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Internal Developments. During this year, efforts were made to improve the internal organization of the Ministry, among whose various parts there was still a lack of coordination. More- over, the increasing functions had led to still more heads of departments having direct access to the Minister. Mr. Montagu endeavoured to deal with the problem by setting up a committee whose chairman (Sir Arthur Duckham) and vice-chairman (Sir James Stevenson) were relieved of departmental duties; but its powers were purely advisory. At the same time a weekly meeting of heads of departments was inaugurated and continued until the summer of 191 7. This was of value in giving all depart- ments a knowledge of general policy; but the numbers were too large for it to be an effective instrument of administration.

More important developments were inaugurated in financial administration, in two directions. The first was the overhauling of all the past accounting transactions of the Ministry, with the view of recovering money that had been temporarily lost through the confusion and deficiencies of the 'earlier system of records. This bore fruit in " recoveries " to the amount of some 39,- 000,000. The second was the reconstitution of the accounting system on a commercial basis for the future, by substituting double-entry for the old single-entry system, in use before the war in nearly all Government departments. Since the method of departmental bookkeeping was dictated by the prescribed form of accounts rendered to the Treasury and Parliament, this reform led incidentally to proposals for a remodelling of the public accounts themselves. By 1917 the financial staff of the Ministry had established a system of contract-control by means of cost accounts.

Early in 1917 the control of the inspecting staff was reorgan- ized as an independent department under Sir Sothern Holland. This period also saw a great increase in the size and duties of the priority department, under Sir Edgar Jones. The staff of the Ministry, which had risen to 5,000 under Mr. Lloyd George, rose to 13,000 by July 1917.

Inter-Allied Coordination. The third and culminating period of the Ministry of Munitions (Mr. Winston Churchill being Minister from July 1917 to Jan. 1919) saw certain important though not fundamental changes in programme. The chief of these were growing aircraft demands, accentuated by the campaign of the Independent Air Force against German in- dustrial centres; a sudden enlargement of the tank programme as a result of their successful employment in the attack on Cambrai in Nov. 1-917; and, thirdly, the efforts to emulate the Germans in the production of mustard gas, and to find, if possible, new and more effective poisons.

Further, during 1918 plans were far advanced, in preparation for the 1919 campaign, for increasing the range of an offensive, (a) by adapting the caterpillar principle to the movement across country of troops and stores on a large scale, and (b) by entirely re-equipping the army with longer-range field and other artillery. These measures were carried out by adapting rather than by enlarging the munition-making resources of the country. Indeed, the adequacy of the supply was put to a severe test in March and April 1918, when the army lost 1,000 guns and 100,000 tons of ammunition in the retreat from St. Quentin, in addition to losses resulting from the intensive attacks made upon British munition dumps in France by bombing aircraft. The artillery and ammunition losses were made good by May, and only in the case of small-arms ammunition, the expenditure of which in machine-guns increased to quite unexpected figures, was any anxiety experienced.

This phase of munition history corresponded with the unre- stricted submarine campaign, the active participation in the war by the United States, and an increasing shortage of man-power. It was, therefore, marked by increasing efforts to economize and coordinate effort, (a) w/ithin the Ministry, (b) between the Ministry and other British departments, and (c) between Great Britain and the Allies.

Departmental Reorganizations. Mr. Churchill's first task at the Ministry was to deal with organization. The internal mechan- ism had never developed on a considered plan, but had been

determined partly by personal considerations and partly by the kaleidoscopic changes in the relative importance of various activities as the drama of the war unfolded. Mr. Lloyd George's administration was a period when half a dozen departments of supreme importance were feverishly urging on production in a new field under new conditions. And the business men in charge of them utilized to the full their right of direct access to the Minister thus making organization extremely difficult.

The complexity became much worse during the next period, as duty after duty was imposed upon the Ministry, and as the task of carrying out the old ones involved control in new direc- tions and the creation of fresh administrative branches. Hence, by the summer of 1917, the number of departments had increased to over 50, and although the machinery was in existence for coordinating the programme itself, there was not sufficient cooperation or clear definition of responsibility between the departments. Various attempts had been made to meet this difficulty as, e.g. by the proposal to attach to the Minister one or more staff officers who would act as liaison officers between the departments, many of which were housed at some consider- able distance from headquarters. A more promising scheme was to increase the number of parliamentary secretaries and make all departments report through one or other of them. But this scheme broke down through the complications still caused by exercise of the right of direct access to the Minister on the part of the business heads.

Mr. Churchill solved the problem by the creation of a Muni- tions Council, consisting of the Minister, parliamentary secre- taries and 12 members, including the secretary to the Ministry. Their duties were to deal in the first instance with all matters requiring decision in the departments entrusted to them; and although the heads of departments in theory retained the right of access to the Minister, in practice it was not exercised and the members of Council became in fact the heads of groups of depart- ments. The reform was accompanied by the rehabilitation of the permanent civil servant. The position of the secretary was strengthened by insistence that papers should pass through his hands to the Minister, and still more by the attachment to each member of Council of a civil servant called a secretarial officer whose duty was to see that the procedure worked smoothly and uniformly. This machinery came into being and worked with surprisingly little friction.

But in fact the Council did not often meet as such, its work being to a large extent done by a standing " coordinating " committee of the Council, which dealt with ajl matters arising out of the programme and its execution. A second standing committee of the Council dealt with and prepared plans for demobilization, while matters which did not fall within one or other of these spheres were dealt with by Council committees appointed ad hoc.

The organization of the Munitions Council in its final form was as follows:

F. Finance, contracts, controlled establishments finance, muni- tions works board, lands branch, central stores, salvage (Sir Gilbert Garnsey).

D. Design, inspection, inventions (Gen. Sir Francis Bingham).

S. Iron and steel production, factory construction (Sir John Hunter).

M. Non-ferrous metals, scrap, railway material, optical muni- tions, potash, railway and sea transport of munitions and material (Sir Ernest Moir).

X. Supply of explosives, propellants and chemicals (Sir Keith Price).

O. Supply of artillery, gun ammunition, rifles, machine-guns, small-arms ammunition and trench-warfare supplies. Engineering department (Sir James Stevenson).

A. Aircraft (Sir Arthur Duckham).

W. Warfare, tanks, poison-gas, etc. (Gen. Seely).

L. Labour regulation and supply (Sir Stephenson Kent).

Sec. Secretariat, staff and establishment, legal department, etc. (Sir William Graham Greene).

R. Requirements and statistics, American department, Allied requirements (Mr. W. T. Layton).

Allies. Head of Paris office and one of the British delegates on Inter-Allied Munition Council (Sir Charles Ellis).

In addition the master-general of the ordnance (Gen. Furse) was made an honorary member representing the War Office.