The falling off in numbers borne and in those embarking for naval training is attributed to the unpopularity of this compulsory training owing to insufficient pay as compared with what the men earn at their proper vocations (fishing, yachting, merchantships, etc.), and the length of time required to serve, which interferes with their employment. Arrangements are being made to re-adjust the pay and to reduce the period of training from 6 to 3 months, which it is hoped will induce more men to embark. Further, this embarkation will not be compulsory, except as regards earning promotion and future pension, and men who do not qualify for promotion to "qualified seamen will be allowed to re-enrol as "seamen " for a second and third period of 5 years, which at present is not allowed. We regret this unavoidable diminution of the training period; but it is believed that a re-adjustment of the system of instruction will go far to neutralise the loss of time.

The negotiations for the establishment of a branch of the Royal Naval Reserve in the North American colonies, to which reference was made in last year's statement, have been proceeded with, and 50 seamen from Newfoundland have been embarked in His Majesty's ships on the station for 6 months' training.

Firemen. During the year 1900 there were 337 firemen enrolled as compared with 544 in 1899, being a decrease of 207.

The numbers borne as compared with the numbers voted are:

Drill-Ships and Batteries.-The process of replacing the old M.L. guns by modern Q.F. guns is being continued, and arrangements are in hand to supply several 5-inch B.L. (converted to Q.F.) and Maxim guns during the forthcoming financial year.

CHANGES IN COMPOSITION OF FLEETS.

China. The China Fleet has been considerably increased during the past 12 months. The "Dido," "Isis," and "Astræa" from the Mediterranean, the "Arethusa" from the Pacific, the "Wallaroo," "Mohawk," and "Lizard" from Australia, and the Marathon" from the East Indies were all sent to that station during the disturbances last year for temporary service. Of these, the "Marathon" has returned to her station, the "Dido" and "Isis" have been replaced by other cruisers in the Mediterranean, and will remain in China; the "Mohawk" has been replaced in Australia, and is now returning home. The "Glory," "Argonaut," and 2 destroyers ("Otter" and Janus" have been added to the Fleet in Chinese waters, and the "Ocean " left Malta 2nd February to join them. The "Robin," river gun-boat, has been commissioned for service in the West River, and the steamer "Pioneer" has been purchased and will be fitted as a gun-boat for service on the Yang-tse Kiang.

Mediterranean.-Eight destroyers and four first-class torpedo-boats have been added to the Mediterranean Fleet. The "Hood" has replaced the "Ocean" sent to China.

Home.-A torpedo-gunboat (fitted with water-tube boilers) has been attached to each home port for the instruction of engine-room ratings in water-tube boilers.

The additions to the sea-going Fleet in Commission, enumerated above, involved complements to the extent of 7,269 officers and men.

It is worthy of note that these ships have been commissioned without reducing the personnel at home below the strength required for mobilisation of the ships in reserve, without any interruption or diminution of the work of the various schools and training establishments, and without drawing upon any of the Naval Reserve forces. The ordinary reliefs on foreign stations, which were due during the latter portion of the year 1900, had unavoidably to be delayed, but are all now either being or about to be carried out.

Naval Brigades.-All Naval Brigades serving on shore in South Africa had returned to their ships by October, 1900.

A Naval Brigade participated in the International advance to Pekin, and, on the occupation of the city, returned to their ships.

The Government of South Australia offered the services of the South Australian gun-boat"Protector" for service in China during the disturbances of last year. The offer was accepted for four months, and the Protector" served in China from September till the end of November. The Commander-in-Chief reported that the "Protector' was most useful, being an efficient and well-kept man-of-war, reflecting credit on captain, officers, and men.

The Governments of New South Wales and Victoria similarly offered the services of Colonial Naval Brigades, consisting respectively of 300 and 200 officers and men for service in China. These offers were accepted, and the brigades have been employed on shore under the General, where they did good service. They will return home by the end of March.

Losses. The second-class cruiser "Sybille " went ashore at Lambert's Bay, in Cape Colony, on 16th January, and is reported to be a total wreck. One life was lost. The report of the court-martial has not yet arrived. The "Hind," Coast Guard cruiser, was wrecked on the East Coast of England in November. No lives were lost. The river gun-boat "Sandpiper" sank during a typhoon at Hong-Kong in November, but was successfully raised. One life was lost.

Manœuvres.—The annual manœuvres took place, 49 ships and torpedo-boats being specially commissioned for the purpose. Altogether 115 ships and vessels took part in the manoeuvres, and over 30,0000 officers and men. The total number of Coast Guard embarked was 45 officers and 1,711 men, and of Royal Naval Reserves 35 officers and 390 men.

COALING OF THE FLEET.

In order to facilitate the departmental administration of this service a slight change has been made in the Navy Estimates, whereby all incidental expenses, including craft, machinery, etc., are provided for under the same sub-head as the cost of the coal and its conveyance (Vote 8, Section 2, Sub-head K). The works and buildings connected with coaling have also been grouped in one sub-head of Vote 10.

Steps are in progress to organise and improve the coaling facilities at the several naval stations to ensure that the requirements of the fleets can at all times be amply met. It is proposed to include the provision for the necessary expenditure in the forthcoming Naval Works Loan Bill.

Additions have been made to the coaling craft, and provision is included in the Estimates for 1901-2 for further floating craft to be equipped with modern appliances. Provision is also made for the increase of reserve stocks of coal at certain naval stations abroad. The supervision of coaling duties at certain of the naval depôts has been strengthened.

The system of supplying coal to fleets and naval stations by colliers under Admiralty control or under the orders of the Commanders-in-Chief is working well, and will be extended as far as circumstances permit.

The experiments with patent fuel have been satisfactorily concluded, and suitable quantities will be stored to form adequate reserves at foreign stations.

Schemes for further trials with liquid fuel have been considered, and some manufacturers have undertaken to submit designs and particulars of trials. Two of these plans are about to be tried, one with a marine water-tube boiler on shore, and one, if the arrangements are suitable, on board H.M.S. "Surly."

NAVAL TRAINING.

The training of officers and men has received and is receiving much attention from the Board.

The report of a committee on the Training and Examination of Junior Officers, which was appoined in 1897, and the circular in which its recommendations have been embodied and issued to the Fleet, will be laid before Parliament. Sufficient time has

not elapsed to show the result of the changes introduced, but any modifications shown to be necessary by experience will be adopted.

Special encouragement is being given to the better study of foreign languages; the seamanship examination has been revised by the Council of Education to meet the present conditions obtaining on modern war-ships; promotion to the rank of lieutenant will not in future depend only upon success in examinations, but a certificate will be required to be obtained by every sub-lieutenant from his commanding officer after six months' service in a ship of war at sea as to his fitness to take charge of a watch at sea and to perform efficiently his other duties as a lieutenant.

A naval strategy course, including therein strategy, tactics, naval history, and international law, has been commenced at Greenwich for the benefit of the senior officers at the Royal Naval College, and is being conducted by the captain of the college. The tactical courses at Portsmouth are being continued. All the officers going through these courses have been placed on full pay.

The Council of Naval Education has been directed to carefully scrutinise the Greenwich course with a view to ascertaining whether the matter and period of study of the gunnery and torpedo lieutenants is that most adapted to the efficiency of the Service.

The system of training the men of the Navy is being constantly watched and revised with a view to increased efficiency. Great stress is being laid on efficiency in coaling; special arrangements have been made for training the stokers in the depôts in the stoking of water-tube boilers; a scheme has been matured, and is now under consideration, for transferring a large proportion of the instruction in gunnery from the gunnery schools to the seagoing fleet, and for confining the further education in the gunnery schools to those seamen who show special aptitude, and who may therefore, be selected for the advanced ratings of captains of guns and captains of turrets, or for the higher torpedo ratings. There is no doubt but that the standard of proficiency in gunnery is steadily rising in the Navy. A large addition of practice ammunition for the fleet was santioned in 1899, and a seagoing gunnery ship has been allotted to each of the gunnery schools, and will be attached as soon as ready.

NEW CONSTRUCTION.

There has been no relaxation of activity in shipbuilding and engineering operations generally during the past year, better progress having been made than in recent years with the ships under construction for the Royal Navy, and it is anticipated that the aggregate expenditure on new construction will closely approach the provision made in the Estimates, and will largely exceed that of any previous year.

The steps taken by the various contractors to increase the output of armour and machinery have begun to show their effect, and the rate of progress has greatly increased during the latter half of the year. This is especially the case with armour, the total output of which for Admiralty use in the present year will be from 45 to 50 per cent. greater than last year. The rate of delivery during the latter half of this year indicates that the new plant is now in effective working order. Moreover, a fifth firm has undertaken armour manufacture, and has advanced considerably with the necessary plant. The outlook in regard to the future supply of armour is, therefore, favourable.

The total output of new construction in the financial year now drawing to a close will probably exceed that of 1899-1900, which was previously the greatest on record, by about 1,000,000.

Battle-ships.

The "Glory" has been completed and commissioned. The "Albion" has been delivered, and has commenced her trials, but I regret to say that defects in her machinery have been discovered which have postponed her completion.

The "Vengeance," the last ship of the "Canopus" class, has been detained at Barrow in consequence of an accident to the entrance of the dock in which the ship was being completed. It is now reported that the works on the dock entrance are being rapidly pushed forward, and that they will probably be sufficiently advanced to permit the ship to pass out during April. Her trials and completion will be accelerated as much as possible after delivery.

The six battle-ships of the "Formidable" class, which were in hand in the dockyards at the beginning of the present financial year, have been considerably advanced, and two similar ships (the "Queen" and "Prince of Wales") have been commenced. The "Implacable" has commenced her steam trials, and will be practically completed by the end of the financial year; her gunnery trials will probably be made rather later. It is anticipated that the "Formidable" and "Irresistible" will be completed early in the next financial year, and the "Bulwark" about December next. The "London" and “Venerable" will probably be finished about May, 1902.

The six vessels of the "Duncan" class have also been well advanced. Of the four building by contract, the "Russell" has been launched and the "Duncan" will be launched on 21st March, and the other two are very nearly in the same stage of progress. The "Albemarle" and "Montagu," building in the dockyards, are to be launched on 5th March. All these vessels should be completed in 1902-3.

Armoured Cruisers.

Twenty vessels are now in course of construction; six of the "Cressy" class, four of the "Drake" class, and ten of the "Monmouth" class.

The "Cressy" has been delivered within the contract date, and has satisfactorily completed her steam trials, exceeding her estimated maximum speed by nearly half a knot.

Satisfactory preliminary trials have been made with the new type of mounting for her 9.2-inch guns, and the ship is now being prepared for service. Her gunnery trials will be carried out early in the next financial year.

The "Sutlej" has been delivered and the "Aboukir" will be delivered during the present financial year. Both ships will be made ready for trials immediately.

The completion of the "Hogue" at Barrow has been delayed by the same accident that has affected the delivery of the "Vengeance." The contractors are now making special arrangements to press forward the work on the ship.

The "Bacchante" has been launched, and the "Euryalus" is the only vessel of the class remaining on the building slips. Her launch has been deferred in consequence of the accident to the dock entrance at Barrow.

One vessel of the "Drake" class (the "Good Hope") has been launched, and the "Drake" is to be launched before the present financial year closes. Equally satisfactory progress has not been made hitherto on the other two vessels of this class building by contract, but the contractors have been urged to make greater efforts, and have undertaken to do so.

Four of the vessels of the "Monmouth" class which were commenced last year have been considerably advanced. The first of these (the "Kent") will have been launched before the close of this financial year, and two others will probably be launched about May next, and the fourth about August.

The remaining six vessels have been commenced recently and the work on them will be advanced, before the present financial year closes, to a stage which will enable rapid progress to be made on them next year.

It will be seen from the above that four battle-ships and four armoured cruisers are expected to be launched during the last two months of this financial year.

Protected Cruisers.

The contractors' steam trials of the first-class cruiser "Spartiate" were not satisfactory, and the completion of the ship has been delayed by the necessity for replacing a condemned crank shaft.

The two second-class cruisers of improved "Hermes" type (Challenger," and "Encounter") referred to in the statement of last year have been commenced in the dockyards. They are not sheathed with wood and copper, and are about a knot faster than the "Hermes" class. One of these vessels is to be fitted with Babcock and Wilcox boilers.

Only one third-class cruiser (the "Pandora") has been in hand during the year. Her steam trials have still to be completed, but it is anticipated she will be practically ready for service at the close of the present financial year.

Sloops and Gun-boats.

Eight sloops have been under construction during the year, six in the dockyards and two by contract. The delivery of the latter has been considerably delayed, and they will not be completed, as was anticipated, this financial year. Two of the dockyard-built vessels will be completed this year, and two others will be finished next summer, when the contract-built ships should then be finished.

The remaining two vessels ("Odin" and "Merlin") have been commenced at Sheerness during the present year.

Two gun-boats of extremely light draught (the "Teal" and "Moorhen ") have been begun this year, and are now well advanced. The work has been hindered by difficulties with material for boiler tubes, but it is anticipated that the vessels will be finished early in the next financial year.

Torpedo-boat Destroyers.

The total number of vessels in this class is now 113. Forty-two have trial speeds of 26 to 27 knots, and the whole of these have been completed and accepted. Four of this type, which were originally completed with locomotive boilers, have now been fitted with water-tube boilers, and the whole of the 113 torpedo-boat destroyers now have water-tube boilers of the small tube or "Express" type.

Of the 30-knot vessels, 58 have been delivered, of which two have not yet passed their trials, and the eight still remaining in the builders' hands are well advanced, one having passed her official trials, and two others being now under trial.

Of the five destroyers with trial speeds of over 30 knots two have been delivered and have completed their trials, viz., the "Albatross," which attained 311⁄2 knots speed on trial, and the "Viper," fitted with Parsons' Steam Turbine, which attained on trial a speed of over 33 knots, combined with an almost entire absence of vibration. The "Cobra," which has similar machinery to that in the "Viper," was tried with a load on board largely in excess of that usually carried on speed trials by destroyers, and maintained for three hours a speed slightly above 30 knots.

A fourth vessel, of 32 knots speed, is expected to commence her preliminary steam trials about June next.

The fifth vessel (of 33 knots contract speed) has undergone a very long series of trials with propellers of varying dimensions, but the builders have not up to the present succeeded in attaining the guaranteed speed, and consequent delay in completion has resulted.

At the close of this financial year there will be 10 destroyers ordered previously to 1900-1901 still undelivered, but five additional vessels, not included in the original Estimates for the year, were purchased under an additional Estimate while in course of construction, and these will be delivered this financial year.

Torpedo-boats.

The two torpedo-boats of 25 knots trial speed, ordered in 1899, are well advanced. The first will shortly commence her preliminary trials. The further two of the same type ordered this year are also well advanced, and it is expected that all four will have been delivered and tried by September next.

Royal Yacht.

The alterations in this vessel which were mentioned as necessary in last year's statement have been made, and she has satisfactorily completed her steam trials during the year. These trials included three of 48 hours each, one at 5,000-H.P., and two at 7,500-H.P.; and one trial of 8 hours at 11,000-H.P. All the trials were carried out with complete success, the engines working with great smoothness and an almost complete absence of vibration. The maximum speed obtained was 20 knots, instead of the 20