 
 tories as in regard to contractors, and as has been uniformly 
 
 E
 
 66 
 
 the case in reojard to the three above mentioned establish- 
 ments at Portsmouth, no damaged or imperfect articles 
 would be received into the store. 
 
 In the storekeeper's department there seems no greater 
 diflficulty in duly keeping accounts of quantities received 
 and delivered, if manufactured on the spot, than if procured 
 by contract. On the contrary, if there be a difference, it 
 is in favour of the articles having been manufactured on the 
 spot ; certain and convenient times can in this case be fixed 
 on for receipts, whereas in regard to articles furnished by 
 contractors, receipt must be dependant on wind and wea- 
 ther and various accidents, so as frequently to embarrass 
 the storekeeper and receiving officers, by the immense 
 quantity of articles brought at one time. 
 
 As to your objections grounded on the imperfections of 
 accounts, I am not sufficiently acquainted with those of the 
 Victualling Department, to enter into the deficiencies 
 that there are or have been in the accounts of articles 
 manufactured by them. But that accounts may be as ac- 
 curately kept in Government manufactories as in a private 
 concern, is again proved in the three establishments already 
 referred to. In the accounts of the metal-mills, for in- 
 stance, not only was a balance struck half-yearly, of the 
 out-goings with the in-comings, including interest and 
 compound interest, at five per cent, on the money con- 
 sidered as borrowed for the erection of the mills, and for 
 all other expenses incurred in or for them, and the work
 
 67 
 
 done in them from the first ; but farther, an additional per- 
 centage was regularly charged on the buildings and ma- 
 chinery, which I have always thought it proper to charge 
 on permanent works, to cover wear and tear, and insurance 
 against risk of disuse. 
 
 Tliat these accounts were unquestionable, may be pre- 
 sumed from the circumstance of their having been, as I 
 understood, transmitted for examination to a gentleman 
 professing himself, when he asked for them, as " largely 
 " concerned in the copper trade," who, on account of the 
 " injury done to the interests of private manufacturers by 
 " these establishments," was professedly endeavouring to 
 tain the abolition of manufacturing copper on Government 
 account ; and as I never heard that, after looking into the 
 accovmts, he thought it necessary to make any farther en- 
 quiries into the business, it is not without reason I infer, 
 that there were not any defects which the scrutiny even of 
 so interested a person could detect. 
 
 As to the account^ of the millwrights' shop, I had not 
 completed the abstracted statement I was preparing, with 
 a view to exhibit the savings that had resulted from this 
 establishment, when my office was abolished ; and not hav- 
 ing afterwards had access to these accounts, I have now no 
 means of stating in detail the items of which they were 
 composed. However, the copy I happen to possess of 
 
 * Naval Papers, No. 2, page 77 and 79.
 
 68 
 
 some accounts of engines and machinery, shews that they 
 entered into all the details of the quantities of materials 
 used for each repair, down to a pound of iron even, and to 
 an hour's time of each particular man employed for every 
 distinguishable portion of each particular work. 
 
 The account of the works carried on in the wood-mills 
 not having, to my knowledge, fallen under so able a scruti- 
 nizer as those of the metal-mills, it may not be unsatisfac- 
 tory to enumerate here the heads under which outgoings 
 and returns were, in that instance, exhibited to the Navy 
 Board. 
 
 These heads were as follows i — 
 
 " Outgoings. 
 
 " 1. Account of outstanding capital, carried on from half 
 year to half year, as it was expended. 
 
 " 2. Interest on ditto, at five per cent, per annum. 
 
 " 3. Estimated expense, at the rate of hazardous insurance,, 
 from loss by fire. 
 
 " 4. Capital sunk in buildings and machinery. 
 
 " 5. Extra per-centage, at the rate of five per cent, per 
 annum, on this particular capital, as requisite in 
 form of rent beyond interest on the money sunk. 
 
 " 6. Estimated expense in the way of rent, during the first 
 three years and a half, for the occasional use of the 
 steam-engine, employed principally for pumping 
 the docks. 
 
 I
 
 69 
 
 ** 7. Current expense of keeping the steam-engine at 
 
 work, including engine-keepers' wages. 
 " 8. Cost of various small articles of tools, &c. 
 *' 9. Salary to the master of the wood-mills. 
 
 ** 10. Estimated expense, namely, at the rate of 25/. 
 per annum, for this concern, of calculating and 
 preparing in my office, by my first clerk, the 
 weekly accounts such as of wages due to the 
 several persons employed in these mills. 
 
 ** 11. Estimated expense of advertising (by the Navy 
 Board) for materials, &c. 
 
 *' 12. Wages to wood-millers, blacksmiths, labourers, &c. 
 
 *' 13. Materials and other articles received from the dock- 
 yard stores, including an extra sum put upon their 
 cost price to pay the dock-yard expenses, &c. on 
 receipt and subsequent delivery to the mills. 
 
 " 14. Estimated expense of sending blocks and block- 
 makers wares to other dock-yards." 
 
 " Per Contra Returns. 
 
 ** 1. Value of articles manufactured in these mills, and 
 delivered into store at Portsmouth dock-yard, 
 reckoned at the prices then paid to contractors, as 
 influenced by the proportions received from different 
 ones, who were repectively paid for the same arti- 
 cles at a higher and a lower rate. 
 
 *' 2. Ditto of the customary extra workmanship on ditto.
 
 70 
 
 " 3. Ditto of offal sold or returned into store. 
 
 " 4. Ditto of stock in hand." 
 Another reason, from which you conclude that " it is 
 " utterly impossible that public offices can themselves 
 " manufacture any article at as low a price as it can be got 
 " for by a contract," is that " contract prices are always 
 " kept as low as a combination of manufacturing skill, per- 
 *' feet economy, and a very low ordinary rate of profit will 
 " keep them." A number of instances have, however, 
 come to my knowledge, where manufacturers have found 
 means of obtaining their contracts at prices very much 
 higher, even more than double what thoy themselves consi- 
 dered as affording them a fair profit. In regard to copper, 
 for example, previous to the establishment of the metal- 
 mills, Messrs Grenfell and Williams obtained from 4>:yi. to 
 6^d. per lb. for the re-manufacture of old copper, but as 
 soon as it was proposed to perform this operation on 
 Government account, they offered to re-manufacture the 
 whole at 2^d. In the instance of Roman cement, before 
 the establishment of the cement-mills at Sheerness, the 
 contract price was 5s. per bushel; as soon as those mills 
 were ordered, the contractor reduced his price to 3s. 6d. per 
 bushel. One of the last subjects I had occasion to investi- 
 gate, before the abolition of my office, was the exorbitant 
 profit which had been obtained under pretext of an im- 
 provement in ships' fire-hearths. The extra profit received 
 by this contractor on all the fire-hearths supplied to the
 
 71 
 
 Navy, was from fifteen to thirty-five per cent, above what 
 he considered as a fair profit, as shewn by the reduced price 
 at which he was willing to continue the supply.* It is in- 
 deed well known how immense have been the incomes de- 
 rived by private manufacturers from their supplies to Go- 
 vernment, often far exceeding the utmost salaries paid for 
 the highest ministerial services. 
 
 In regard to the quality of the articles to be provided, you 
 say that that of contract goods may be secured " without the 
 " slightest risk of fraud or disappointment, by having pro- 
 " per specifications and deeds of contract, and by enforcing 
 " a strict inspection." But long experience has shewn, on 
 the contrary, that manufacturing contractors, in particular, 
 often find means of evading appropriate specifications, espe- 
 cially in regard to articles of great demand at times of 
 extraordinary need. For example, during last war, in the 
 instance of a kind of copper-sheathing called improved, 
 the duration of which was guaranteed by contract to be of a 
 certain number of years, the penalty provided on failure 
 being, that the contractor should replace with new all 
 sheathing that should have proved of shorter duration than 
 the time specified. A considerable proportion of this im- 
 proved sheathing did decay in a shorter period than the 
 time guaranteed, but on returning the decayed sheets to the 
 contractors, instead of replacing it according to the con- 
 tract, with new copper, sheet for sheet, they could only be 
 * See Naval Papers, No. 8, p. 25.
 
 72 
 
 made to give a weight of sheathing equal with the weight 
 of worn copper returned ; and this, notwithstanding the 
 strong remonstrances of the dock-yard officers. 
 
 An example of imperfections in specifications of contract 
 arising from real, I may say, insurmountable difficulties, 
 may be seen in the existing contract, and in all former con- 
 tracts for canvas. The goodness as to durability of this 
 article depends on a variety of circumstances not discovera- 
 ble subsequent to fabrication. The nature of the material, 
 whether entirely hemp or flax, or a mixture of the two — 
 the quality of the raw material as dependant on growth, 
 and on the operation of steeping and separating the fibre 
 from other parts of the plant — the particular process used 
 for bleaching, whether by means of pearl or potash, or by 
 partial or entire substitution of cheaper but destructive arti- 
 cles, such as lime or sulphuric acid — the degree of heat em- 
 ployed for dissolving the mucilage — length of time during 
 which the yarn has been exposed to the air for the purpose 
 of bleaching — the quantity and quality of the starch em- 
 ployed for dressing it — the tightness with which the weft 
 has been drawn, and the number and force of the strokes 
 given in beating it up into close contact with the last crossing 
 of the thread in weaving, &c. Where real difficulties of 
 such a nature as these exist, however much a scientific 
 knowledge of the subject, manufacturing experience, and 
 legal skill, may join to draw up the contract, the impossibi- 
 lity of insuring the conditions of it must be apparent. Re-
 
 73 
 
 course has therefore, at different times, been had to inspec- 
 tors expressly appointed for providing and receiving canvas ; 
 but even under this system unforeseen frauds have occurred, 
 such as deficiency in the usual width. Sometimes weight 
 of the bolt has been evaded or omitted; sometimes trial 
 of the strength of the weft across. In the last " instructions" 
 to the contractor which I have seen, and which are probably 
 in force at this time, the trial of both warp and weft are 
 omitted ; an affidavit of the manufacturer is the security 
 resorted to for insuring the performance of the conditions 
 required ; and it is provided, that the manufactories are to 
 be open at all times to the Navy Board's inspector, " who 
 " will occasionally visit" them. But setting aside the diffi- 
 culty of detecting abuses in these and other such particu- 
 lars, by an occasional visitation, can it be considered as 
 easier to ensure the probity of an inspector when at a pri- 
 vate manufactory, unseen by any one who could be a check 
 upon him, subjected to all the temptations of friendship, 
 flattery, kind treatment, even where pecuniary temptations 
 are of no avail, than it is to secure the probity of a master 
 workman, carrying on the business under the constant 
 inspection of the superior operative officers, as in a dock- 
 yard, the Check Officers, and the Commissioner. 
 
 In regard to copper-sheathing, on the occasion of its 
 having been represented to the Admiralty that the sheathing 
 on certain ships was bad, and that bad copper had been 
 manufactured in the Portsmouth metal-mills, it was incon-
 
 74 
 
 testibly proved, on tlie contrary, that the bad sheatliing 
 pointed out to their Lordships was not Portsmouth-made, 
 but contractors' sheathing — " That on the examination of 
 " the copper on thirty-two ships sheathed with copper, made 
 " there, so far from its having been found to decay, as con- 
 " tractors' sheathing had done, sometimes in the course of a 
 " few months, frequently in two or three years, the Ports- 
 " mouth copper had in no one instance been found to decay 
 " in so short a period."* Indeed, so convincing were the 
 proofs considered to be by the Navy Board, that they 
 in transmitting, during my absence, the Report to their 
 Lordships, for the first time that they had ever interfered 
 in regard to these establishments, concluded the letter of 
 transmission by saying, " which we hope their Lordships 
 " will consider a complete refutation of the alleged defects 
 " in the quality of the copper manufactured in Portsmouth 
 " dock-yard — [Navy Board to Admiralty, 6th November 
 " 1812];" — an opinion, in this instance, of considerable 
 value, since blame might have attached to them for having 
 obtained sheathing of inferior quality by contract, however 
 unavoidable, and although greater precaution had been 
 taken in regard to this than almost any other article of 
 store ; — whilst on the other hand, neither credit nor advan- 
 tage could in any way result to them from any superiority 
 of the sheathing produced in the Portsmouth mills. It hap- 
 
 * See Naval Papers, No. 2^ page 181.
 
 75 
 
 pened also, a few days after that Report was transmitted, 
 that on the occasion of enquiries having been made respect- 
 ing the persons who had furnished the copper of the Sceptre, 
 which had fouled in a remarkable degree, it appeared that 
 the foul copper on that ship bore the mark of the Mines 
 Royal Company; but that among the strakes were six 
 which bore the marks of the Portsmouth-made copper, 
 and that these six strakes had not fouled. I have lately 
 heard it said that private merchants, purchasing old vessels 
 of war, prefer the Portsmouth copper upon them to any 
 other sheathing, in consequence of its superior properties, 
 and I have also heard that it has been found generally on 
 vessels of war of remarkable durability. 
 
 In regard to blocks, no examination was ever made of the 
 durability of those manufactured in Portsmouth wood-mills 
 compared to those obtained by contract; but after these 
 mills had been some time established, the remarkable fact 
 appeared, that the total consumption of blocks in the navy 
 had materially diminished. 
 
 It is not to be denied, however, that articles have some- 
 times been obtained as good by contract as by fabricating 
 them on Government account. An example is afforded in 
 the instance of the Bellerophon, a seventy-four-gun ship, 
 which was built by contract, and commissioned in the year 
 1786. She is still lying in ordinary at Portsmouth, after 
 an existence of forty-four years ; — up to the year 1799, al- 
 though always in commission, she had had no work whatever
 
 T0 
 
 done to her, but common fittings; she still required no 
 repairs, nor had she, as I have been since informed, had 
 any considerable repair from her first building to the time 
 when, being twenty-nine years old, she conveyed Napo- 
 leon out to St Helena, and I understood she was still in 
 service two years ago. But in this instance I have little 
 doubt that the goodness of that ship depended on the un- 
 common degree of firmness, and steady incorruptibility, of a 
 single Government shipwright officer, of very inferior rank 
 and at low pay. A reference to Naval Papers, No. II, 
 pp. 36 and 37, will exhibit the temptations to a direliction 
 of his duty this officer had to withstand, and may serve as 
 an appropriate and authenticated example, well worth your 
 consultation, to shew how much more difficult it is for 
 public officers to withstand the endeavours of interested 
 contractors, than to do their duty openly in a naval arsenal. 
 But, on the other hand, may be adduced the example of 
 the Ajax, a 74 gun ship, built by contract, and first com- 
 missioned in Jxine 1798, which in the same year required 
 shifting of defective works and caulking to the amount of 
 2,988/., and which having been but five months at sea, un- 
 derwent repairs which amounted to 25,502/. ; as also the 
 example of the Achilles, also built by contract, which after 
 no more than seventeen months' service, required repairs to 
 the amount of 36,205/.* These vessels afford sufficiently 
 
 * See accounts and papers relating to ships of war, ordered to be 
 printed by the House of Commons, 17th and 21st of April 1806.
 
 77 
 
 convincing and costly examples, in proof that Government 
 cannot even by inspection in the private yard, during the 
 progress of the work, or by examination on the reception 
 of the article, insure themselves against the constant endea- 
 vours to evade any conditions which may be required as to 
 the quality of the article to be furnished. 
 
 In treating of manufacturing on Government account, 
 the very extensive works of repairs and re-manufactures 
 must not be overlooked. Repairs of frigates by private 
 ship-builders have cost twice as much as the same ship- 
 builders would have required for building new and similar 
 ones, besides that the old materials have been given up to 
 them.* These exorbitant charges had been but recently 
 pointed out to the Admiralty and the Navy Board, when 
 between May 1804, and March 1806, twenty-three vessels 
 of war were given for repair into the hands of private ship- 
 builders. Notwithstanding those representations, on reference 
 to papers ordered by the House of Commons to be printed, 
 the 21st of April 1806, it wiU be found that four only of the 
 twenty-three- cost something less for their repairs than their 
 first cost, the others more and considerably more ; although 
 by this document it appears that the repairs were most of 
 them only what are technically called middling repairs. The 
 re-manufacturing by contract worn out articles of metals 
 of all kinds would be seen to be no less extravagant, 
 on comparing the low price at which most old articles of 
 
 * See '^aval Papers, No. 2, page 26, and No. 8, page 106.
 
 78 
 
 this material are sold, with the price paid for new. In re- 
 gard to metals too, it is peculiarly injudicious to exchange 
 the old for new, since it is a well known fact that they 
 are improved in quality, especially iron, by re-working. 
 
 It must further be taken into account, that even supposing 
 manufacturers to take no unfair advantages, and to be con- 
 tented with ordinary profits ; that those ordinary profits are 
 of an amount well worth saving to the public. It is, I 
 have understood, very true, that in some manufactories of 
 great extent, and in regard to which the competition is con- 
 siderable, cotton-spinning, for example, manufacturers have 
 of late been satisfied to carry on the works at profits of 4 or 
 5 per cent., where formerly they looked to profits of five or 
 ten times that amount — that some manufacturers, during a 
 short time of general depression, will even go on so long as 
 they can manufacture without loss, in the hopes of future 
 advance of prices ; but reckoning only at what might on 
 an average be thought a reasonable profit, 10 per cent., it 
 will be admitted that a difference of 10 per cent, on all 
 manufactured articles wanted on Government account, is 
 a reduction well worth efl^ecting. 
 
 Another objection you make to the manufacturing on 
 Government account, is the great proportion in the number 
 of superintendants to that of operatives in Government 
 establishments. But this disproportion is by no means 
 necessary. By the intended new regulations mentioned in 
 my Naval Papers, No. 3, (pages 132, 133, 138, 140,) a
 
 79 
 
 great number of principal officers, masters of trades, mea- 
 surers, &c. were to have been abolished, as useless and mis- 
 chievous. And in each of the three Portsmouth establish- 
 ments, for instance, a master, a foreman, and a man at 
 labourer's pay as a cabin keeper, were the whole of the 
 non-operatives to about one or more hundred operatives. 
 
 A farther and a different reason exists for introducing 
 the manufacture of a variety of articles not now made in 
 a naval arsenal, namely, as affording means by which the 
 rates of wages of the operatives might be lowered by 
 the employment not only of full grown men, but also 
 of their wives and children. Private manufacturers are 
 aware that if the man be the only one to earn money for 
 the support of his family, his wages must be high, that 
 his wages may suffice for the maintenance of the whole. 
 But if employment be likewise found for the wife and 
 children, their earnings may be made to contribute to the 
 general support of the whole, and the father's wages may 
 be diminished nearly in proportion. Accordingly, in exten- 
 sive private manufactories, it will be found that women and 
 children find employment as well as men. At our naval 
 arsenals, on the contrary, near which there exist but few 
 private manufactories, no work is given to women or 
 children, so that it is on the father alone the whole have to 
 depend for sustenance; although in the fabrication of a great 
 number of articles subservient to naval purposes, useful 
 employment might easily be found for all the labour the
 
 wives and children of tlie operatives could spare from tlieir 
 domestic business, so as to effect a saving to the public of 
 at least a sixth part of the customary wages to the men. 
 
 I have heard it asserted, that in point of morality, women 
 could not be employed by Government ; from this opinion, 
 however, I wholly dissent. In many manufactories females 
 might be separated entirely from the men, were it thought 
 necessary ; although whoever is conversant with tolerably 
 well regulated private manufactories, must be well con- 
 vinced that it is not in the workshop immorality has been 
 found,; whilst those who have attended to the habits of 
 the people at sea-ports, where our naval arsenals are placed, 
 will no doubt acquiesce in the opinion I have formed, that 
 youthful females, instead of being exposed to temptation, 
 would be more likely to be withdrawn from it, were their 
 time ^sefully employed under suitable inspection. In re- 
 gard to the morals of the men too, those who are fathers of 
 numerous families at least, were a portion of their children 
 earning money, would not be exposed to that great tempta- 
 tion to peculation and mal-practices, so frequently known 
 to be the case with men burthened with a numerous 
 family. 
 
 In going through the subject of manufactories, I have 
 had occasion to refer to a variety of documents not brought 
 to notice, and it has happened on this, as on every former 
 investigation, respecting the fabrication of articles on Go-. 
 vernment account, that my conviction has been strength-
 
 81 
 
 ened, that by this means the greatest reduction of expense 
 on the materiel may be the most easily effected. In my 
 desire to learn on what grounds you and others may have 
 entertained a contrary opinion, I have turned to the evi- 
 dence which the Appendix to the Second Report of your 
 Committee affords, in regard to manufactories in the Ord- 
 nance Department, and my inferences, in regard to the ma- 
 nufactories in that Department, are also the reverse of yours. 
 It seems to me that some articles provided by the Ordnance 
 are of a nature, the permanent goodness of which is so 
 essential to efficiency, gunpowder above all, that were this 
 defective, not only would our other preparations for war be 
 useless, but the very lives of the military personnel would 
 be in jeopardy — here indeed it is particularly apparent 
 that " efficiency is true economy ;" and, certainly, although 
 an article of such importance, if fabricated under the due 
 inspection which can only be obtained in a Government 
 establishment, should cost more than a given weight of it 
 could be procured for by contract, still it would be economy 
 to manufacture it. It would appear, however, that articles 
 manufactured by the Ordnance are cheaper than they can 
 be bought of equal goodness. It is true, full details of 
 accounts do not appear in the Appendix, yet, by examina- 
 tion of the abstracts there exliibited, I cannot doubt that 
 many manufactories are carried on in this Department also 
 with saving to the public. Indeed, the appearance these 
 accounts exhibit, of having been abstracted from more de-
 
 82 
 
 tailed ones, could not but excite some surprise if your 
 Committee doubted Sir H. Hardinge's reiterated assertions, 
 and the instances he adduced, of savings having arisen from 
 tliis source, that your Committee should not have called for 
 such details as should either have confirmed his opinion, or 
 have afforded specific data and reasons for controverting it. 
 It is not to be supposed that your Committee had pre- 
 viously made up an opinion on any subject that was to be 
 brought under their investigation ; and should any groimds 
 have existed for the opinion you have formed which do not 
 appear, I cannot possibly judge of their validity. But should 
 any facts be adduced against the conclusions I have come 
 to, I certainly shall not be the last either to enter into any 
 needful investigations, or to change any opinions I have 
 formed, whenever they may be in opposition to decided 
 facts, or to well-grounded reasons. 
 
 I am, Sir, 
 
 Your very obedient Servant, 
 
 S. BENTHAM. 
 
 2, Lower Connaught Place, 
 Slut March 1830. 
 
 LONDON: 
 
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